Comment: We can’t help the squeezed middle unless we talk about housing
People want to know why they can't raise their children in the kind of place they were raised.
By Nicola Hughes
In the run up to the chancellors next budget, politicians are fighting to position themselves on the side of 'the squeezed middle'. So far debates have centred on reducing fuel costs and taking low earners out of income tax, but all parties will be missing a trick if they neglect housing policy.
As recent figures from the English Housing Survey show, homeownership is continuing to decline and doesn't look likely to stop in the next few years. Policy makers should be looking hard at how other parts of the housing system can help meet the needs and aspirations of families squeezed by high living costs and stagnant incomes. More and more people are finding their housing is unaffordable or that their housing choices are constrained, with negative impacts on their lives.
Recent reports have highlighted a whole generation of young people who feel 'stuck' in private rented accommodation. Unable to afford to save a deposit to buy a home and finding social housing out of reach, the private rented sector is providing increasing numbers of these households a place to live, yet offering them little of the long term stability so important for those planning to have a family.
The temptation for politicians trying to meet the needs of this group is to announce a new first-time-buyer scheme. A hand onto the ladder, through arrangements with lenders or shared ownership schemes, can make a good press release and raise the expectations of would-be buyers. But such schemes are often a smokescreen.
Shelter' analysis has revealed there are 900,000 households for whom even the cheapest shared ownership schemes are out of reach, and there's increasing anecdotal evidence that even those who do squeeze on them are then stuck with a share in a house that won't meet their future needs. What's more, ad hoc schemes don't address any of the underlying problems – the cost of housing or the reasons that people feel unable to settle down in the private rented sector, such as lack of security or the inability to make improvements to their home.
Another group being constrained by housing are the families squeezed by spiralling housing costs. Low-middle earners who bought on high Loan-to-Value loans often now find themselves facing negative equity, unable to move, or struggling to keep up with monthly mortgage payments. Private renters face spiralling rent costs and low-income working households will be hit by benefit cuts. The constant struggle to cut back and scrimp and save has a negative effect. Families are held back by their housing – stuck in an rented flat too small for their needs because they can't afford something bigger, unable to move for work because it will be too expensive, putting off starting a family because they can't afford a suitable home.
Housing is central to the squeeze on low to middle income households, but their problems cannot be solved until wider dysfunction in the housing system is addressed. This means stabilising the market, improving the rented sector, making benefits work and developing fair social housing tenancy strategies. There is also a bigger question about how to ensure that families who work hard can access a reasonable and stable place to raise their kids. This isn't the whinge of a spoilt youth fixated on the best rather than what's okay. It's a generation understandably asking why, with progress in so many other fields, they can't raise their children in the kind of place they were raised. The solution isn't yet neatly packaged, but it's within grasp for politicians bold enough to tackle this question. Politically, the rewards could be great.
Nicola Hughes is a senior policy officer at Shelter, where she focuses on housing market issues including repossessions and empty homes.
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