House prices continue to outpace earnings

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The Office for National Statistics have just published the latest data for the ratio between house prices and earnings for 2017. As you can see from the tables below both the lower quartile and median property prices in Swindon have outpaced earnings by more than four times from 2010 to 2017.

The lower quartile property price at 7.87 lower quartile earnings in 2017 is even higher than the median one. If you aren’t a home owner the chances of you becoming one without assistance from the bank of mum and dad (which many people cannot call on) are increasingly vanishing, unless you are one of the higher earners.

Given the shortage of council housing this means that more and more people are forced to rent in the private sector where rents are also increasing way above earnings (see Swindon the real picture Part 2, Crisis of housing affordability).

Recently we have heard that Swindon is a housing ‘hot spot’ with a high level of activity. Increasing house prices, however, are no use to local people who do not earn enough to afford a mortgage. Increasing ratios are just another sign that the supposed ‘success’ of the town is leaving more and more people behind, struggling to get by month by month.

Lower Quartile

LQ earnings

LQ house price

LQ ratio

2010

19,350

£120,000

6.20

2017

20,890

£164,500

7.87

% increase

7.95%

37.1%

Median

Median earnings

Median

house price

Median ratio

2010

26,667

155,000

5.81

2017

28,847

211,500

7.33

% increase

8.17%

36.45%

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Labour’s Housing Green Paper – Part 1

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We need 100,000 council homes a year not “affordable homes”

“We have a housing crisis in this country that can only be solved by local government building more. Labour’s 2017 manifesto promised to build 100,000 council homes to ‘rent or buy’. It called for a ‘pause’ to the right to buy, and to lift the borrowing cap so councils could borrow to build more.

We need to be bolder. Don’t suspend the right to buy, end it. Don’t promise to lift the borrowing cap, cancel the debt.”

Doina Cornell , Leader Stroud Council

The Labour Party has published a Green Paper, Housing for the Many. This is part one of an analysis of the proposals. The document marks some progress from the Party’s general election Manifesto. Labour’s “first housing priority” of helping young people onto the proverbial housing ladder – young people it should be said, earning up to £100,000 a year – has disappeared. Yet there is still a big gap between this document and Jeremy Corbyn’s original aspiration of Labour building 100,000 council homes a year. The policy in the ‘mini-housing manifesto’ (Labour’s New Deal for Housing) was more candid than the housing section in the general election Manifesto. It was firmly rooted in New Labour’s housing philosophy with its worship of home ownership. For that reason it was subject to much sharp criticism. (Read on below or download a PDF here greenpapercomment )
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Council homes sold under Right To Buy are not being replaced

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Swindon Tenants Campaign Group media release

April 11th 2018

Council homes sold under Right To Buy are not being replaced

In March of last year, Gavin Barwell, then the Conservative Housing Minister said that RTB only has any “political justification” if homes sold are replaced by new homes built. However, he did nothing to remedy the fact that they are not being replaced. Now the housing industry publication Inside Housing has examined government statistics in relation to RTB sales and replacement homes. They found that only around a quarter of homes sold under RTB are being replaced. The magazine has a list of RTB sales and replacements in local authority areas.

In the case of Swindon the figures show that 333 homes have been sold since 2010 but only 72 replacements have been built or bought using RTB receipts. (The council is buying ex-council homes which were sold off on the cheap but paying market prices.) Read on below or download a PDF here rtbreplacements More

Unaffordable rent

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This is a letter to the Swindon Advertiser

The number of council homes available in Swindon today is around 200 less than in 2011. This is bad enough but now the ruling administration is proposing a policy which will increase the number of unaffordable homes to rent. As part of their ‘regeneration’ of Queen’s Drive they are proposing to cut the number of council homes which charge a council rent (or ‘social rent’ as it is called in the jargon) and charge instead so-called ‘affordable rent’. This can be up to 80% of the market rent.

This would mean that some council tenants would have to pay up to twice the rent that other council tenants pay in a similar property with the same number of bedrooms. Probably the only people who will be able to afford such rents are those who qualify for full housing benefit. However, even they could come unstuck when they have to go over onto Universal Credit. When they do, they will be thrown into arrears as a result of their housing benefit being stopped, whilst their UC claim is being processed. We already know that 75% of tenants on UC have rent arrears compared to 25% of tenants overall. Arrears for ‘affordable rent’ will be considerably higher than ‘social rent’. More

Leicester Labour Housing Conference

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I was invited to speak at a Labour housing conference in Leicester last weekend. I began my contribution by asking the seventy-odd people present to raise their hands if they believed that Labour’s first housing priority should be a large scale council house building programme. A forest of hands were raised. I could only see one person whose hand remained down. There might possibly have been a couple more who I couldn’t see. However, overwhelmingly this collection of Labour Party members wants a Labour government to carry out a large scale council housing programme.

Unfortunately I had to tell them that Labour’s Mini-Housing Manifesto, Labour’s New Deal for Housing, said that Labour’s first housing priority was to help young people on “low to medium incomes” onto the housing ladder. According to the document income of £100,000 a year is considered a medium income! This appeared to come as a surprise to most people, most of whom were not aware that there was a Mini-Housing Manifesto. More

Queens Drive regeneration: Swindon Council’s unaffordable housing strategy

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Swindon’s housing crisis has been described as a crisis of affordability. Much of the town’s housing in unaffordable for a large proportion of the population. At a time when the value of earnings has declined many people struggle to pay their rent month to month. (See Swindon – the real picture, Part One 1) The recent Centre for Cities report highlighted an increase in the ratio between house prices and earnings. It said that the average house price in Swindon is more than eight times average earnings making mortgages impossible for a large number of people. We have recently shown that rents in the private sector continue to rise way above earnings (see Crisis of Housing Affordability 2).

Council rents are much lower than rents in the private sector. Even the cheapest, lower quartile private rents, are, depending on the number of bedrooms, from 34% to 98% higher than council rents (See Table 4) and median rents are higher still. Unfortunately as the town increases in size the number of council homes has declined. There are more than 200 less than in 2011, so very few people have a chance of getting a council tenancy. Read on below or download a PDF here  unaffordablehousing More

Housing crisis – planning is not the key problem

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The Conservative government is now threatening supposedly ‘nimby’ local authorities with central government action if they don’t “build enough homes in their area”. Failure to meet the targets will, apparently, mean that councils will lose control of the right to decide where new houses are placed in their area. This is patently absurd since councils cannot control the number of homes built in their area, especially when they are not building any themselves. The whip hand in relation to development lies with the developers and builders who control the pace of building when they have planning permission. There has been ample experience in Swindon of central government overturning rejection of planning applications on the grounds that the council is not achieving their house building target. Yet it is the developers/builders who are controlling the pace of construction essentially to maximise their profits. Read on below or download a PDF here plannignetc More

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