Housing chief warns of time bomb

By David Orr
Chief Executive, National Housing Federation

Forty years ago Ken Loach's drama Cathy Come Home vividly portrayed the misery of homelessness to a shocked nation.

Forty years after the seminal film, a new housing challenge prevails

People took action because of what they saw.

Campaigns were started and many not-for-profit housing associations were formed to provide affordable homes for people in housing need and low-income families.

Today, with 1.5 million people on housing waiting lists and many millions more unable to afford a home of their own, England is in the grip of a serious housing crisis.

It's time to take action again: we need to build 80,000 affordable homes a year to offer everyone the chance to live in a decent home.

Urgent need

Poor housing affects people's health, employment opportunities, children's educational attainment and places a strain on family relations.

In essence the problem is relatively simple: the demand for housing has risen due to population and household increases but supply has failed to keep pace, leading to a shortage of homes and price rises.

Respected economist Kate Barker notes that the greatest shortage is in affordable housing for people on low incomes.

This country needs to address this shortage as a matter of urgency.

The government needs to boost funding for housing associations and others to build the affordable homes this country so badly needs.

The government's forthcoming Comprehensive Spending Review in 2007 will decide how public money is spent from 2008 to 2011.

This is an opportunity to significantly boost investment in new affordable homes.

The National Housing Federation and housing campaigners are calling for £11.6bn to build 210,000 new homes by 2011.

Housing associations, through their unique not-for-profit business model, can offer an additional £8.1bn to meet the total cost of this building programme.

Out of reach

The need to act is clear.

The average house price is now eight times the average income in England and new price rises make almost daily headlines.

We must act now. Otherwise we have a housing time bomb on our hands

Whilst this may be good news if you are fortunate enough to already own your own home, it makes depressing reading if you are struggling to find somewhere to live.

New housing market forecasts commissioned from Oxford Economic Forecasting by the National Housing Federation show house prices rising faster than incomes throughout the next five years.

By 2011, the average house price is forecast to rise to nearly £300,000, completely out of the range of low and moderate earners.

Time bomb

Key public sector workers and younger professionals are finding they cannot afford higher prices, so whilst housing need is most acute for those on the lowest incomes, the effects are being increasingly felt throughout society.

Estates like Isokon in London offer key workers a stake in their home

At the same time, buy-to-let investors are pushing up rents in the private rented sector, leaving private tenants with little chance of saving for their own place or in the worst cases forcing them on to council waiting lists, creating additional on an already overstretched supply of affordable homes.

Housing associations are doing all they can to help and currently provide five million people with homes to rent at below market rates as well as part-buy, part-rent options to assist people in getting that all-important first step on the housing ladder.

But they want to do more. Housing associations want to build more homes to meet the needs of different groups within society and are working to create safe, prosperous communities with a place for everyone.

We must act now. Otherwise we have a housing time bomb on our hands.