Strategic approach to housing
Paul Muir
April 22, 2024

Housing Crisis, which housing crisis?

Over recent months there has been some significant coverage in the press and on podcasts about ‘The Housing Crisis’ and how we might address it successfully.

Over recent months there has been some significant coverage in the press and on podcasts about ‘The Housing Crisis’ and how we might address it successfully.  I am sure I have missed a lot of the coverage so happy to be corrected by any of you if this blog has overlooked something insightful recently.

There appears to be a general consensus that there is a housing crisis, it would be hard to argue against the statistics with over a 100,000 households in temporary accommodation, about 30% of 25 to 29 year olds still living with their parents, falling standards of housing quality and safety across social and private rented accommodation,  and house building stuttering along below target levels.   And in the back ground we can hear the sound of housing ladders being pulled up and secured out of the reach of generation rent.

The question I am mulling on is not ‘is there a housing crisis?’ but which housing crisis are people actually talking about.  My sense is that there are multiple connected crises going on at the same time - more of a housing omni-shambles. And it appears to be worse now than I can remember it being at any time over the last 25 years.

I don’t think we can arrive at a point where everyone has a home that is affordable, sustainable, desirable and meets their needs unless we first agree that having a HOME is a basic human right that should be enshrined in law; secondly until we bring together the different housing crises and treat them as a complex interlinked systemic problem.

The following is not my attempt to come up with a killer analysis and a neat solution, it is more the start of a mull on some of the elements of the story.

What are some bits of the crisis and how do they interlink?

Nick Bano in his recent book ‘Against Landlords : How to solve the housing crisis’[1] makes a cogent argument that the root of the housing crisis is firmly embedded in the capitalist mechanics and economics of the private rented sector.  As an aside the historical context he sets out is fascinating and well worth reading for itself.

It is hard to disagree with much of what he writes. He made me rethink one of my initial responses to the news in the Autumn Statement that Local Housing Allowance rates were being raised (even if it was only a one off) that this would be helpful for people on low incomes and benefits even if it was a temporary fix.

Stupid of me not to twig immediately that rents would just go up as quickly and leave most people on benefits exactly where they were and potentially push up rents for people not receiving LHA.  Recent figures from Savills and Zoopla indicate that as of the beginning of April rather than the new LHA rate being at the 30th percentile in the market it is effectively only at the 10th percentile in most areas of England and this will undoubtedly drop further.

It always be thus as LHA is basically a way of the government redistributing vast amounts of cash from the tax take straight to landlords, many of whom offer a very poor service. Is this evidence that tinkering with one element of the omni-shambles as a single issue can make things worse not better?

I won’t rehearse the whole analysis, read the book or listen to one of Nick’s podcasts, but he does make the case that the economics of renting and house prices are so intrinsically linked that we won’t break out of a cycle of highly unequal distribution of housing resources, and housing  wealth,  until the private rented sector is closed down and social housing, and other forms of collectivized housing, are re-established as a high quality and truly affordable alternative.  

I would add to the analysis that until social housing is no longer seen as a residual housing option but as a socially valued one we will continue to see examples of poor quality homes, housing management and low new build rates.

The bottom line is that for those of us who are home owners the value of our homes are directly linked to rental values and yield in the PRS.  In the coming election who is going to campaign for a drop in the value of most people’s single biggest financial asset?  Who is going to risk losing the votes of the 2.5 million landlords in England?

My one big caveat about Nick’s thesis is that I think that his remedy (ending private renting and building up social rented stock) addresses just one, or at most two, of the strands of the issue not the whole picture.  Here are some more of the elements I think we should consider.

Another significant element of the current omni-shambles is the distribution of housing resource capacity – e.g. over and under occupation across the country, second home ownership etc.   In his excellent book ‘All that is solid’ [2]Danny Dorling made a very compelling case that rather than the UK having a housing shortage we have a serious housing resource distribution issue.

For example houses that are under occupied (current figures suggest as many as 60% of homes are under occupied)  set against chronic over crowding in some parts of the market. Whilst the book is now over 10 years old it still has relevance, perhaps even more so given the rise in the number of homes that are now full time on Airbnb or are second homes used sporadically.  Hastings is a good example of the impact of some of these pressures.

