Current UK Housing Model Broken

squat17:19 Wednesday 12th December 2012
Drive BBC Radio Cambridgeshire

CHRIS MANN: It’s getting harder and harder to get on the property ladder in Cambridgeshire. More number crunching from yesterday’s 2011 census data shows big drops in the proportion of mortgaged homes in Huntingdonshire, Peterborough and Cambridgeshire. Rachel Orr , the Campaigns Manager at the housing and homelesness charity Shelter joined me earlier for her reaction. (TAPE)
RACHEL ORR: I think what the census figures show is a historic shift in the way that young people are living their lives. And really this is a result of successive governments failing to build enough homes. And that means now that a lot of young couples, young families, just don’t have the same expectations in terms of being able to afford to own a home that their parents did.
CHRIS MANN: Certainly the figures here for Huntingdonshire, Peterborough and Cambridgeshire all show what you’re saying. I guess the big worry is that it’s going to take so long to get out of this mess, because it takes a long time to plan and build homes.
RACHEL ORR: Absolutely. And what this means for people, we had someone come to Shelter yesterday for some advice, a young woman, she’s thirty two, she’s planning on getting married next summer, and her and her boyfriend, after they’ve got married, will be moving back in with her Mum, because that’s the only way that they think that they’ll be able to save enough money in order to get a deposit for a home. Even then, they think that they’ll probably be doing that for three or four years. They both work. They have good jobs. It’s well paid. But they just simply cannot get onto the property ladder. And if they’re renting a home, the two of them, then the amount of money that they have to spend on their rent means they’ve hardly got any left over in order to save up for a deposit to buy somewhere.
CHRIS MANN: Do you think to an extent the mortgage has become too much of a Holy Grail for some people?
RACHEL ORR: I still think it’s the aspiration that so many British people have. I think it’s because of the stability and security that that represents. In Britain, our private rented sector is really still set up for people who are probably going to move around quite a lot. Most people who are renting privately will only get a one year contract. That’s fine if you’re a student, or maybe a young professional. But if you’re wanting to settle down, if you want to have a family, knowing that you might be asked to leave your home every year, because the landlord might want to sell, or because the rent increases so that you can’t afford it, is really unstable. So if we are to see that home ownership is going to continue to decline, we really have to do something to fix our private rented sector, so that people who are renting, it’s a much better long term option for them.
CHRIS MANN: So how do you do that?
RACHEL ORR: Well, I think that the first thing we need to do is be able to offer people longer term contracts. So for example, Shelter are proposing that a stable rental contract is introduced, where you could be offered up to a five year tenancy, and your rent increases would just rise in line with inflation. So when you move in, you know what you’re going to expect. You know that you could paint the walls, you can make that house a bit of a home. And so that you can settle down and put down roots, get involved in the local community. We need that kind of policy to be adopted by far more landlords, so that people think that if they are renting in the longer term, they can feel like they’ve got a home. And that’s why people so much aspire to home ownership, because it’s that feeling of the property that’s yours, that represents that kind of long term stability.
CHRIS MANN: The other solution of course in the long term is building more houses. The Prime Minister said just yesterday that yes, the Green Belt is going to have to be built on. Have you got a view on that?
RACHEL ORR: We absolutely have a view on the need to build more homes. It’s imperative that the Government takes a really long hard look at the UK’s housing industry, and comes forward with some really big bold solutions. That means releasing land to build on. We’ve got a lot of publicly owned land that could be built on, a lot of brownfield land. We need to think about how we finance housing, and come up with some more creative ways to do that. We need to think about the competition in the housing sector. I think we’re moving to a point where there are too many big developers, who have a bit of a monopoly. And actually we need to think about how we can encourage smaller companies, to provide jobs in construction, and start building the homes that we desperately need.