Gordon Brown has made clear that housing is a policy area he believes can win him many votes at the next General Election. Already announced are plans to increase the number of new homes built annually from 200,000 to 240,000 by 2016. Next week much more detail of the new Government’s housing strategy is expected with the publication of a green paper. If Brown can enable large numbers of younger voters currently priced out of the market to fulfil their dream of home ownership, he will be obviously become very popular.
Housing also has the potential to be almost as important as welfare reform in reversing poverty. As well as benefits traps, punitive marginal tax rates and couple penalties, the poor are also increasingly trapped in ghettoes of social housing where both aspiration and opportunities are scarce. Two facts here are particularly startling:
- In the UK’s 3.8 million social housing units, more than half the adults of working age do not have paid work; and
- If you are living on a council estate and have two people of working age on either side of you, the chances of them both working is just one in 10.
Waiting lists for the greatly diminished stock of social housing have doubled to 1.6 million in 10 years. Such demand is fuelled by the chasm in prices between social housing and the alternatives: a housing association flat may cost £70 per week against £180 for a comparable property in the private rented sector. As it is so cheap and tenancies are often effectively for life, the stock of social housing has been gummed up by an ageing populace. It can therefore only be expected that most of the out-of-work tenants are not be prepared to move to find or keep work with poor prospects of getting equivalent accommodation elsewhere. As a result only a relative handful of social residents move each year to get jobs.
So, what can be done? Research by the Joseph Rowntree Foundation this week confirmed the increasing geographical segregation of the poor from the rich. The need to create mixed communities with a diverse housing stock is a cliché, but it must be a top priority to prevent the poorest becoming progressively further detached from the mainstream, confined to welfare ghettoes where few have ever worked.
Measures aimed at guaranteeing that the extensive new house building around the country facilitates mixed communities will almost certainly be included in the green paper. Less likely to appear would be any moves to limit the durations of tenancies in social housing. However such a bold move may be necessary to ensure social housing is allocated to the most deserving. Furthermore, with much of the widening wealth gap attributable to the rapid appreciation of most peoples’ main asset – their home, better-off tenants of social housing have been missing out on the opportunity to build-up a significant asset through owner-occupation or part-ownership.
As LSE professor John Hills stresses, creating a new home to be part-rented, part-bought costs the taxpayer only half the £60,000 required to establish a new unit of social housing, yet they account for just 1% of the owner-occupied stock. Without a huge expansion in this section of Britain’s housing stock, it will be impossible to enable current tenants of social housing to bridge the growing gap between where their current situation and full owner-occupation.
The Conservative Party is responsible for the most bold and empowering housing policy in the last fifty years. David Cameron, now ably supported by Grant Shapps, must quickly demonstrate that the Tories are best placed to ensure housing becomes the engine of poverty eradication and social mobility it could be. As the largest party of local government, mobilising the party’s council leaders to do all they can to create more social housing, large increases in shared equity schemes and the development of diverse, mixed communities would be a great place to start.