We need to be braver and more radical in finding solutions. Photo: Getty
Show Hide image

Homelessness will not be solved by building private homes – we need a radical solution

After a decade advocating for homeless people at the helm of Crisis, Leslie Morphy has a message for government.

There’s lots of talk about young professionals struggling to buy their first home, especially in London, but for me there is a much harsher reality. There are thousands of homeless people whose lives are far beyond the bottom of the property ladder. They are stuck in hostels and bed and breakfast accommodation, hidden from view in over-crowded homes, garden sheds and worse of all, on our city streets, sleeping in woods and parkland. The solution for these people is not going to be through tinkering with the mortgage market or giving incentives for first time buyers.

As I step down from almost a decade immersed in advocating for single homeless people at the helm of Crisis, a message to government both locally and nationally is that we need to be braver and more radical in finding solutions to a housing crisis which underpins homelessness.

There is the very obvious issue that people simply cannot afford accommodation suitable for their circumstances. Affordable must mean affordable, including in London. For some this can be achieved through a reinforced commitment to social housing and not a sleep walk where social housing to rent becomes a distant memory in many parts of the country. For others the housing may not be social but it needs to have some of the characteristics of social housing and in particular some greater security of tenure than currently exists.

For the last year local authorities have been able to fulfil their duty to house people by housing them in the private rented sector. Those so housed should be able to expect at least some semblance of equality of tenure arrangements. As someone who spent their early years in a council house it is clear to me that there are good reasons why rents are low in social housing. They are low so that people’s income covers more than just the bare bones for survival.

Longer tenancies are something we have long called for. Recent research for Crisis highlights the damage done to tenants on short contracts who face being thrown out when they request repairs or their landlord wants to put the rent up. Abolition of arbitrary and often hidden letting agents’ fees will also do much to protect poorer tenants, for whom such fees can cause devastation and in some cases even homelessness.

Lower rents and greater security of tenure enable people to progress, contribute to their local communities and provide their children with opportunities. Affordable must mean more than subsistence living.

Housing Associations have been and still are important players here. Some are making very significant surpluses and they need to invest this into truly affordable homes rather than in more market rent products. The changes to the way they make their money need not prevent them from remaining our conscience.

But they can only work with what they are given. It is critical that local authorities fight for affordable housing on new developments. It is clear that councils take money from developers in lieu of affordable housing. This is a consequence both of their own budget constraints, that is the money props up their own budgets. But it is also a consequence of failing to provide for those in need, who may require more support and taking an often easier route which avoids discontent within communities.

Homelessness will not be solved by building private homes for sale or for rent. Good quality, supported accommodation needs to be delivered as part of new developments. It needs to be a fundamental part of the planning process and not an afterthought when all the main planning decisions have been made.  

When considering development councils must consider the role of temporary and supported housing. We need decent temporary accommodation for single homeless people.

This must be adequately funded, because at the moment single people who come to their council as homeless rarely get real support. They must be eligible for public funds, prove that they are ‘unintentionally homeless’ and even then will only get proper help if they are vulnerable as a result of old age, mental illness or physical disability or “other special reason”.

If they don’t jump through all these hoops, the inhumane but strictly ‘legal’ position is that a housing officer can simply send someone away with a letter advising them of where their local charity run hostels or day centres might be. That is when people end up on the streets. 

Crisis works with some great landlords who are keen to help people get back on their feet and enjoy full support from local projects who work hard to make tenancies work for both parties. But often our clients are left with little option but to accept rented places in awful condition, just to get a roof over their heads. There is probably enough legislation to drum out those landlords who are providing entirely inadequate housing already. But it needs to be enforced and local authorities need to do the enforcing. Where we do need legislation is so that people cannot simply be turned away with no advice or with an address of a local hostel or a local church where people can sleep at night.

We cannot simply put the onus on local authorities to act differently. It is the role of central government to ensure that they are properly resourced and that the legislative framework addresses the fundamental issues.

It is to their great shame that governments do not always act in the best interests of the country when it comes to housing. We have had 35 years of reducing commitment to housing those on lower incomes or with support needs and of inadequate supply of new homes. We need to reverse this and politicians from all parties need to agree to so over more than one parliament.   

Leslie Morphy is the outgoing Chief Executive of Crisis, the national charity for single homelessness people.

Getty
Show Hide image

I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.