Most people know that the UK is in the midst of what has been dubbed the ‘housing crisis’. Indeed it is now part of mainstream political thinking that more house building is urgently required. Greater Manchester is no different from many other parts of the UK. The Department of Communities and Local Government has predicted that there could potentially be 1,500 more families in Greater Manchester than homes by 2026 if current trends continue. Added to this, average rental prices have increased by more than 20% in Manchester over the past 12 months. These statistics will surprise few but it would be misleading to assume that simply building more homes is a magic bullet.
Firstly it is worth reflecting that certain areas in Greater Manchester have many empty homes. Indeed there are currently around 34,724 empty homes in Greater Manchester with places like Rochdale finding itself under the least pressure from a housing perspective. The problem then is not just scarcity of resource but also distribution with certain areas suffering from low demand. There are many long term reasons for this but it has likely been exacerbated by the bedroom tax and will potentially get much worse with onset of city regionalism with its emphasis on centralised assets and facilities. As we have argued elsewhere a holistic approach is essential when seeking to address any social issue in Greater Manchester and the revival of and investment in all of our communities is needed if the housing pressure on the Greater Manchester region as a whole is to be eased.
Secondly house building on its own will not solve the issue of soaring rental prices, and people having to face the uncertainty of renting from a private landlord, if more social housing is not included in residential developments. Housing associations have recently been dealt the double blow of having their rents reduced at a rate of 1 % per year until 2019 and effectively having had to opt into the extended right to buy scheme. Whilst the long term effect and practical reality of an extended right to buy scheme may not yet be clear, the 1% reduction certainly means that housing associations will have to downscale the scope of their ‘offer’ to tenants, reduce the scale of house building and retrofit programs that were in place and make large scale redundancies. All of which means that their ability to ‘place shape’ local communities in places like Rochdale is severely diminished.
With housing associations then seemingly not being in a position to act as a catalyst for a revolution in building social housing, and nothing meaningful having been done to address the steep decline in local authority building, the government’s solution seems to have been to leave it to housing developers. Yet the three largest post Devo Manc housing development plans in Greater Manchester will have no social housing included whatsoever.
At the Trinity Way, Middlewood Locks and Pomona developments an obligation to build social housing has been side stepped after successful use of the financial viability assessment. The incentivising of developers in this way clearly diminishes any positive social and economic impact on the local community and will mean heathier dividends for the shareholders of the speculators. These developments also exemplify the fact that for most developers having a large social housing element in the scheme significantly diminishes the profitability of a project and is therefore avoided where possible. Whilst private developments are undoubtedly needed to increase supply, historic trends show that UK developers tend to be cautious about over extending themselves and cannot and will not solve the housing crisis left to their own devices.
Yet there is a very real possibility that developments such as Trinity Way, Middlewood Locks and Pomona will continue to be the norm. Development such as these are seen as potentially lucrative investment opportunities, as an alternative to the London market, for foreign funds and fit in with the government’s northern powerhouse agenda. Further the government’s proposals to replace an obligation to build social housing with an obligation to build affordable housing will further lock out the majority of people from accessing a decent affordable home, whether for rent or to buy. The government’s claim that a house for sale at £250,000 is affordable is bizarre and obviously out of reach for most people. The outcome of this will be higher earners will have an abundance of choice and the rest will have diminishing options if any at all.
The only way to address the housing crisis is to implement a viable housing building strategy which recognises the need for more social housing and at the same time aims to rejuvenate those areas with low housing demand so that housing is distributed fairly for everyone. Greater Manchester Councils need to be more robust in insisting on social housing being included in private developments and at the same time ensure that the houses that are built are as energy efficient as possible. They also should be empowered to build more houses themselves using the devolved housing fund. It is only by implementing a radical alternative that we will start to reverse the long term effects of a flawed housing strategy to date.
(please note the views expressed here are my own and not necessarily the views of any organisation I work with or for)