Housing crisis ‘at its worst since 1922′

More people are languishing on housing waiting lists than ever before due to a chronic shortfall in new house-building.

The National Housing Federation (NHF), which represents housing associations, published research on Saturday highlighting an insufficient number of homes built in every region of the country since 2002.

It claimed a record 4.5 million people were on housing waiting lists and more than 2.5 million people were living in overcrowded conditions.

NHF chief executive David Orr said: “Failure to build the right number of homes across the country means that thousands of households are needlessly being condemned to the misery of poor and unsuitable housing.

“The depressing results of our research show that too few homes were being built in every region even during the boom years and that urgent action is required to get housebuilding back on track in every single part of the country.

“If we fail to build the right number of homes now, we will simply store up more problems for the future. Waiting lists will grow and homelessness and overcrowding will get worse.”

Oldham West and Royton Labour MP Michael Meacher has been campaigning about the issue for years.

“Aside from World War II, the number of homes being built this year is the lowest since 1922 and the recession has had a devastating impact,” he said.

“The whole housing situation is dire and it’s by far the greatest need in Britain today.

“Not only does there need to be more money allocated for new builds but the large number of homes lying empty should be discovered and brought back into use.”

Housing targets are currently drawn up by regional assemblies – in London by the mayor – in consultation with local authorities, government housing agencies and regional government offices.

A Communities and Local government spokesman said: “Since June Housing Minister John Healey has given the go-ahead for £4.2 billion government investment for councils, housing associations and private developers to build over 75,000 much-needed new homes across the country.

“The government’s ambition to build three million homes by 2020 is a measure of the scale of housing needed across the country and the challenge that still lies ahead.”

Taken from Morning Star

Housing charity Shelter targets councils

Housing charity Shelter and trade unionists have lambasted councils up and down the country for failing to provide adequate social housing.

Releasing a league table ranking the performance of local councils in social housing delivery, Shelter found that 98 per cent had failed to provide the affordable housing needed in the area.

In addition 90 per cent of councils had provided fewer than half of the homes they said were needed in their area during the year, the charity found.

Shelter said only eight out of the 323 local authorities in England had managed to provide enough affordable homes to meet demand during 2008-9.

The Local Government Association was quick to rubbish the charity’s claims, citing “flawed research.”

But Shelter chief executive Campbell Robb said: “We know that the recession has created a difficult climate for housebuilding, but these figures clearly show that councils must work far harder to ensure more desperately needed affordable homes are provided if they ever hope to meet the housing needs of their local population.”

He said that with council budgets set to be slashed, it was important that all parties made the provision of affordable housing a top priority.

Unite assistant general secretary Jack Dromey blamed Tory councils for creating much of the pain for families trying to get on the social housing ladder.

Citing the Tory-run Hammersmith and Fulham council, which ranks 211th out of 323 councils surveyed, Mr Dromey said: “David Cameron’s flagship council Hammersmith and Fulham has drawn up plans to demolish 3,400 council homes, end security of tenure and hike up social housing rents to market levels.

“Knocking down council homes, ending security of tenure and hiking up rents to gerrymander votes is the politics of the discredited Dame Shirley Porter of Westminster past.”

Mr Dromey will also be speaking at the Defend Council Housing national conference today at TUC Congress House in London.

Taken from Morning Star

Home repossessions hit 14-year high

The number of people who had their homes repossessed reached a 14-year high during 2009, figures have shown.

The Council of Mortgage Lenders (CML) said 46,000 homes were repossessed last year, the highest number since 1995.

That was an increase of 6,000 on the total for 2008, but was lower than the CML’s most recent forecast of 48,000.

Lenders took 10,200 properties into possession in the fourth quarter of 2009 – 13% lower than in the third quarter.

In December 2008 the CML had predicted 75,000 homes would be repossessed in 2009.

However, in an interview with Radio 5 live, Housing Minister John Healey caused controversy when he said that, for some people, having their home repossessed was the best thing that could happen to them.

