Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by Housing Justice (AH 61)


  1.  Housing Justice was formed in 2003 by a merger of the Catholic Housing Aid Society (CHAS) and the Churches National Housing Coalition. Housing Justice is the national voice of Christian action in the field of housing. We unite Christians and churches of all denominations to work to prevent homelessness and bad housing.

  2.  Housing Justice enables local groups and churches to provide practical help to people in housing need. Through the alliance of 11 housing advice centres that Housing Justice supports we are in touch with homeless people and work to prevent homelessness and ensure adequate housing. Housing Justice's Regenerate Guide Neighbourhoods programme, funded by the Home Office, works with tenants to take the lead in regenerating estates. In total Housing Justice is active in 35 communities across the UK.

  3.  Housing Justice and its predecessors have a long history of involvement in developing housing policy. The Catholic Housing Aid Society was one of the six organisations which persuaded Stephen Ross MP to adopt the Private Member's Bill which became the original Housing (Homeless Persons) Act 1977. From 1977 to Housing Justice's formation in 2003 CHAS was involved in influencing housing and homelessness policy. CHAS took the lead in founding and administering the All-Party Parliamentary Group on Homelessness and Housing Need. Today Housing Justice continues to work with the Labour Chair and Conservative and Liberal Democrat Vice-Chairs of the Group to arrange meetings of relevance to the over 200 members drawn from both houses of Parliament.


  4.  Housing Justice welcomes the opportunity to contribute to this inquiry. Evidence from the Housing Justice Alliance of Housing Advice Centres and from informal discussions with housing professionals, churches, church based projects, tenants in the Guide Neighbourhoods and MPs indicates that housing is a concern for almost everybody is Britain today. More and more people are finding that they are unable to afford private housing and unable to access social housing. We believe that the government's five year strategy Sustainable Communities: homes for all announced in January will begin to address the problems of homelessness and poor housing but have concerns that the initiatives will do little for those with the least choice in housing.


The potential benefits of and scope to promote greater homeownership

  5.  Home ownership is an important aspiration for British people: research carried out for the government and other organisations regularly returns results showing that 90%+ of British people would like to own their own home.

  6.  The benefits of home ownership for individuals come from the increased feelings of security, control and of having a stake in their local area. In recent years, especially, the increases in house prices have delivered at times spectacular returns on the money invested and certainly better returns than would be achieved by investing in savings accounts or stocks and shares. As a result of these house price increases there is a perception that home ownership is an easy route to wealth which people who are not home owners are not able to benefit from.

  7.  The benefits of home ownership for communities come from having a more stable, settled population which makes the community more sustainable.

  8.  Governments over the past 30-40 years have stressed the benefits of home ownership and given that home ownership only accounts for 70% of housing in the UK there would seem to be scope to increase home ownership if aspirations could be met. Housing Justice is concerned however that moves to increase home ownership risk excluding those who are unable to own their own homes. More than 30% of the population do not live in owner occupied housing; the emphasis on home ownership risks overlooking their needs. Most people pass through different tenures at different times in their lives so it is important for the economy and the population that a healthy mixed housing market operates.

  9.  Housing Justice has concerns that government policy aimed at expanding home ownership will increasingly bring into owner occupation more marginal groups who may find it harder to keep up mortgage repayments if interest rates were to rise in the future or if unemployment increases significantly.

  10.  Housing Justice has concerns that interest rate rises coming on top of the record levels of consumer debt might result in large numbers of repossessions. Evidence from our central London housing advice centre suggests that home owners with housing problems already have consumer debts of £60,000 on average when they contact the housing advice centre.

  11.  Housing Justice would like to see a mixed housing market and in particular a stronger private-rented sector. We would like to see reforms to private sector tenancies to give extra security to tenants. We believe that if tenancies could be made more secure than the current six or 12 months of an assured shorthold tenancy the private rented sector would be more attractive for groups such as older people who may not want the maintenance and other responsibilities of owning a home.

  12.  If there were a larger supply of good quality rented accommodation in the private sector with security of tenure then more social housing could be freed up for those in greatest need.

The extent to which home purchase tackles social and economic inequalities and reduces poverty

  13.  House purchase has become the prime means of passing on wealth in this country between generations to the detriment of those who have not owned their own homes creating inequality between families where the parents were home owners and families where they were not.

  14.  According to the Nationwide Building Society house prices increased by almost 680% in the period 1979-2005 and almost 210% in the period 1995-2005. This growth in house prices occurred because of the high general level of inflation in the 1970s and 1980s which reduced in real terms the cost of repaying the loan. In more recent years house price increases have occurred because the country has not been building enough new homes in the private or social housing sectors.

  15.  Over the past 20-30 years house prices have outperformed shares and savings accounts in most cases. Poverty since 1979 poverty, as reported by the Child Poverty Action Group, has increased so that in the year 2003-04 12.3 million people (21.1% of the population) lived in poverty compared with 13% of people who were in poverty in 1979. Thus the increase in home ownership and house prices has not led to a reduction in poverty and inequality.

  16.  Housing Justice believes that home purchase should not be used as a tool to tackle inequality as the results are too unpredictable and unequal across the country. Housing Justice also believes that homes should be purchased primarily for habitation rather than as investments. Inequality needs to be tackled at the level of pay rather than housing—higher basic incomes and a higher rate for the minimum wage will do more to make society more equal than allowing a few extra people to buy their homes

The economic and social impact of current house prices

  17.  House prices are unaffordable for almost everyone in the United Kingdom. According to the Nationwide Building Society the average first-time buyer paid £135,526 in the third quarter of 2005 for their home and in October 2005 the average house sold for £157,107. Home ownership is thus unaffordable for most people on average salaries.

