Expensive houses or really expensive houses?

Houses are getting more and more expensive in the UK.

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Expensive houses in London are getting more expensive at a fast rate

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Expensive houses in inner London are getting more expensive at an even faster rate.

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The gap between the cost of the more expensive houses and averagely priced houses is getting bigger and bigger in London, while it is quite stable in other parts of the country.

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Similarly, the gap between how much an average home costs and how much a cheaper home costs is getting bigger and bigger in London, but not in other regions.

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What’s going on here? It’s partly a matter of not enough homes being built. If there were more homes being built in London then house prices would not go up so quickly.

However, is there something else at work here? Larry Summers has argued that the rich countries are experiencing ‘secular stagnation‘. Economies with low interest rates and low growth rates don’t offer investors many places to put there money. It’s perhaps to be expected that in these circumstances rich people from around the world invest their money in property in inner London.

Are there slums in the UK?

Do slums exist in the UK? It’s more complicated than that.

Peter Marcuse’s blog has a ‘critical discussion’ on the nature and role of slums. This lead me to ask whether there are slums in the UK, or, more specifically, whether housing in poorer parts or areas of the UK is of substantially worse quality that in richer parts.

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Many people’s initial reaction to this would be to say of course housing in poorer areas is of a worse quality than in richer areas.

It’s certainly true that, as this chart shows, the poorer the area the more likely it is that housing will have damp.

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However, if we look at a different wider measure of housing quality (the decent homes standard), the picture is more complex.

There are a similar percentage of homes that don’t meet the decent homes standard in the poorest areas of the UK as there are in areas of average wealth.

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The picture gets still more complex if we look at a different way of dividing areas, not by wealth but by whether they are urban or rural.

This chart shows us that homes in rural areas are far more likely to fail the decent homes standard than homes in city centers which are in turn more likely to fail the decent homes standard than homes in suburbs.

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Part of the explanation for this complex picture is that social housing in the UK is often kept to a good standard, while lots of private rented housing is not kept up to standard.

What to conclude from this? Perhaps the idea of area based housing initiatives in the UK is wrong headed, and a strategy to improve the quality of housing in the UK should focus on giving individual homeowners, landlords and tenants, the right support and incentives to bring all homes in the UK up to a decent standard.

Where should homeless people live?

While the number of people who experience homelessness has been rising, the number of bed spaces in homeless hostels has been declining.

  • In 2010 there were 43,600 bed spaces in homelessness accommodation services. Today, this stands at 36,540.
  • In 2010 there were 1,768 people sleeping rough in England (using the government’s measure). In 2014 there were 2,744.
  • In 2010 Local Authorities accepted 42,390 household as homeless, in 2014 they accepted 53,250 as homeless.

Many homeless hostels were funded by through a government scheme called “supporting people”. This money is no longer ringfenced meaning councils can use the money for other things. Given the overall cuts in funding for councils, this is exactly what many have done.

The effect is that many single homeless people end up living in private hostels. While the anonymity of “dosshouses” can be attractive, it is a highly insecure way to live and not one that aids many people’s recovery.

Is this the future? More people being made homeless and fewer specialist services to support them. Sadly, a combination of austerity and so-called localism points that way.

The so-called ‘Housing first‘ model offers a glimpse of a different future. The model essentially works by giving homeless people a flat (i.e. paying their deposit and rent) and linking them with a worker who sees them for hours a day, helping them in whatever way is best.

Using this method Utah has seen a 72% reduction in the number of homeless people.

A bold Labour candidate for the Mayor of London could announce a pan-London Housing First scheme and end homelessness in the capital within 8 years.

Housing the homeless

The New Statesman doesn’t care about homeless people.

Their recent leader called for an increase in the number of homes being built in this country “For the sake of growth and our young people”. They didn’t mention the need to prevent homelessness once.

It is of course a pressing issue that the average age of a “first-time homebuyer without parental assistance” is now 37. But is it as significant as the terrifying increase in the number of homeless people?

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Over the past 5 years almost all boroughs in London have seen an increase in the number of people sleeping rough.

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The New Statesman is not alone in failing to link this problem with the challenge of how to build more homes. The recent, and in many ways comprehensive, Lyons review included just two paragraphs on “housing for vulnerable groups” and a couple of mentions on homelessness in a report that is nearly 200 pages long.

