The housing crisis is pricing workers out of ever more of Britain

Renting is now more expensive than owning with a mortgage in 44 per cent of all local authorities, but for many families it is the only option.

The fact that many ordinary working families are priced out of central London boroughs such as Westminster, Kensington and Chelsea and Islington will surprise no one. But a new report by the Resolution Foundation shows that there are now affordability black spots across all parts of the country where low and middle income families would have to spend more than a third of their income on housing to find a decent place to rent or buy. Working families are being priced out.

A couple with one child on £22,000, for example, has to spend more than 35 per cent of its net income – a commonly accepted ceiling for affordability - to meet the ongoing costs of a mortgage in nearly two fifths of all local authorities. If the same family wanted to rent privately, they would find that renting was unaffordable in a third of all local authorities. Housing costs are becoming a struggle even for median income families on £28,000.  In one in 16 local authorities, rent would eat up more than 35 per cent of their income. And in London, there is no local authority where a family on £22,000 can rent even a modest a two-bedroom property and pay less than 35 per cent of their income in rent.

Of course, there are low income families renting in all of these 'unaffordable' parts of the country but they do so at a sacrifice. They are either paying a vast amount of their income towards housing costs and forgoing other essentials, living in cheap, substandard accommodation or in overcrowded conditions. or maybe living miles from work, where housing costs are lower. With incomes for ordinary working families not expected to be any higher in 2020 than they were in 1997-98, the affordability problems of Britain’s ordinary working families look set to persist.

The report highlights the growing affordability challenge for those in private rent, as falling wages fail to match even modest rent rises in some part of the country. Renting is now more expensive than owning with a mortgage in 44 per cent of all local authorities, many of which are in the north. In the north east, for example, renting is more expensive than owning with a mortgage in all local authorities in the region and in the north west, in more than eight out of ten local authorities. But for many low and middle income families, renting privately is the only option. Social housing, while affordable in all parts of the country, is in short supply and targeted at the most vulnerable and even a 10 per cent buyer’s deposit can be difficult to save for on a modest income. Of the 1.3 million low to middle income households who now face unaffordable housing costs, close to half are private renters.

The focus of the government’s response to this affordability crisis has been the Help to Buy scheme which provides government support to allow those who cannot afford to buy with a conventional mortgage access to a high-loan-to-value mortgage or an equity loan. This will no doubt help some people to get on the housing ladder but it will do little to meet the needs of the low to middle income families who currently face the biggest affordability problems. It has become almost trite to say that the solution to Britain’s housing problem is that we need to build more homes. But without more supply, schemes like Help to Buy simply risk inflating house prices as more people come onto the market in search of a home. Estimates suggest we need more than double the number of homes that we are currently building each year. But improving affordability has to be more than a simple numbers game. We need to build more homes in the right locations and of the right type- and at the right price - not just more homes for sale or prime central London rental developments - to meet the needs of households who currently have few options. 

"Schemes like Help to Buy simply risk inflating house prices as more people come onto the market". Photograph: Getty Images.

Vidhya Alakeson is deputy chief executive of the Resolution Foundation

Photo: Getty
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The new French revolution: how En Marche! disrupted politics

The rise of Emmanuel Macron's party has shattered the accepted wisdom.

Alexandre Holroyd bears many similarities to his new boss, Emmanuel Macron. Like the French president, a former banker, Holroyd started his career in the private sector, at the management consultancy firm FTI. At 39, Macron is the youngest ever French president; Holroyd is nine years younger. Both are strongly pro-European and confident in their common mission.

“The Assemblée Nationale is going to profoundly change,” Holroyd told me, sipping fizzy water in a café near St Paul’s Cathedral in London on 16 June. Two days later, in the second round of the French legislative election, he was elected France’s MP for northern Europe – one of the 11 constituencies for French expats around the world – representing Macron’s party, En Marche! (“Forward!”), which swept to a resounding victory.

“People said, ‘These newbies from En Marche! won’t know what to do,’” he told me. “But they will reflect French society: diverse, equal, with multidisciplinary experiences.”

