Insights into EU Countries: the UK Christine M E Whitehead LSE and CCHPR University of Cambridge

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Insights into EU Countries the UKChristine M E
WhiteheadLSE and CCHPR University of Cambridge

• No Space for Families Inclusion and Housing
• Expert Meeting
• Berlin, Friday 30th August 2013

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The Position of Families and Children in the UK

• Highest number of births in 2011-12 since 1972
  number of children roughly constant over the
  last forty years
• Nearly 25 of children are defined as living in
  relative poverty (60 of median income after
  housing costs) - this is around 50 up on 40
  years ago
• But housing is a major source of assistance to
  poorer family households in the rented sector
• Highly centralised political system with local
  authorities acting as agents rather than decision
  makers. Welfare UK based housing policy country
  based

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Housing and Families Five Big Current Issues

• Changing access to owner-occupation
• Government commitment to family housing
• Social housing priorities
• The growing role of private renting - especially
  in London
• Welfare support

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Table 1 Dwelling stock and tenure, England
(1961 2011)
Owner-occupied Owner-occupied Private rented Private rented Rented from housing association Rented from housing association Rented from local authority Rented from local authority Total
  000s 000s 000s 000s millions
1961 6,068 44 4,377 32     3,382 24 13.8
1971 8,334 52 3,201 20     4,530 28 16.1
1981 10,653 59 2,051 11 410 2 4,798 27 17.9
1991 13,397 68 1,767 9 608 3 3,899 20 19.7
2001 14,838 70 2,133 10 1,424 7 2,812 13 21.2
2007 15,070 68 3,182 14 1,951 9 1,987 9 22.2
2011 14,693 64 4,140 18 2,255 10 1,726 8 22.8
Source Table 104 Dwelling stock by tenure DCLG
Live Tables
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Table 2 Household characteristics by housing
tenure (2010/11)
Owner-occupation Social renting Private renting All
Couples with children 23 16 19 21
Couples without children 43 16 25 35
Lone parents 3 17 12 7
One-person households under age of 60 10 20 23 14
One person households 60 15 24 6 15
Economically active 54 33 69 59
Retired 32 31 8 28
Median income 31,500 14,800 23,200 25,400
Source English Housing Survey
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Families and Owner-occupation

• Owner-occupation is the aspiration of most
  households and particularly family households
• But largest proportions are couples without
  children mainly because people live a long
  while after children leave home
• Particularly in 2000s problems of affordability
  (prices/incomes first year payments required
  deposit) began to dominate and first time buyers
  found it increasingly difficult to enter
  owner-occupation
• The financial crisis reduced interest rates and
  made it difficult to obtain a mortgage the
  first helped existing owners and the second
  excluded many households from buying 1.5
  million lost purchasers

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Trend estimate England all households
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Trend estimate England households with
dependent child(ren)
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Government Policy with respect to Families

• Anyone who can find a rented home is eligible for
  Housing Benefit which, at the limit, pays 100 of
  the rent
• Concealed and sharing family households will
  normally have high priority in allocations and
  choice based lettings in social housing
• Homelessness legislation from 1977 requires local
  authorities to provide suitable accommodation for
  any family household accepted as homeless
  (including inadequately housed). In most parts
  of the country that means social housing,
  although growing use of Housing Options . In
  London likely to mean private renting and
  sometimes temporary accommodation increasingly
  outside the local authority area (although
  normally still within London).

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The Role of Social Housing

• Social housing has always provided lifetime
  security at sub market rent (less than 50 in
  much of London to 80 plus in lower demand
  areas)
• It has always concentrated on accommodating
  family households in need and increasingly on
  single parent households (although proportion of
  such households accommodated remains roughly
  constant)
• Local authority housing was mainly in estates
  larger and better quality than private but poor
  locations and post war high rise at edge of urban
  areas especially problematic
• Right to Buy generated mix and helped that
  generation of families but left large gap
  replacements , shared ownership and shared
  equity, very small
• Housing associations have built a wider range of
  properties in smaller and now mixed tenure
  estates often reasonably accessible. About 40
  over-allocated outside pressure areas.
• London a very different story higher proportion
  of family households in the sector but major
  problem of overcrowding with 100,000 plus
  households overcrowded in the social sector.
  Around 5 of those on waiting list need 4 bed
  homes and a further 16 need 3 bed

