From housing ladder to housing treadmillPosted: April 30, 2018 | |
Originally posted on April 30 on my blog for Inside Housing.
Once upon a time the image of a ladder was a fair representation of the housing system. Not anymore.
The old days in which the home-owning majority saved for a deposit and got a mortgage, a significant majority put their names down for a council house and got one and the rest used the private rented sector as a temporary transition are long gone.
And a report out today from the Joseph Rowntree Foundation (JRF) suggests a new image has replaced the ladder for people on low incomes struggling with high housing costs and insecure jobs and tenancies: a housing treadmill, where people ‘were running to stay and were worried about falling off completely’.
Researchers conducted in-depth interviews over time with 72 households in different age groups from around the UK who gave a household income lower than the Minimum Income Standard (MIS.
The MIS is JRF’s measure of what members of the public think is a socially acceptable standard of living and works out at £17,000 a year for a single adult, £40,000 for a couple with children and £27,100 for a single parent.
Housing and Life Experiences set out to understand more about how housing circumstances affect households’ experiences of poverty at different stages of their lives by identifying their ‘housing pathways’.
Some are still on the housing ladder ‘pathways’ of settled ownership, paying down the mortgage until they have minimal housing costs in retirement, and settled social renting, which mitigates many of the effects of living on a low income with good quality housing, a low rent and a secure tenancy.
However, many pathways are more insecure and exacerbate poverty. Some have moved in and out of ownership because of financial problems (second footers) or made the transition to ownership later in life usually via the Right to Buy (convertors).
Others were stuck social renters, unable to move because of low supply, and safety net social renters who had come into the sector after one or more significant life events.
In the ‘housing ladder’ age, private renting was seen as a transitional tenure for younger and more mobile households but more than half the private renters in the study expected to stay in the sector for the foreseeable future.
The threat of ladders turning into snakes was always there in the housing booms and busts of the 70s, 80s and 90s but the research suggests there are new groups of households who have lost their foothold in home ownership or social renting after falling into financial problems and now live under threat of homelessness in the private rented sector.
When it is working well the housing system can support people going through changes like having children, suffering ill-health or disability, losing your job and relationship breakdown. However, all too often insecure housing makes their problems worse.
This is the first report I’ve read that explores these issues in detail through the experiences of different sorts of household.
Among the private renters are people not receiving housing benefit but paying a large proportion of their rent and unable to save anything for the future.
As Anwen in North Wales puts it:
‘I worked it out for the time I’ve been here I’ve paid £40,000 to my landlord. That’s a lot of money, and I’ve worked bloody hard for that money … Why isn’t there more help to have got a mortgage? That £40,000 could have been coming back to my family and me, couldn’t it? If I was able to get on the ladder in the first place, but I wasn’t.’
Some like Jack in Fife fear a loss of income:
‘I am managing but if I fell ill I would be in trouble – I can’t afford to fall ill. If somebody gets in my taxi that’s got a cold, I say ‘Get out!’ I can’t afford to be off for two weeks.’
Only one of the private renters had actually experienced a rent increase but those who are ‘just managing’ live in fear of one. As Nick in London puts it:
‘I’m one rent review away, one complaint away from being homeless. It’s as simple as that … it’s exactly how it feels. It can’t be felt any other way; that’s the situation and I feel terribly, terribly vulnerable, I really do … Absolutely, the overriding threat that hangs dark over my head; I wake up with it every day, I go to sleep with it every night. There’s no getting away from it; I’m that far away from my whole world being turned upside-down.’
And then there’s Jackie in London, who bought her flat under the Right to Buy but fell behind with the mortgage when illness stopped her working. She had to sell her flat and now lives in a private rented studio flat paying three times as much in rent as she was for her mortgage.
But the direct cost of housing (a rent or a mortgage) is only part of the issue. Owners face maintenance and repair bills that make some wish they had never bought.
Private renters have to put up with damp and poor conditions for fear of a rent increase or being seen as troublesome tenants.
And social renters were worried about all the other bills such as fuel and council tax and the costs of simply making a home.
Melanie, a ‘safety net’ social renter in London, was eventually offered a house after 13 years of waiting and bidding but it needed cleaning, decorating and furnishing and she ended up £2,500 in debt.
The value of secure, stable and affordable housing shines through at a time when policy has been taking us in the opposite direction.
The researchers say the study supports calls for increasing the supply of social rented housing and rolling back time-limited tenancies.
Social renting does not emerge without problems with poor conditions and neighbourhoods and there is a clear message to landlords to offer tenants more support to sustain their homes.
However, relying on the private rented sector to house people on low incomes leaves them vulnerable to high housing costs, poor quality and precarious tenancies that undermine their ability to create a home.
A companion report by Altair Consulting makes a series of policy recommendations on access to private renting, shared social housing, reducing moving-in costs for social tenants and housing advice.
The days when the housing ladder existed now look like a temporary window of housing opportunity that lasted from perhaps the 1930s to the 1990s.
As housing secretary, Sajid Javid argued that the solution lay in ‘fixing the broken housing market’ and that task now falls to his successor, the aptly named James Brokenshire.
The JRF report shows that whoever is in charge needs to go much further: the housing treadmill is the result not just of a broken market but a broken housing system that is part of the problem for people in difficulties rather than part of the solution.