I’m not suggesting that homelessness is simply caused by high rents or a lack of affordable housing. I am suggesting that building more homes would reduce the number of people who have to spend even one night sleeping on the streets.

We are currently building nowhere near as many homes as Boris’ London Plan says are required.

4As long as we continue to build far fewer new homes than are needed it will be harder to prevent people becoming homeless, especially now the biggest cause of homelessness is people losing their private sector tenancy.

Many journalists and politicians do not consider preventing homelessness and helping overcrowded families as significant an issue as supporting economic growth or helping first time buyers afford a deposit.

Given that I have written numerous pieces on the need to increase the number of houses being built in Britain, it’s perhaps a bit churlish to criticize others who are calling for the same thing. The idea of building more homes is an excellent one, partly because it would make it easier for young people to buy their first home, but also because it would help prevent homelessness.

Can community development combat social exclusion?

Building open, inclusive, vibrant neighbourhoods is an important part of combating the worst symptoms of social exclusion. In fact, it is probably more important than supporting the development of charities and the voluntary sector in general.

People who launch initiatives to bring neighbours together are often accused of having a deaf ear for the problems of the most marginalised in society. Community development can be caricature as supporting retired, middle class people to run fetes or hipsters to set up incubation spaces.

However, effective community development can help neighbourhoods to be more welcoming places, where people who might otherwise feel excluded are able to meet people and build a support network.

This chart shows the relationship between the % of people in a local authority who say that they feel like they belong in their local area against the % of people receiving adult social care who are satisfied with their level of social contact.

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The more people feel that they belong in a given neighborhood the more likely people who receive adult social care in that area are to feel that they are satisfied with their level of social contact.

This chart plots the extent to which there is a ‘thriving third sector’ in a given local authority and the % of people receiving adult social care who are satisfied with their level of social contact.
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Whether or not an area is more or less supportive of charitable activity seems to have little to do with whether people who receive adult social care are happy with their level of social contact.

This shouldn’t surprise us, since lots of charities are not mainly or even tangentially interested in building open and welcoming communities.

It doesn’t particularly help someone with mental health problems to make new friends if there are lots of donkey sanctuaries in their area.

However, when organisations such as Civic Systems Lab are effective in bringing together people in a fun, creative and open way, they can help build neighbourhoods where more people feel like they belong and this in turn is likely to benefit people who are often marginalised or excluded.

This is significant since research has found that social connections are one of the principle components of recovery.

In fact, rather than replicating existing patterns of exclusion and inequality, community development, if done properly and effectively, can go some way to combating these problems.

Where is it better to live, UK or USA?

“England [sic] is just a small island. Its roads and houses are small.” – Mitt Romney

When it comes to housing, which country is best, the UK or the USA?

Here is a completely scientific and in no way impressionistic answer.

1. The number of people who own their own home is on the decline in both the USA and the UK

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Verdict: Draw

2. Far more Americans than Brits sleep rough

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Verdict: UK wins

3. Partly because there is so much more public housing in the UK than the USA

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Verdict: UK wins (showing my bias)

4. Compared to average wages, houses in the UK aren’t anymore expensive than in the USA (on average)

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Verdict: Draw

5. But American homes are a lot larger than homes in the UK (Romney was right about something)

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Verdict: USA wins

Final score: UK wins 2:1. 

Who should build our houses?

Why should the government loan money to small construction firms that build homes (at a profit)? Could this money be used in a different way to supports the development of a not for profit building industry?

These questions are prompted by the government’s decision to set aside £500 million to create a ‘Builder’s Finance Fund‘ in a desperate attempt to increase the number of houses that are built in the UK. We are still waiting for more details but it seems that the government will lend money to small and medium sized house builders.

This idea has wide support in policy circles, and has been broadly endorsed by the Labour Party and by Shelter but it is a limited idea with many downsides. 

It comes from the undoubtedly true twin observations that we are not building enough homes and that the construction industry is increasingly dominated by a small number of large house builders. These two facts are linked. These large house builders do not currently seem to be inclined to dramatically increase production.

Given this situation you can see why the government would want to create more competition between house builders. Hence today’s announcement.

This is a missed opportunity. The government could have used this moment to signal that they would support a different type of house builder. Not just small builders but value based builders.

Rather than giving cheap loans to small private house builders, the government could be doing much more to support not for profit construction companies such as housing associations or council owned construction companies (such as the one recently established by Newham council). 

Instead we are left with yet more state support for private industry.