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‘Home Truths’ about the housing crisis

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‘Home Truths’ about the housing crisis

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Published by Max Salsbury for 24dash.com in Housing and also in Development, Featured

‘Home Truths’ about the housing crisis ‘Home Truths’ about the housing crisis

Responding to the NHF's (National Housing Federation) 'Home Truths' report, Mike Pritty (pictured), chair of the Matrix Housing Partnership, writes that it is up to housing associations to rise to the challenge of the housing crisis.

The NHF launched its ‘Home Truths’ report, which underscores the seriousness of the housing crisis we now face, in Parliament on 21st November. The report concludes that, although years of not building enough homes has left a growing gap between the supply and demand of affordable housing, the last two years have seen a major drop in housing construction which is having grave effects both for those in housing need and the wider economy.

Lack of supply has fed through into growing waiting lists, which have grown by 10% since the international financial crisis hit, and a 26% increase in homelessness. Housing associations are on the front line in dealing with the fallout from long-term under-supply with many seeing more than half of their lettings now going to homeless households.

The housing crisis is also holding back wider economic recovery. The construction industry has been in deeper recession than other sectors of the economy when housing investment could have boosted economic growth, created new employment and supported the home grown construction supply chain.

Instead of this economically and socially valuable investment, we have witnessed, despite government efforts to tackle public debt, public spending increasing on housing benefit subsidising massively increasing rents in the private rented sector. Some 418,000 more working people, an 86% increase since 2009, are now reliant on housing benefit to help them pay the rising rents on their homes.

Perhaps the most worrying aspect of the NHF’s report is how a lack of affordable supply is feeding through into higher housing costs in the home ownership and private rented sectors setting the bar ever higher for entry to first time buyers and new renters.

The NHF predicts further steep increases in house prices and private sector rents after 2013 of around 6% per year. Already, the income needed to support a 75% mortgage on the average home is almost £51,000 per year. The average income to house price ratio across England is 11.1 and in London 15.6. And the NHF projections show that private rents will be 27% higher in 2017 than today.

So what can be done? The NHF recommends that more land needs to be released to housing associations for new house building within a more supportive and long-term national housing strategy that enables associations to unleash their entrepreneurial skills in deploying their assets. If housing associations don’t rise to this challenge it is difficult to see who will.

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