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Projection England households with dependent
child(ren)
Scenario assumes weak economic recovery social
rented stock constant excess SR demand all to
PR
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Table 3 Rents before and after housing benefit
by type of landlord (2010/11) per week
    of tenants receiving housing benefit   Rent before deduction of housing benefit Rent before deduction of housing benefit Rent after deduction of housing benefit Rent after deduction of housing benefit Weekly housing benefit Weekly housing benefit
    of tenants receiving housing benefit   Mean Median Mean Median Mean Median
Local authority 65 74 69 7 0 67 67
Housing association 60 84 78 8 0 75 73
Private landlord 25 160 137 41 16 107 94
Source DCLG English Housing Survey Table No.
FA3242 FA3245
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(No Transcript)
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Trend estimate London households with dependent
child(ren)
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Biggest Current Issues for Families

• Continued problems of access to mortgage finance
  although government Help to Buy schemes
  beginning to help and funding is easing.
• Still major issues of affordability, especially
  in London and South East
• Changing conditions in social rented sector
  rents on new properties and some new lettings up
  to 80 of market security may be only 5 years
  restrictions on HB for spare rooms
• If unable to access either major tenure then
  forced into private renting where further
  constraints on HB and range of properties/quality
  of management less suitable
• Welfare reform hits some large families
  particularly hard
• Particular issues in high demand arras
  particularly London but movement out of London
  hit by crisis.

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Increasing importance of private renting

• Traditionally seen as suitable mainly for
  younger, more mobile households
• Increasing role as social housing with HB but
  also latterly for squeezed middle
• Tenure form Assured Shorthold Tenancy (AST) 6
  12 months at market rent - then renegotiation
  (average length of tenancy 2 3 years but many
  very short)
• Changes in HB and Universal Credit forcing
  households out of higher rent areas
• Use of private renting by local authorities to
  accommodate homeless households in high pressure
  areas
• Issues I rural areas and other locations where
  limited private rented supply

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Projection London households with dependent
child(ren)
Scenario assumes weak economic recovery social
rented stock constant excess SR demand all to
PR
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Welfare changes (UK)

• Increasing constraints on HB for younger non
  family households
• Maximum rent covered by Local Housing Allowance
  (HB in prs) is local reference rent, now reduced
  from 50 of market to 30 with absolute maxima
  which rule out highest priced areas
• The Welfare Cap, at roughly median family earned
  income of 25,000pa. Affects between 45
  65,000 households and maybe 180,000 children. Way
  out 16 hours work per week (24 if 2 adults)
• Heavily concentrated among large workless
  families in London - and among particular
  ethnic and religious groups (but meets
  discrimination laws)
• Changes being rolled out slowly - towards
  Universal Credit in 2015 politically popular.
• Remember that 25 of children live in poverty
  after benefits and housing costs poverty of our
  general welfare system rather than our housing

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Looking to the Future

• More family households than in much of the rest
  of Europe partly as a result of migration
  patterns and age of migrants (they dont have
  more children, just come at the right time to
  have children)
• The fundamentals are the worsening distribution
  of income and increasingly fragmented family
  structures
• Family households in owner-occupation and social
  housing generally have good housing conditions
  and reasonable affordability - but cannot access
  all areas
• In social housing some problems of exclusion and
  access - poor estates in poor areas more
  generally concentrations of poverty
• Those in private rented sector facing increasing
  difficulties in high pressure areas, notably
  London and are being forced out of high rent
  areas
• Tougher welfare regime will work incentives
  work?

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Conclusions

• Housing policy has favoured families and has been
  seen as important in offsetting low levels of
  social security
• But political consensus that expenditure must be
  contained and this is hurting family households
  especially in the private rented sector - which
  is likely to house many more such households into
  the next decade
• The vast majority of families are well housed but
  a proportion heavily excluded by both the market
  and social provision new entrants at a major
  disadvantage
• But THE fundamental is simply low incomes and a
  worsening distribution of income and wealth.