TUC and Fabians calls for rethink on housing support

The alleged sins of social housing – that it traps people in poverty and prevents them moving to find work – can apply every bit as much to the much celebrated tenure of home ownership, argues a pamphlet written for the TUC.

Effectively, the Touchstone pamphlet, argues that efforts to meet housing needs have been sacrificed on an altar of an ideological faith that home ownership is best. This has not only led to social housing and even private renting to be downplayed in policy thinking, but has also led successive Governments to ignore the plight of poorer homeowners.

‘Can housing work for workers?’, written by the Fabian Society for the TUC, calls for a new approach to housing policy, warning that although more and more people want to own their homes, home ownership does not always bring prosperity.

In 1975, it says, only 62 per cent of the adult population aspired to own their own home, but by 2010 that figure had risen to 89 per cent. But huge mortgages taken out by workers in low-paid jobs can leave cash tied up in property while families become poor and unable to move to pursue employment opportunities elsewhere.

The report challenges what it claims is a commonly-held stereotype that social housing is for the problematic poor, that home ownership is for the aspiring many, and private rental is for a minority in limbo. After housing costs are taken into account there are 3.1 million people of working age who are owner-occupiers and who live in poverty, it claims, and of these two million have mortgages.

In areas where house prices are depressed, the report says that ways must be found to help families move in search of work, whose mortgages and housing commitments otherwise make it impossible for them to do so, but that people should not be forced to relocate.

“This report argues that false assumptions about the benefits of home ownership have led to policy makers failing to acknowledge that many owner-occupiers are trapped in areas with few jobs,” said Brendan Barber, the TUC’s general secretary.

“A new approach is needed, which includes extending financial and advisory support to owner-occupiers and accepting that both private rented and social housing have a vital role to play in creating greater mobility for this seeking work and greater financial security. Without new thinking, the UK is likely to repeat the mistakes of the past and become trapped in a cycle of housing boom and bust.”

The report is said to set out a plan for a new “ideologically free” way of supporting poorer home owners and improve labour mobility – one of these is to build more social housing units and make it easier to move between home ownership and private rental. Other aspects of the plan include:
•Extend housing support to help the two million owner-occupants who live in poverty and introduce a new housing cost credit to bring all forms of assistance for housing costs into the same system
•Compulsory insurance for all new mortgages – where the risk is shared by government, lender and borrower
•The Government should encourage the creation of communities featuring a mix of rental and owner-occupied properties, and not “pander to the perceived preferences of some” not to live next to social housing tenants
•In areas of the country where there are failing local economies, there should be economic intervention which recognises the link between housing and labour market policy
•There needs to be better regulation of the mortgage market and scrutiny of the financial health of borrowers and greater provision of long-term fixed-rate mortgages, offering greater stability
Report author, James Gregory, of the Fabian Society, said: “We need to get away from the sense of a tenure hierarchy in which we just assume that homeowners are happily independent and self-sufficient. The reality is that many face the same problems as private and social renters, particularly with access to vibrant labour markets, and our policy tools need to address this.”

However, the report was slammed by a “social entrepreneur” who consulted to the Government’s former ‘Big Society’ advisor Lord Wei, saying that the TUC’s report was based on an “outdated concept”.

That’s possibly unfair, given the Government itself assumes people should be prepared to move to where the jobs are, and geographic and social mobility are often regarded as going hand-in-hand, but Robert Ashton said: “Barber makes a good point about the importance of workforce mobility, but surely that’s an out dated concept.”

Ashton added: “In today’s ‘Big Reality’ people need to feel part of a community, where they can collaborate with neighbours and increasingly benefit from the growing opportunities to create their own job opportunities on their doorsteps.

“I’ve moved around the UK myself for work, and what you find is that your only connection with the place you live is your job. Keep moving as I did for a while, and you never really connect with the place you live. That’s good for commanding employee commitment but does little to engender the sense of belonging ‘Big Society’ is trying to create.”