Macron’s election in May capped a remarkable 12 months for the former economy minister, who left the Parti Socialiste (PS) government to run as an independent candidate. But the real power – of the kind that will allow him to implement the liberal reforms he has promised France – arrived only with the legislative election victory.

En Marche! won 350 of the 577 parliamentary seats, a majority that should enable the president to pass laws in the house easily. And the party did so by selecting younger, more socially diverse candidates than is usual in French politics. As with Holroyd, most of the candidates for En Marche! were running for office for the first time. When the National Assembly reopens, three-quarters of the faces will be new.

The renewal of the political class was one of Macron’s main campaign pledges. “There was this will to stop the two main parties’ [the PS’s and the Républicains’] sectarian obstructionism,” Holroyd said. “The French people are fed up with it.”

Much like a Silicon Valley start-up disrupting a sector of the economy – Uber with taxis, for instance – En Marche! sought to disrupt French politics. Macron launched it in April 2016 as a “political club” while still serving in François Hollande’s government. Three months later, more than 3,000 people attended its first event in Paris. The movement welcomed people of all political parties, allowing them to sign up for free online.

Today En Marche! has more than 240,000 supporters. The party’s main source of funding was individual donations and during the presidential campaign, it raised €6.5m. (Macron also took out an €8m personal loan.)

The rise of Macron and En Marche! has shattered the accepted wisdom of French politics: 39 is too young for a president; one cannot be “neither left nor right”; a career in the private sector does not lead to politics; no one can run for the presidency without the support of a pre-existing party.

Yann L’Hénoret, the director of the documentary Emmanuel Macron: Behind the Rise (available on Netflix), described En Marche! as a “very young” team in which “everyone could give their own view” before Macron had the final say. “Young people are said not to be politically engaged. I saw the inverse, every day, all the time,” L’Hénoret told me.

En Marche! members set up more than 4,000 local committees across France and beyond. Anyone interested in Macron’s project could create one and invite family members, friends and neighbours to take part. “Engage in a march, a conversation, a dinner,” the movement’s website suggested.

The groups then started “the Great March”, a canvassing initiative. “It was like an audit of the society,” said Holroyd. A dual citizen of France and Britain who grew up in west London, he became one of the early marcheurs in July 2016, when he quit his consulting job to set up the London committee. He had never been a member of any party before but Brexit acted as a trigger. “I saw my father’s country tearing itself off from Europe and realised I would regret it if I didn’t contribute to Macron’s project, whose European values I profoundly share.”

A graduate of London’s Lycée Français and Kings College, Holroyd could easily engage with his French expat peers – something that helped him win 70 per cent of the vote in the second round. “The only other party to go and talk to the people was the Front National,” Holroyd said. “The particularity of En Marche! is that many members came from the private sector. It’s exceptional in politics that people in the party have professional experiences. It spoke to many people.”

As En Marche! crowdsourced its candidates, it also ensured that its policies resonated with their locals. During the London “march”, 95 per cent of the participants told the committee that they were expats in the UK because of the economic opportunities here. Macron wants France to be able to entice professionals, too. Financially and socially, his goal can be summed up as: “Make France attractive again.”

Achieving a parliamentary majority has boosted Macron’s hopes of implementing major changes. Reforms may start as soon as this summer, with a liberal reorganisation of France’s rigid labour laws, which currently offer strong protection for workers. “France must invest in the industries of the future,” Holroyd said, quoting his president by the word. “Renewable energy, denuclearisation, ecological transition . . . We must become champions in these fields.”

Despite the scale of the victory, Macron’s team will have noted that the turnout was at a historic low on 18 June – at 42 per cent – suggesting widespread voter apathy. And despite its much-praised social diversity, En Marche! has only one working-class MP for every five middle-class ones. “We are conscious that we’ll be in a difficult situation if, by the end of the mandate, things have not changed for the people who have been left behind for years,” Holroyd said. “Those in outer suburbs, in post-industrial and rural lands.”

If they are to succeed, Macron and his MPs will have to find a way to win them over.

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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