We downsized about 5 years ago from a 5 bedroom house to a 3 bedroom house in neither of which our grown up kids in ever lived. Even given the mammoth down sizing effort we made (including taking 20 boxes of paper back books to the local charity shop) we are still under occupying in our nominally three bedroom house.  

My partner firmly believes that I was keen to downsize for two reasons, a) that I could retain some ‘right on’ credentials with housing peers and b) because it coincided with me going part time and doing more house work I was just limiting my exposure to cleaning.  In my defence I have to say it just felt wrong for us to be living in a house designed for such a big family, oh and we made some cash out of it.

Both books argue that compared to other European countries we do not have a significantly different ratio of population to homes - the big difference is the dominance of home ownership and distribution of housing space in the UK.  Yet we have more homelessness and a more unbalanced housing market than almost any other country in Europe, Ireland being the only possible exception.

Another strand is Right to Buy which is the policy that just keeps giving, particularly if you happen to be lucky enough to have bought your council house or inherited one that someone else bought. Far too many local authorities are now paying through the nose to use their previous stock as temporary accommodation.  Plus the increased LHA now going to pay the higher rents.  The receipts of that windfall are not being ploughed back into new build or refurb of old properties it is effectively going straight out of the market and into landlords’ bank accounts.

Underpinning all of the above is our fetishisation of home ownership as both a route to financial security and a marker of personal success.  How many of us are relying on the equity in our homes to pick up the slack and pay for any care we might need as we get older?  If social care was properly funded through the tax system would we be less worried about the value of our homes falling? How many of us have used equity (‘locked in’ or realised as in our case) to help fund deposits for our children to buy homes? If housing resources were more equally distributed and renting was more secure would the Bank of Mum & Dad be one of the biggest lenders in the UK?

It's simple we just need to build more homes and everything will be OK.  It is a tempting argument and clearly there does appear to be a need in some parts of the country for more good quality truly affordable homes, though the observant amongst you might say I have just fallen for the chimera of simple solutions to complex issues.  

It ‘feels right’ to be arguing for more new build but maybe I am just suffering from false consciousness and need to rethink that.   Unlike other ‘products’ building more and more homes does not seem to bring down individual prices, rents etc (back to Nick’s book) our whole economy is so wrapped up in the value of houses that it can’t do that in any sustained way without causing wide spread financial havoc.  It is feasible that building more homes will only have the impact we want if we address the other elements of the omni-shambles, to rely on it as the only solution may in fact, and counter intuitively, make things less equal and worse.

For example we have significant amounts of empty properties (some of them new build) and properties that are of substandard quality and safety.  We have some of the least energy efficient homes in Europe and increasing numbers are prone to flooding.  Using and upgrading empty homes is a challenge that many areas aren’t equipped to tackle.  Retrofitting green energy solutions across all housing stock is a no brainer yet we still can’t quite get it together.  Lets not even talk about the standard of some new builds.

The threads above are only a tiny part of the story and each one deserves more space than I am giving them here, as I said this is more of a mulling exercise than a solution focused one. Having said that ...

What can we do about it ?

There aren’t any quick or silver bullet solutions to the state of housing in this country however I think we can get started on sorting it.

We can lobby those we work with, work for, and those that want our votes to encourage them not to leap to simple solutions or silver bullet options that may in fact make things worse.

We should be lobbying for a National Homes Strategy that at its heart has the premise that safe, affordable, sustainable, secure and life affirming homes are a basic human right.

I would argue that any incoming government in England needs to a) look to the devolved nations and across Europe to see what others are doing that is working and not working; b) undertake a serious investigation into the fitness of the housing market to deliver homes for people that they can afford, be safe, secure and happy in.

I am not a big fan of ‘Commissions’, royal or otherwise, but I think the current omni-shambles and the complex set of issues and drivers needs some serious thinking time (definitely at least a three pipe problem as Sherlock Holmes said).

Right it is time for me to do the cleaning now, every three months whether the house needs it or not!

[1] Nick Bano: Against Landlords; How to solve the housing crisis.  Verso 2024

[2] Danny Dorling: All that is solid. Penguin 2014