The shadow housing minister Grant Shapps said ministers had “lost touch with reality” and called on Mr Healey to apologise to “the tens of thousands of families who have lost the roof over their heads”.

‘Challenging year’

In terms of payment difficulties, 188,300 mortgages ended the year with arrears equivalent to at least 2.5% of the outstanding mortgage balance, the CML said.

As it has turned out, things are not nearly as bad as they were in the housing slump of the early 1990s.

Thanks to a combination of ultra-low repayment costs, tougher court rules on repossessions, and a variety of government schemes, fewer people than anticipated are either in arrears with their mortgages or have been evicted.

Last year’s 46,000 repossessions were just 61% of the total recorded in the peak year of 1991, when lenders seized 75,500 homes.

And in the past few months the position has started to improve. The CML’s statistics show that short-term arrears and home seizures eased off as 2009 wore on.

But lenders are worried it may not last. About 75,000 borrowers are stuck with stubbornly high arrears.

Any rise in interest rates may well be too much for both them and their lenders, prompting a fresh bout of repossessions.

This was lower than the total of 195,000 it had forecast, and 3% lower than at the end of the third quarter of 2009. But it still marked a 3% rise on the end of 2008.

CML director general Michael Coogan said: “The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur.”

As a result, the CML said that its current forecast for 2010 of 205,000 arrears cases and 53,000 properties taken into possession may be “a little pessimistic”.

However, Mr Coogan added: “We are not out of the woods yet – 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise.”

The housing charity Shelter said the number of homes being repossessed was still “completely unacceptable”.

“Behind each one of these numbers is a heartbreaking story of a family losing their home and having to rebuild their lives,” said Campbell Robb, the charity’s chief executive.

“The tragedy is most people simply do not need to be repossessed. By giving clear help and advice to homeowners at risk of repossession, Shelter and other organisations successfully helps almost four out of five households avoid the immediate loss of their home when facing court proceedings.”

Court actions

Separately, figures from the Ministry of Justice showed that the number of potential repossessions in the pipeline in England and Wales is falling.

The number of possession actions – the first stage of an attempted repossession by a lender – launched in the courts in the fourth quarter of 2009 was 20,061. The number was 15% fewer than in the previous three months and 26% fewer than at the same time last year.

The number of possession orders agreed by judges also fell to 16,928 – 15% fewer than in the previous quarter and 42% down on the same period of 2008.

In November 2008, the government introduced the mortgage pre-action protocol which said lenders would have to demonstrate to the courts that they had exhausted all possibilities before going ahead with a repossession.

And last year, the government launched the mortgage rescue scheme, which permits not-for-profit housing associations to buy homes from people struggling to pay their mortgage and then allows them to continue living there by paying “affordable rent”.

Meanwhile, the Treasury Committee said that it would be launching a follow-up inquiry into mortgage arrears after publishing an initial report in August 2009.

The inquiry will focus on households struggling with mortgage arrears and those at risk of repossession.

Taken from BBC News

Homeless young people speak out

Homeless, forgotten, sleeping where they can. Wearside’s homeless young people need support.

Today they had their say on plans for a new £1million centre to train, support and house homeless 16- to 21-year-olds in Dundas Street, Monkwearmouth.

Charity Centrepoint says it will create a top-class facility to help give the young people a better start in life, but residents have mounted a campaign against the centres, fearing it will add to the area’s problems.

Councillors will hear both sides at a meeting before making a decision on Centrepoint’s planning application, but two homeless young men have told the Echo that too often the voices of those in need go unheard.

The Echo has given them false names to protect their identity.

David, 21, gave up his £200-per-week job in a factory in Doncaster and moved to Sunderland two years ago to live with his girlfriend. But the relationship ended soon after, leaving him homeless.

Now he bunks in with friends where he can, constantly moving round addresses in Sunderland, Washington and Murton.