  18.  The Joseph Rowntree Foundation in 2004 looked further at the affordability of housing and found that for households with two incomes housing was unaffordable across most of the country with 21 areas where house price to income ratio was greater than 5:1 and only four areas where the ratio was less than 4:1: given that mortgage providers will not generally lend more than 3.5x joint income this means that house purchase is unaffordable across the whole country.

  19.  There is a danger that the high cost of housing today is storing up problems for future generations as people are paying for their housing rather than saving for pensions and are likely to suffer from poverty in old age. The costs of housing and lack of social housing around the country is creating a situation where communities are or will become unsustainable. There is a danger that rural areas in particular will become unsustainable as new residents such as families and younger people will be unable to afford the cost of housing.

  20.  The high cost of housing has an impact on families as parents need two incomes to pay for the cost of housing. As a result they are spending less time together as a family. Parents may also have to undertake longer commutes if housing they are able to afford is not available near their place of work. Housing Justice believes that housing must become more affordable if we are not going to create future social problems.

The relationship between house prices and housing supply

  21.  The relationship between house prices and housing supply was demonstrated in the Barker Review. Housing Justice agrees with the main findings of Barker and calls for an increase in house building to counter the effects of house price inflation caused by the lack of supply. If anything we believe that Barker was too conservative and we believe that the government should be increasing the amount of new social housing radically if it is to counter the effects of inflation and begin to find housing for the 100,000 households currently in temporary accommodation.

Other factors influencing the affordability of housing for sale including construction methods and fiscal measures

  22.  Housing Justice believes that the lack of housing supply is the major influence on the affordability of housing. The government must increase the supply especially of social housing to prevent homelessness. Evidence from our housing advice centres suggests that in particular family housing is in very short supply. New housing must meet the needs of families.

  23.  We believe that the government could do more to bring the large number of empty homes in England back into a habitable state. We welcome the empty dwelling orders contained in the 2004 Housing Act and hope they will have an impact on empty homes. We would like to see reform of the VAT treatment of home renovations so that the cost of bringing homes back into use is reduced. Housing Justice believes that by bringing empty homes back to the housing market the supply of homes will be increased allowing people in housing need to be re-housed.

The scale of the Government's plans to boost housing supply

  24.  Housing Justice believes that the plans that the government outlined in its housing strategy, whilst welcome, will have only a small impact on the problems of homelessness and bad housing in England. We have concerns that the plans will not produce the quantity of homes needed and will not provide the family homes that evidence from our housing advice centres suggests we need.

The relative importance of increasing the supply of private housing as opposed to subsidised housing

  25.  Housing Justice believes that it is important to increase the supply of housing in all sectors: privately owned, social housing and the private rented sector. We welcome the government's efforts to mix tenures in new housing developments as we believe that this will promote mixed communities. We would like to see a greater mixture of housing within tenures too with a variety of different types of housing likely to appeal to couples, families, older people etc so that sustainable communities can be built.

  26.  Housing Justice is concerned that current schemes to offer subsidised housing to particular groups of "key workers" favour these groups over people who are in genuine housing need. Housing Justice believes that all people make up a community and thus all are key workers. We would to see reforms to the existing key workers scheme so that the subsidy available does not go exclusively to the individual workers who are then able to profit from government spending when they sell their homes. We believe that subsidised housing should be built on land owned by the community so that the resource is able to be kept within the community. If this is not possible we would like to see restrictions put on the sale of key worker homes so that if they are resold for a profit within a certain time period, say five or 10 years, a percentage of the profit goes to the housing association that originally sold the house.

How the planning system should respond to the demand for housing for sale

  27.  Housing Justice believes that the planning system should promote mixed communities and ensure that as well as housing developers are required to build community facilities as sustainable communities are not built around housing estates but around the local school, churches, doctors and shopping facilities.

  28.  Housing Justice is concerned however that local authorities are often in a weak position when negotiating with developers who may be unwilling to negotiate with councils and are able to water down mixed community policies. We would welcome increased emphasis from the government on the importance of building the mixed developments.

The scale of housing development required to influence house prices and the impact of promoting such a programme on the natural and historical environment and infrastructure provision

  29.  As the Barker Review outlined the country needs to build another 140,000+ new homes a year to reduce the effects of house price inflation. We believe that this number of homes is the bare minimum required to begin to address the problems of bad housing and homelessness in England. We believe that the impact on the natural and historical environment and infrastructure provision can be reduced provided the government is prepared to commit adequate spending. We believe that investment in housing and infrastructure will bring benefits for the whole of society far beyond the initial expenditure.

  30.  Housing Justice believes that there is a role for the government in promoting the new housing developments, outlining the number of new houses required and stressing the minimal environmental impact of the proposed new development. Only with a strong voice from central government will local government be able to counter the objections of the small band of local people who do not want housing developments in their area. Housing Justice would be happy to work with the government to create a climate where the need for more housing is accepted and the benefits of creating sustainable communities are recognised

The regional disparities in the supply and demand for housing and how they might be tackled

  31.  Housing Justice believes that the regional disparities in supply and demand for housing are a symptom of the great economic divides within Britain. The government should make greater efforts to attract investment and regenerate areas away from London, the East and South East so that regional differences in prosperity are broken down and prosperous sustainable communities are created everywhere.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 20 March 2006