The Affordable Housing Commission and the Northern Housing Consortium (NHC) brought members together earlier this month in Leeds to better understand the drivers of unaffordable housing in the North and to learn from the mistakes of the past. This conference presented an opportunity to discuss how the affordable housing crisis has evolved and spread and what can be done. The discussions from the event were fed back into the work of the new, independent Affordable Housing Commission, chaired by Lord Best with a membership of leading players from across the housing world. Speakers included members of the Commission and other key representatives of housing organisations in the North.
The event was well attended by key representatives from local authorities and housing associations from across the North East and Yorkshire and Humber. Tracy Harrison, Deputy Chief Executive, NHC and Lord Best welcomed delegates.
Lord Best started his key note address stating the importance of the partnership between the NHC and the Affordable Housing Commission (AHC), given the London centric problem we have in this country.
He talked about the early work of the AHC, including public polling and focus group research. Both had shown the extent of the issue, with widespread recognition of the scale of the crisis in housing affordability. He highlighted the contribution of the then recently released Shelter report on social housing and that the AHC hopes to add more nuance, delve deeper, and develop big, politically acceptable, solutions.
The 4 main streams of people affected by issues of affordability, as developed by the AHC in their Call for Evidence, were identified:
Struggling renters: these are required to spend more than a third of their income on rented accommodation; they are often in the private rented sector (PRS), although the problem is also evident in in the social housing sector.
Frustrated homeowners: those unable to buy a property without spending over a third on housing costs; many, who struggling to save and without significant parental support, are destined to remain in the PRS.
Those reliant on state support: households that rely on Housing Benefit/the housing component within Universal Credit but current arrangements provide inadequate support, taking many below the poverty line.
Those who face affordability issues in older age: whose incomes drop suddenly in retirement but whose rents remain the same (something which could become a bigger issue for generation rent in the future), but also older owners in unsatisfactory homes who cannot afford to upgrade their property or acquire somewhere suitable.
The event raised an important issue for the North: unfit properties. This issue is especially evident in the owner occupier sector for older people because of maintenance issues and the costs of upkeep (highlighted in the NHC and Smith Institute report: The Hidden costs of Poor Quality Housing in the North). Unlike the South, housing associations of the North are not so dependent on cross subsidies for their affordable products. Market dips which may badly impact the South may not have the same effect in the North.
Lord Best also highlighted the opportunities brought to the North through the Metro Mayoral powers and devolution, offering the chance for large scale planning, alongside other investments like transport.
Affordability in the North – the solutions
A major issue in the North for delivery is the southern focus to Government policy, which enables the South to grow but leaves the North behind. Northern issues are not understood: the nature, type and quality of housing in the North, the community’s developers and working with the North, economic decline, etc. Policy makers are needed, (linking with transport), to understand the different nature of the issue. Above all, we need policy makers to listen to Northern voices.
Discussion points were raised in this session which covered the following:
Poor property investors coming into the market is a problem, they have no idea of how to manage property.
Affordability is not just about social rent, tenure is also key. We need good quality rented homes in places with low income.
Demand is outstripping supply, linked to this is the flawed policy of Right to Buy, which encourages Buy to Let investors and not home ownership. The council must then buy back or pay benefit for these properties.
It is clear that we need more and better-quality homes at the right price. Funding these is not an issue, with generous grant rates and institutional investors coming into the picture. There is a key opportunity in providing good homes for older people. We mustn’t just focus on the numbers, quality and place is key too.
Affordability is very much an issue for the North. For example, homeownership has fallen more for under 35s in the North than for England as a whole in the last decade. The PRS has also grown less in London than for the whole of England, and has doubled in the North – so a London centric view is wrong.
The Northern demand for social housing is also on a similar level to that in London, which ought to drive council’s behaviour; there is a shortfall in social housing in the North compared to that in London, despite this demand.
Transport links in the North are key to improving the empty home problem and ultimately, the PRS must be improved. Desire to own is really a desperation to own for many, because of the awful conditions they experience in the PRS. The risk is that people will turn to products that don’t work for them – shared ownership, bad lease deals etc, whereas in reality, a good quality and affordable rental option may be much more suitable. A key solution suggested, is to offer greater security of tenure. If the PRS can be improved, much of the demand for affordable ownership products or affordable options that don’t involve social rent may evaporate.
Homes England stated that we should recognise the North’s great track record on building. Even when the numbers are right, and targets are being hit, there are evident shortfalls in certain areas. Homes England are moving away from a purely administrative programme of grant funding and managing targets to a more mission led organisation, keen to intervene actively. Danielle Gillespie, General Manager, Homes England noted that there is no cash issue at their end and they now focus on working in targeted ways in specific locations. This is the conversation Homes England are having with partners in localities and Danielle stressed the importance of using data and analytics in identifying what it is we need to achieve in different areas.
If you would like to submit evidence to the Affordable Housing Commission you can do so on their website.