Debate over the housing crisis tends to focus on rising house prices, and (more recently) the impact of higher rents on people’s ability to save for deposits. In both cases the implication is that politicians should be doing more to remove the obstacles to ownership, primarily by building more homes. But, given scarce resources, what would the priorities be if you started with need, rather than aspiration? This is especially important if – like JRF – you are interested in the relationship between housing and poverty levels in the United Kingom. There are two reasons you might be.
First, the UK has managed to largely break the link between poverty and bad housing conditions. A new report from Heriot-Watt University for JRF found, for instance, that between 1991 and 2008 more than 85 per cent of people who experienced chronic poverty did not experience severe housing deprivation. Maintaining this legacy will require work amid falling support for welfare spending. Yet the need to provide support to people on low incomes clearly still exists.
Using detailed historical data the Heriot-Watt research found that tenants in social rented housing experienced five times as much persistent, long-term poverty than the average. Their risk arises from wider life circumstances, well documented in other research as part of JRF’s anti-poverty strategy development work. Yet social housing can act as a buffer against these low incomes, providing the basic security people need to start improving their circumstances, while in the case of those who are not able to, guarding against destitution.
But as well as lessening its worst effects, housing can also push people into poverty. Indeed, assuming that costs continue to outstrip wages there is every risk that the poverty rate will increase. For example, we calculate that if social rents rose to 65 per cent of market rents the overall poverty rate would rise by 2.5 percentage points. This represents an extra 1.3 million people by 2040 and even this scenario depends on the real costs of housing benefit (or equivalent) rising by 125 per cent, which is by no means guaranteed.
To prevent the link between poverty and housing deprivation from regaining strength we will need to build many homes than currently, but must also ensure that within that total there is a genuinely affordable housing offer for people who live on relatively low incomes. The recent Lyons review for the Labour party covered some of this ground with creative ideas for increasing the supply of genuinely affordable homes, particularly from councils. As now, the future looks set to be driven by cross-subsidy in which councils and housing associations fund social tenancies by developing homes for sale and rent at market and intermediate rates, bolstered by some grant from the taxpayer.
The job will be to ensure that people on low incomes genuinely have options in this more complex environment. This will only happen if housing organisations keep them at the centre of their social mission, a process that will be helped along if politicians are unambiguous in their support for the principle of social housing. Our research shows that there are strong economic as well as moral arguments for doing so.
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Frank Soodeen is head of public affairs at Joseph Rowntree Foundation. He tweets @FrankSoodeen
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