He thinks it is vital that Centrepoint gets its facility off the ground as soon as possible to help people in his situation.

He said: “We’re labelled as thugs or druggies or trouble-makers. There are only a few people who give us that label, but we’ve got to live with it until we get to a certain age and situation and it just gets passed on to someone else.

“But I think as long as there is proper security and surveillance at the centre, there won’t be any trouble.

“A lot of us are lucky because we have care-of addresses, so we can get Jobseeker’s Allowance, but it’s hard to find a job and somewhere to live.”

David is one of the youngsters getting help from Wearside Women in Need’s Housing Action Programme (Haps), which works with 16- to 25-year-olds who are homeless or at risk of homelessness.

Many have support needs around drugs, alcohol or mental health issues.

Haps has 38 accommodation spaces, but operates a waiting list.

Peter is another homeless young man getting help from the organisation.

He said there was a desperate need for facilities such as the one proposed by Centrepoint – especially in the Washington and coalfields areas.

Peter had to leave his family home in Washington after falling out with his parents and siblings. He now sleeps where he can.

He wants to see Centrepoint build its homelessness centre in Washington.

“There are a lot of other homeless people in Washington and they have to go through to Sunderland for support. There are more hostels there, but there’s not much here.

“It’s further away, and if you have people here – friends or family – it’s taking you further away from them.”

Rich-poor divide ‘wider than 40 years ago’

The gap between rich and poor in the UK is wider now than 40 years ago, a government-commissioned report says.

“Deep-seated and systemic differences” remain between men and women and minority groups in pay and employment, the National Equality Panel found.

It said in areas such as neighbourhood renewal, taxes and education, policy action was needed to limit inequality.

The issues raised would need “sustained and focused action”, Equalities Minister Harriet Harman said.

“But for the sake of the right of every individual to reach their full potential, for the sake of a strong and meritocratic economy and to achieve a peaceful and cohesive society, that is the challenge that must be met,” she added.

Earning power

Apparent discrimination against people from ethnic minorities was revealed in the report, with those from nearly every minority group less likely to be in paid work than white British men and women.

The panel – set up by the government in 2008 – found that despite women up to the age of 44 having better qualifications than men, men were still paid up to 21% more per hour.

But the authors pointed out that some of the greatest differences come within social groups.

Among women, many work part-time, earning less than £7.20 an hour, much less than the median pay of £9.90 across the country.

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“Most political parties and people subscribe to the ideal of ‘equality of opportunity’,” panel chair Professor John Hills, of the London School of Economics, told the BBC.

“The challenge that our report puts down to all political parties is how do you create a level playing field when there are such large differences between the resources that different people have available to them.

“Things that allow you to buy a house in the catchment area of a good school or allow you to help your children get on the housing ladder. These are very big differences.”

The study said that the type of job and pay a parent had could have a cumulative effect throughout a person’s life, setting them on “tracks that make all sorts of differences”.

By retirement, the difference between rich and poor can be “colossal”, the report added.

The panel pointed out that half of those who have worked in the top professions have net assets worth more than £900,000, while a 10th of those who have had unskilled jobs have property, savings and possessions worth less than £8,000.

BBC social policy correspondent Gillian Hargreaves said the report would make “awkward reading for the government” as Labour had made tackling inequality a priority.

Theresa May, shadow minister for women and equalities, told the BBC that Labour’s policies had failed.

“It is shocking that after 13 years of a government that wanted to focus on child inequality, we’re still in this situation,” she said.

“Labour has had a one-dimensional approach, looking at the symptoms, not the causes. For example, one in six children are growing up in a workless household. We need policies that can make equality a reality.”

The Liberal Democrats’ children, schools and families spokesman, David Laws, said Gordon Brown’s government had “run out of ideas for tackling the lack of opportunity for so many children and the chasm that separates the rich from the poor”.

