As housing minister Grant Shapps points out, we need more private and social homes in the UK. The problem is that, working within tight fiscal constraints, the government looks unlikely to meet its targets. But there is an answer.
In our report, Making Housing Affordable, Policy Exchange highlighted the large swathes of very expensive social properties located in areas where most taxpayers cannot afford to live.
We argued that as these social homes become vacant, they should be sold off and the revenue reinvested in new build. Each property sold would provide the funds to build three or four new, decent quality homes elsewhere. This would be an invaluable step at a time when we have nearly two million households on the waiting list. It could be achieved by implementing a cap on the value of social properties set at the regional median, so new tenancies in £1m-plus council properties – which do exist – become a thing of the past.
We understand this is controversial, and that we will be accused of trying to ghettoise the poor and of destroying mixed communities. But these arguments miss the point.
Firstly, the public believes it is unfair to provide expensive social housing that most working people cannot afford. A recent YouGov poll for Policy Exchange found that 73% of people think that social tenants should not be offered homes worth more than the average in their area. More than half of those living in social housing also agreed with this statement, as did voters from all three main British political parties.
Another argument against our approach suggests that subsidising out-of-work families in expensive properties is a social good – it leads to mixed communities that benefit all residents, whatever their tenure and financial security. We accept that creating ghettos is not a good idea; yet in practice, mixed communities rarely exist in the areas with the most expensive social housing, and the UK is almost alone in taking this approach. Most countries mix social tenants with low- to middle-income earners in good-quality, but not very expensive, properties.
London is a prime example of how the current system fails. Take the increasingly rich and trendy boroughs of Islington, Hackney and Tower Hamlets. Here we find very wealthy families mixed with social tenants dealing with some of the highest levels of dependency and child poverty in the country.
These are not integrated, but parallel communities living side by side, yet a million miles apart. Each have their own focal points and places to socialise. Readers of the Guardian Housing Network could easily point out two sets of pubs in these areas, both serving very different parts of the community.
These are the clearest signs that such communities are not integrated. Successful mixed communities are those where you can see realistic role models that increase aspiration. They would mean a community where people are helped to move off benefits and into work. It would also be a community where families could afford to continue living in the same area and move up the housing ladder if they chose to. This implies mixing low- to middle-income workers with social tenants – not the UK's unique system that supports parallel communities and atrocious social outcomes.
It is time we realised the heavy cost of this system to society and the people it is supposed to be helping. We need to stop pretending that current policy is creating mixed communities and is good for tenants. Reform is needed because the public support it and the results would boost the economy and cut social housing waiting lists.
- Matthew Oakley
Head of Economics & Social Policy
- Making Housing Affordable: A new vision for housing policy
31 August 2010
Making Housing Affordable calls for a radical overhaul of housing policy, saving taxpayers around £20 billion a year. It calls for a big increase in the number of new homes being built for sale or rent in areas of high demand, with social housing tenants given new ways to get onto the first rung of the housing ladder.