A report published last week by the Resolution Foundation, Hanging on: The stresses and strains of Britain’s ‘just managing’ families found that “just managing” families were more than twice as likely to rent privately rather than own their own home, exactly the opposite of two decades ago.
Regarding housing costs, the report said: “The combination of rising housing costs across all tenures and the increasing concentration of low to middle income (LMI) households in the relatively more expensive private rented sector mean that the proportion of income spent on housing within the group has increased sharply over the same period – equivalent to an extra 14p on the basic rate of income tax for an LMI couple with children. Roughly 25p of every £1 of income within the group is now diverted into accommodation costs on average, with some households facing much higher ratios. Taking these housing costs into account, we found that typical incomes in the group are at a 13 year low.”
My reason for quoting this is to contrast this indicator of inequality with a statement made yesterday (Sunday 2nd October) by the Housing Minister, Gavin Barwell MP. Speaking at the Conservative Party Conference he said he wanted to see more homes “of every single kind” built but when he listed the kinds of homes he wanted built he did not mention council housing.
In fact he said that a 500,000 increase in council houses as part of an increase in 1 million homes to be built would increase inequality, and rather than solving the housing crisis, it would widen the divide in society.
He said: “If you’re going to build at the current rate … and half the people are going to go in council homes and half of them are going to own, the divide in society is only going to get wider and wider.”
The divide, Minister, is already huge and getting wider, and the dysfunctional housing market is at its core. I wrote on Friday about the reason why the number of homeless households has gone up by 10% over the last year. Council housing is needed to reverse that trend.
And I wrote yesterday about the economic case for building lots of council houses, and referred to research that pointed to savings in the hundreds of billions over 50 years if the government was to invest in council house building.
The Resolution Foundation is clear that the high cost of housing, and rent in the private rented sector in particular, was a significant factor in the “just managing” households.
It must be clear to the Minister that the “just managing” households will probably now never own their own home – it is just too expensive – and the private rented sector, too, is testing even those who are “just managing”.
Any ideological opposition to council housing is not helpful. The Minister is right to want housing “of every single kind” but that must include council housing.
(Footnote: Previously I have been very positive about Gavin Barwell – My affection for the new Housing Minister is almost absolute! – but on his refusal to see the importance of council housing I believe he is just plain wrong).