Full report – An anatomy of economic inequality in the UK [4 MB]

Summary – An anatomy of economic inequality in the UK [1.79 MB]

Taken from BBC News

Shortfall of 500,000 affordable homes if budget is cut, warns housing group

The government will struggle to build even half of its target of a million affordable homes by 2020 if the housing budget is not exempted from public spending cuts, a housing campaign group says.

If the cuts to the house-building budget suggested by November’s pre-­budget report go ahead, the number of affordable homes built by 2020 will be 444,000, says the National Housing Federation.

The NHF is calling on Gordon Brown to make the house-building budget “untouchable” and give it the same status as hospitals, schooling and policing, areas the government said in November they would ringfence while they trimmed back in other areas.

In a recent interview the housing minister, John Healey, refused to rule out cuts.

Housing is a pressing political issue with 4.5 million people on waiting lists for affordable housing, and the issue is seen as a driving factor in the alienation of those on lower incomes – exacerbated during the economic downturn – and as a recruiting ground for far-right parties.

In 2007 Brown pledged to meet the demand by building 3m houses by 2020 of which a million would be affordable, but at the moment the NHF predicts that only 162,000 of that million-mark target will have been built by 2011. If the budget is further hacked back, the number of new affordable homes will fall by 556,000 and the government could take a further 18 years to build the million.

The effect could be a further 1.25 million people joining the waiting lists.

The NHF has used the figure provided by the Institute for Fiscal Studies, which has estimated cuts of 17.98% for unprotected government departments.

Alongside diminished resources for house building, cuts of 17.98% over the next 10 years will also lead to 278,000 jobs and apprenticeships in the construction industry either being lost or not created.

The near-18% budget cut becomes proportionally much bigger a reduction in house building because the sector is resigned to losing billions of pounds worth of extra public investment over the next decade; funds anticipated by the government when it set out its 2020 housing targets.

Within the government’s targets, about 280,000 homes should be built over the next three government-spending periods, but if the 17.98% budget cut is applied to housing only 99,000 affordable homes will be built between 2011/12 to 2013/14, and if the same cut is applied between 2014/15 to 2016/17 only 91,000 would be built. If maintained at the new low level, between 2017/18 to 2019/20 only 93,000 would be delivered.

The NHF warned that the poorest communities would be the hardest hit by the proposed cuts to housing, as bad living conditions were closely linked with poor health and educational attainment and higher crime rates.

The group’s chief executive, David Orr, said: “Ministers should give funding for the house-building programme the same untouchable status as health, education and policing – and protect it from the coming savage cuts.”

Taken from guardian.co.uk

House prices increase by 273% in 50 years

According to a new study by Halifax, house prices in the UK have increased by 273% in real terms since 1959.

According to the study, once retail price inflation is accounted for, the price of housing has increased at an average rate of 2.7% a year, outstripping average wage increases amounting to 2% yearly.* The fastest increase in house prices occured between 1999 and 2009, when they shot up by 5% a year.

Meanwhile, access to council housing has shrunk. The percentage of the population living in council housing expanded throughout the 1960s and 70s, peaking at 33% in 1981. With the introduction to right-to-buy under the Thatcher government, and failure to build new social housing stock in recent decades, the proportion of the population in social housing now stands at 18%.

The increased proportion of owner-occupiers – from 43% in 1961 to 68% in 2009 – chimes with the picture of an increasingly debt-saturated economy, as easy credit fills the widening gap between increases in wages and the increasing standard of living.

*However, “average” wage increases frequently do not account for increasing levels of income inequality. “Average wages” are often the median wage, meaning that a small section of the population enjoying significantly increased incomes can push up the “average” while the majority of the population experience meagre or nonexistent growth.

Taken from libcom

Shelter warns of growing credit card problems

A million families have resorted to using credit cards to pay their mortgage or rent during the past year, Shelter has revealed.

The housing charity said that around 6 per cent of households had used their plastic in order to keep up with housing costs over the past 12 months.

