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Homelessness Part 2: (UN)Affordable Housing

Precisely one year ago I was asleep in a hospital ward and I was woken up by a lot of commotion as a man was wheeled in on a bed from A&E. He’d broken his hip in an indoor skiing accident and needed hip replacement surgery the following day. But, because of a lack of available beds, he ended up in a ward for people recovering from major surgery – directly opposite me.

This man made me smile immediately, because he was being wheeled in surrounded by various hospital staff and, while he was clearly in pain, he was telling them all about Jesus! At this point I pulled my eye mask down and tried to go back to sleep, while thinking to myself ‘this is going to be interesting!’

The next morning, we introduced ourselves. He was a joyful British-Greek-Cypriot and his presence was just what I needed, because the other four men in the ward weren’t great company. The man next to me had had his leg amputated (he had diabetes, he was very ill and he had no recollection of why he had lost his leg). Then there was an old Irishman (who wanted to go home, but was in no fit state to do so and he kept doing ‘dirty protests’) and on the two beds furthest from me were a racist old man (who was nasty to anyone that wasn’t white British – which was most of the medics) and another old man who was having serious trouble going to the toilet. All of this gave me a whole new level of appreciation for what nurses have to deal with.

So, it was great to meet a younger and ‘normal’ guy who wasn’t crazy. Or so I thought…!

Stuck in our beds we chatted and it turned out that this man was once a multi-millionaire (true story, I checked it out later!), but his opulent lifestyle had come crashing down, involving a public lawsuit. At this point he found faith, radically changed his outlook on life, and committed to helping people facing homelessness. So, calling upon his old contacts, he started a company to create truly affordable accommodation for those unable to afford it. Crazy story eh?!

For me, it was strange meeting this guy, because I’d been lying in that hospital bed contemplating life and wondering what my regrets would be if it all ended (which was a very real possibility at the time). One of my big regrets was not being able to share this story:

A few years ago I was responsible for PR within quite a large homelessness charity and my team and I shared a belief that the term ‘affordable housing’ had been hijacked and was being applied to housing that really wasn’t affordable at all. We planned to publish an article in the local newspaper about how the term was becoming a misnomer – misleading – and we planned to demonstrate how a lack of truly affordable housing was really underlying the rise in homelessness, sofa surfing and rough sleeping that was/is being experienced in much of the UK.

Our argument was simple: the median household income in the town where we worked was around £22,000 per year, most mortgage lenders would lend up to four times household income, and most lenders required an additional 10% deposit, at least. Therefore £22,000 x 4 + 10% =  £96,800.

So, where were the houses for around £100,000? Well, they did not exist. The closest thing in the area – aside from a canal boat or a park home – was a one-bed apartment which cost around £150,000. In conclusion, housing was well beyond the reach of most families and this was having knock-on effects that were destroying households and ultimately causing rough sleeping. Here are a couple of very quick scenarios based on true stories to explain this point:

  • A young family struggles to afford the rent, financial pressures cause the parents’ relationship to breakdown, they separate, mum goes into social housing with kids, dad turns to alcohol and eventually becomes a rough sleeper;
  • A family with teenage children struggle to afford mortgage repayments, financial pressures cause the parents’ relationship to breakdown, they separate, mum turns to a new partner who owns a home, he abuses one of the teenage children, the child finds comfort in drugs following her trauma and eventually becomes a rough sleeper.
  • …and there are many more scenarios that link housing affordability to rough sleeping and many other problems in society

At the time we felt disappointed that more homelessness charities were not speaking out about this issue and, if they were, it seemed to be the same old ‘we need to build more homes’ argument. But that argument was not working in our town because, the ‘affordable’ properties were frequently bought up by people who already owned at least one other property and then rented back to those who didn’t, at unaffordable levels.

So, because our charity was largely statutory-funded (i.e. most of our income was from the government, tax relief and local councils) and because we really valued our relationship with the local authority I went to meet with the Head of Housing at our local council to talk about this proposed newspaper article. As a result, I was asked by the council not to publish an article on affordable housing because “the council does not have the resources to cope with the public outcry that the article may create”.

Out of respect for my colleague at the council and out of fear that the charity may lose future funding opportunities, I honoured this request and the article was never published.

The truth is that many homelessness charities feel that their hands are tied because they have grown to rely upon large levels of statutory funding for their existence. Also, many homelessness charities need a good relationship with the local authorities in order to house people effectively. As a result, speaking out against statutory decisions and policies is like biting off the hand that feeds you. Then there are also those homelessness charities that are just too exhausted by the unending demands on their time to even contemplate lobbying for government policy changes.

Today, the message from the UK government and councils goes something like this: “We know that the UK’s housing market is broken; We know that homelessness is on the rise; We have one solution: We need to build more”.

Really, is that all we have? Build more and little else? And what will happen when those new properties eventually end up in the hands of people who already own properties? What will happen when those new properties are bought as investments and then left empty? At some point the tide will turn and the lack of truly affordable homes will cause a catastrophic divide between those who have homes and those who do not. Is ‘build more’ the only solution? Does anyone care to comment below?!

As a final anecdote, I received a message recently from an uncle saying the following:

I’ve just seen our old house is in the market for £550,000. That’s a bit more than the £23,000 we paid for it in 1981. Back then I was 25 and earning £5,000 per year and [your aunt] was 20 and earning £3,000 a year. Our combined income was £8,000, so the house was three times our income – it was affordable. To be in the same situation today a young couple would need to earn £183,000 per year. I’m not sure there are many people in their 20s earning that sort of money.

Then he said something about Margaret Thatcher that I won’t repeat…!

What sort of society are we creating for future generations? Do young people have any hope of a place to make their own? Will the divide between the ‘haves’ and ‘have nots’ get larger? And how can housing be made more affordable?

In my next post I hope to share a story from my brief experience working as an estate agent, followed by some potential housing market solutions. I’d love to hear from others on this important subject.

3 Comments

  1. Tim

    I have a jumble of thoughts….

    There is a huge discrepancy in house prices around the UK. In a town ten miles from me, close to the Scottish border, I have noticed a house in a reasonable area that is up for auction for a guide price of £35,000. There seem to be quite a few properties in Carlisle available for under £75k. Salaries in the area are somewhat lower than average but nevertheless, the relative cost of housing is low. What are the reasons for people ‘choosing’ not to move to such areas?

    Yes, the term ‘affordable housing’ is a misnomer. It shouldn’t be applied to an property that costs (say) more than 4x earnings, but if such a rule was applied now, no new housing could be termed affordable.

    As just one small component of any solution, why are we not constructing economical prefabs, perhaps subsidised to some extent by a levy on the increase in value of land when it is re-designated for housing.

    It is worth bearing in mind that there have been only two or three generations of people of which a significant proportion have been able to buy. Many got a mortgage, but soon they had to pay crippling interest rates on top of far higher income taxes.

    • blogger

      Thanks for the comment Tim – good thoughts. With the advent of the internet and remote working I wonder if you’ll start to see more people taking advantage of the good life in the North. Cleaner air away from London too!

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