Affordable housing – can we afford it?

Here’s a very simple problem, with a much less simple solution. In the south of England the number of households is growing much faster than the number of houses being built: between 1997 and 2001 over 400,000 new households came into being, but only just over 300,000 houses were built. The result is that house prices rise inexorably as more people chase fewer houses. And that effect reaches across the board – higher house prices mean that private landlords put rents up to get a return on the cost of the house, social housing becomes more costly to build so fewer are built for a given amount of money, and of course more and more people on good salaries or wages simply can’t afford to purchase a house – and they in turn look to the rented sector, which drives prices up still further.

The figures in real terms are stark. In Southampton now an average earner with a 95% mortgage can afford about £55,000 for a house – but even ‘affordable’ houses start at around £90-100,000.

It is a race we’ve been losing in the South for a long time. Councils like Southampton have worked very hard on the problem: planning permissions for new housing all now carry a substantial tag on the agreement that a percentage of the development will be ‘affordable’ – either for rent or for sale at a discounted price.

This helps, but does not in itself stem the tide. To start with, when ‘affordable’ houses are sold, unless the land is very carefully covenanted the ‘affordable’ house reverts to an unaffordable price and we have to start all over again.

The only solution in the South, frankly, is to build far more homes, and to protect a good proportion of them from ending up on the open market. The Government has recently announced plans to do just that, with advanced proposals for 250,000 homes in the Thames gateway Milton Keynes and Ashford areas. But what about around Southampton?

Recently, there was a major row featured in the pages of the ‘Echo’ when Hampshire declared that it simply could not find the space to build more homes. I don’t think that is an option anymore. We simply need to find the land, preferably already used, preferably not in green belts, to put the houses on. That may mean some compromises with long held policies about development in parts of the county – and it may mean as we are already seeing, the creation of far more dense developments in our cities. The question is – are we as residents going to support these policies, or are we simply going to price most of us out of the housing market?

What do you think about this - email me and let me know