Working-class people were most likely to have resorted to using debt to cover their mortgage or rent, but a fair number of higher earners also admitted that they had been forced to use their credit card in this way.

Shelter director of policy and campaigns Kay Boycott said: “It is a shocking discovery that over a million households in Britain are in such desperate circumstances that they need to borrow money on credit cards to pay for the basics.

“If people are struggling to the extent that they fear losing their home, increasing credit card debt can’t be the answer.”

The group warned that people who had used their credit card to cover their housing costs could find themselves homeless, particularly as defaulting on their credit card repayments could lead to their property being repossessed.

Taken from Morning Star

MPs attack £5bn government bill for ‘grotty’ new housing

The government risks repeating the mistakes of the postwar housing boom by wasting hundreds of millions of pounds on funding “grotty” new homes, say MPs.

The Homes and Communities Agency, the national housing and regeneration body for England, which has an annual investment budget of more than £5bn, has admitted that 27 of the private-sector projects it has bailed out scored five or less out of 20 on the industry’s Building for Life benchmark, with two scoring just 1.5.

Homes failed on a range of basic measures, including poor space standards and over-reliance on single-aspect dwellings; inflexibility; low sustainability standards; and poor compatibility with neighbouring properties.

The HCA insists it is providing much-needed homes and helping the stricken building industry, but Alan Howarth, a Labour peer and former architecture minister, told Building Design magazine it had ignored its statutory duty to promote high-quality design. Howarth, who helped draw up the legislation that gave birth to the agency, promised to hold it to account by raising the matter in the Lords next month. “I don’t think there can be any excuse at all for the HCA sanctioning a new wave of grotty housing,” he said.

His worries were echoed by two members of the communities and local government select committee, Labour MP Clive Betts and Tory Paul Beresford, who called on the committee to carry out its own investigation.

The HCA’s chief executive, Bob Kerslake, said the agency had to balance its “commitment” to design with the urgent need to stimulate the economy. The Building for Life assessment was important, he said, but the HCA attached equal significance to the work of its local teams with on-the-ground knowledge.

Taken from guardian.co.uk

Benefits changes force tenants into poverty

A leading charity has criticised the government’s local housing allowance saying it is plunging claimants into poverty.

Housing charity Shelter said the local housing allowance (LHA), a new way of paying housing benefit which was introduced last year, has left thousands of tenants struggling to manage their finances – with many now in danger of losing their home.

LHA was intended to promote fairness, choice and personal responsibility among claimants by paying the money directly into their bank accounts rather than to their landlord.

But a survey of 450 people carried out by the charity found that for 81 per cent it had been “fairly” or “very difficult” to find a home that was affordable.

Six in 10 said they had had to make up shortfalls in their rent themselves.

Many respondents claimed that they had only been able to find the extra money by going without essentials such as food and heating.

Shelter said part of the problem was that the boundaries used to calculate the levels of the allowance people receive – known as broad rental market areas (BRMA) – were too large.

As a result, people in expensive parts of the BRMA were being forced to move to cheaper areas or find the shortfall in rent themselves.

But it warned that in cheaper areas, anecdotal evidence suggested some landlords were raising their rents as they knew the LHA would pay out more than they were charging.

Ninety-five per cent of people receiving the LHA said they were struggling to manage their finances, while the new system had contributed to more than a quarter of people falling behind with their rent.

A growing number of landlords are allegedly refusing to accept LHA claimants as tenants, with 60 per cent of people receiving the benefit saying they had struggled to find a landlord who would let them a property.

Shelter director of policy and campaigns Kay Boycott said: “Under this system tenants have no choice about whether their benefit is paid to them or to their landlord.

“Many claimants are already struggling financially, so when they get rent money paid into their bank account there is a huge temptation to spend it on necessities such as food or bills rather than paying their rent.

“It is vital that the government makes urgent changes to LHA to ensure claimants do not continue to be disadvantaged.”

Taken from Morning Star