By Daniel Hunter
Years of not building enough homes have led to rising rental and house prices, leaving millions of families struggling to pay for their home. The result is an unsustainable housing market which could see millions more families relying on Government support to pay their rent in the next few years.
Home Truths 2012, by the National Housing Federation, is an analysis and forecast of England’s housing market. It found that the future of our housing market is looking even bleaker, with both private rental and house prices forecast to rise sharply from 2015. Private rents are now increasing at a faster rate than house prices, and the knock-on cost to the taxpayer is rising as a result.
Despite Government efforts to tackle public debt, it is actually spending more on housing benefit. 417,830 more working people, an 86% increase since 2009, are now reliant on housing benefit to help them pay the rising rents on their home. And this is increasing as almost 10,000 more working people every month need housing benefit to help pay their rent.
"We now have millions of families struggling to keep on top of their rents, priced out of the housing market and nearly 10,000 more working families every month are now reliant on housing benefit to help pay their private rent," David Orr, chief executive of the National Housing Federation, said.
"These people are the ‘strivers’ the Government wants to help, yet their future is looking bleak. This cannot continue; we need action now to address the causes of rising housing costs, not just the symptoms. Only by addressing the chronic undersupply of new homes can we stem the financial pressure on families and Government."
Home Truths 2012, found that:
- The cost of privately renting a home has risen by 37% in the past five years, and is set to soar a further 35% over the next six years(1). In five years that means they will be almost a third, 29%, higher than they are now.
- Private rents are likely to be fairly stable through 2013 but could see steep increases from 2015 to 2018 of around 6% a year as interest rates rise and house prices increase.
- 417,830 more working people, an 86% increase since 2009, are now reliant on housing benefit to help them pay the rising rents on their home.
- The weakness of the economy will see modest falls in house prices into 2013, but demand conditions will support renewed house price growth of 5-6% a year across England from 2015 to 2017.
- In 2011 390,000 new families were formed, but only 111,250 new homes were built.
- House building starts will recover only gradually, from 100,000 homes this year to 140,000 in 2014, but increases will flatten out from around 2016/2017.
"The housing market is at the point of no return; with rising house prices, rising rents and millions of families really struggling to afford their home. It’s no surprise that one in 12 families in England is on the waiting list for social housing. Sadly the future is looking even bleaker," David Orr continued.
"Successive governments have failed to tackle the under-supply of housing and time is now running out. If we don’t urgently fix the housing market we will have a generation who are priced out of renting a home, let alone buying one.
"High housing costs put financial pressure on both families and the Government. When people can’t afford the homes they need, it stops them from moving for work, it prevents young couples starting families. Aspiration is stopped in its tracks."
The National Housing Federation is calling on the Government and the whole housing industry to take a long-term joined up approach to tackle the market difficulties. More immediately the Government must release publicly owned brownfield land to housing associations so they can build more houses. Using the Government’s own data we have identified sites equivalent to twice the size of Leicester8 that could be built on now.
Public support for building more homes is also crucial and we need to encourage their voices to be heard above those of the NIMBYs. The National Housing Federation’s new campaign Yes to Homes will encourage more people to speak up in support of more new homes.
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