Home National housing More houses won’t solve the housing crisis – people need lower rents

More houses won’t solve the housing crisis – people need lower rents

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The UK housing crisis hardly needs an introduction. It affects people across the housing spectrum – from tenants stuck with flammable coatings to tenants in overcrowded housing.

The last decade has seen a 141% increase in the number of rough sleepers. And the National Housing Federation estimates waiting lists for social housing at 3.8 million people.

In his first step as housing secretary, Michael Gove is reportedly set to put an end to Boris Johnson’s controversial planning shake up that critics say will give developers more power. Labor, meanwhile, pledged their own reforms, including an attempt to redefine affordable housing. Obviously, both parties are making housing a priority before the next general election.

There is a dominant idea among politicians that the solution to the housing crisis is simple: build more houses. The assumption is that more houses will not only house more people, but will also lower house prices. This is the logic behind Johnson’s planning reforms and his promise to “cut the red tape” in an effort to get more housing projects delivered faster.

My doctoral research joins that of housing specialist and author Anna Minton to question this logic. Building more houses without considering who can afford to live in them will not solve the problem.

Pressure from the UK government to build more houses has proved ineffective.
richardjohnson | Shutterstock

Unaffordable housing

Prior to 2011, communal properties were primarily billed at “social rent” – a rent set by a government formula that takes into account property values ​​and average local income, with greater emphasis on the latter. It tends to hover around 50% of the rental value of the market.

However, as part of the Affordable Homes program of former Prime Minister David Cameron, a new category of communal rentals has been created: “affordable rents”. This was set at up to 80% of the rental value of the market, the objective being to generate more income which could then be reinvested in the construction of other houses.

However, unlike “social rent”, “affordable rent” did not take into account average income. The calculation did not take into account what people who need social housing could afford.

Since 2008, even as UK house prices have skyrocketed, wages have largely stagnated. As a result, a growing number of people cannot afford so-called affordable rents. This includes those who previously relied on social rent, people receiving benefits, people on minimum wages and many key workers. Particularly in London, workers are being pushed to the outskirts of the city where they face expensive daily commutes to provide their essential services to those fortunate enough to live more centrally.

Cost burden

By law, developers in the UK must reserve a certain portion of any new development for affordable rent (or pay a contribution for new affordable homes instead). This, however, is of little consolation for those who cannot afford the 80% of the market rental value. Even at affordable rates, a three bedroom property in Camden, north London can cost a family over £ 500 a week.

Developers, however, can avoid meeting even this minimum obligation by claiming that their project will lose money if properties are rented below market value. Research suggests, however, that these claims are often based on opinions and arguments rather than facts.

The shift to affordable rents has therefore exacerbated the housing crisis. Despite a slight increase in housing construction, new homes under construction are too expensive for those who need them.

Furthermore, in seeking to resolve the housing crisis by increasing rents from social to affordable for municipal tenants, the burden of costs effectively falls on those who need them most. Lavish affiliates and tax breaks, meanwhile, are given to those who can afford multiple homes.

Taken together with the number of people in below-average housing, on council waiting lists or the 200,000 unhoused families, the rates of underutilized housing across the UK are indeed staggering: 268,000 properties have been unoccupied for more than six months; over 550,000 properties are used as second homes. Countless other apartments and houses are bought by investors or as a means of hiding illicit money.

Hand drawn balloons and posters outside a low rise council building in London
“We need affordable housing”… Residents of the Carpenters Estate protest against Newham Council’s relocation strategy in 2015.
Abdul_Shakoor | Shutterstock

Housing advocates agree that more social housing is needed. However, policy change alone will not be enough.

Creative and ambitious field campaigns are crucial to challenge this market logic that puts profits before people. There have been several examples: the long-standing project to save Cressingham Gardens in Brixton, London; large-scale campaigns in Berlin to expropriate business owners and legislate a rent cap. At stake are two opposing views on a home’s primary purpose: an asset for capital accumulation and investment, or a home.


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