Everyone in every generation should have access to a Good Home. A Good Home is one that promotes stability, flexibility, affordability and opportunity for all. Stability, flexibility, affordability and opportunity for all are the four fundamental pillars of a Good Home.
Good Homes support better educational outcomes and improved life chances for young people. Good Homes are ones that result in healthier, happier and safer lives. A Good Home is one that promotes labour mobility and the growth and productivity of our country's economy. It provides the circumstances to build savings and financial resilience to meet life's ups and downs.
A stable home can be a home that you own or a well-managed home that you rent. It's one in which you can put down roots, concentrate on your job and bring up your family.
A fundamental and necessary element of a stable home is the ability to choose to stay in that home, provided that you pay the rent or mortgage.
According to the long running English Housing Survey, the average stay in private rented housing is less than four years which is around:
- three times lower than that of social renters;
- three and a half times lower than that of the average tenure across all tenure types; and
- four times and a half times lower than that of owner occupiers.
However, the professional private rented landlords' body, ARLA reports that the average length of tenancies is even lower, at just 17 months (around 1.4 years). That is around:
- eight times lower than that of social renters;
- nine times lower than that of the average tenure across all tenure types; and
- twelve times and a half lower than that of owner occupiers.
There is strong evidence that the inherently insecure nature of that tenure adversely impacts people living in private rented homes, particularly families. For example, research from Citizens Advice has found that 60% of parents in the private rented sector said that they found it hard to plan for the future due to the fear of being asked to move at short notice. The Resolution Foundation's Intergenerational Commission has found that this kind of tenure uncertainty has tripled since 2003 to around 1.8 million families living in the private rented sector by 2016.
Flexibility in the workforce is an essential component of a successful economy.
With homeowners moving half as often as a decade ago and young people who are renting instead of owning moving less often than they did more than two decades ago, it is simply not the case that a very large private rented sector results in increased labour market mobility. Indeed, the evidence suggests that the reverse may be true, that the doubling of the size of the private rented sector has reversed housing mobility. That has not just been detrimental to the effective operation of the housing market, it is also detrimental to the effective operation of a mobile workforce in a productive economy.
Labour mobility will be improved by ensuring that industrial strategies in high growth areas provide specific consideration to make sure that there is adequate housing flexibility at a price, location and type to support job mobility and opportunity.
A Good Home is an affordable home. An affordable home has two elements:
- it is a home that a person can enjoy and pay the housing costs in a usual month without significant financial strain; and
- it supports financial independence, allowing a person to build up savings or equity.
The two age groups most affected by falling housing stability are the 25-34 and 35-44 age groups, with falls of over 20%. The latter group primarily because those in private rent remained in private rent as they themselves grew older over this period. They did not progress into home ownership nor benefit from the availability of social housing in the way previous generations had done. It truly is the case that "Generation Rent" is becoming "Nation Rent".
Currently, only 6% of pensioner families rent privately, however, this is estimated to more than double by 2060 as the current trend continues in to old age. However, this may be a gross underestimate if we continue to see the generational rent retention that is already seen in the 35-44 age group.
For many households, especially younger households, rents are reaching levels that look increasing unaffordable and are impacting on household financial stability.
When housing costs start to creep up to between 40% and 50% of income, financial problems soon set in. That is the view of the Bank of England, Shelter and other debt specialists. Research from the Local Government Association found that one in seven private rented households already had rent payments that exceeded 50% of household income. In London private sector rent is, on average, 49% of a renter's earnings.
In the private rented sector, the highest proportion of household income spent on rent is for those aged 16-34, at 38% of income. So the younger age groups face a triple difficulty in that they have less access to social housing, less access to home ownership and pay the highest proportion of their income on rent.
Mortgage costs have never been as cheap as they are today. Yet, paradoxically, never has it been harder for young people and low-income households to raise the necessary deposit and meet the mortgage affordability test. Despite the benign mortgage environment, home ownership is currently back at levels not seen since 1985.
The collapse in home ownership has led to a collapse in housing equity held by younger generations. The under-35s hold only £6 of equity in every £100, compared to £75 of equity in every £100 in their parent's generation.
The number of first-time buyers last year was 270,000 less than the number entering into home ownership some two decades earlier. This is the true impact of the mortgage affordability tests and the struggle to raise a deposit.
In most parts of the country it takes about 8 years for the typical first-time buyer to save a deposit, rising to nine years in the South East of England, and nearly ten years in London.
A Good Home is a home that provides a person with better opportunities. A home which provides opportunities results in healthier, happier and safer lives. Happier lives are lives which are less lonely. Healthier lives are lives which have better health outcomes, fewer hospitalisations and a lower likelihood of illness. Safer lives are lives with a lower risk of crime and fire.
Good housing drives better outcomes. Levels of employment; standards of living; disposable income; educational attainment; likelihood of attending university; family stability; likelihood of not being a victim or perpetrator of crime; wellbeing; health; life expectancy; and community engagement are all higher if an individual has access to good housing.
It supports each generation to have a better life than the generations before.
Leading research on behalf of Shelter over the last decade has demonstrated how children's educational development is impacted by what they describe as 'poor' housing. The adverse outcomes are stark:
- Homeless children are between two to three times more likely to be absent from school than other children and are more likely to move schools, resulting in lower levels of academic achievement.
- A quarter of children living in bad housing gain no GCSEs, compared with only 10% of those not living in bad housing.
- Only 53% of children living in bad housing achieve five or more A to C grades at GCSE, compared with 71% of other children.
- Those in bad housing between the ages of 11 to 15 are twice as likely to have been excluded from school than other children.
It has been estimated that £14.8 billion will be lost in earnings for children currently in school purely due to the impact of housing on their GCSE results.
A happier life is a life which is not lonely. The Office for National Statistics found that renters were significantly more likely to report loneliness "often/always" and "some of the time" than those who own their home. In contrast, those who own their home were significantly more likely to report "hardly ever" or "never" experiencing loneliness. Seventeen per cent of owner occupiers feel lonely some of the time or often, while 32% of renters feel lonely some of the time or often – a 15 percentage point difference. Fifty-nine per cent of owner occupiers feel lonely hardly ever or never, while 41% of renters feel lonely hardly ever or never – a 18 percentage point difference.
The reason for the difference in levels of loneliness, and therefore happiness, is an understandable consequence of other factors, in particular, the affordability and stability of a home. Individuals who do not have a stable home will find it more difficult to engage in the community and forge new relationships in their local area, contributing to loneliness. Those who find it difficult to afford a home and have limited disposable income after housing costs will also find it difficult to play a full part in local life.
It has been found that owner occupiers have better health outcomes than other groups, with renters having a poorer health status and higher rates of serious health conditions. Poor housing affects people in different ways at different stages in life. In particular, housing affects children at different ages in different ways. Respiratory illnesses because of poor housing conditions are more severe in younger children, while older children are more impacted by the quality of the neighbourhood due to peer pressure. However, children living in more crowded or noisier homes suffer fewer effects if they have a room where they can spend time alone.
The physical aspects of housing have been found to be one of the key determinants of health. This is because housing not only provides shelter but also access to goods and services. People's health improves as they move into better housing or improvements are made to the physical amenity of housing. The more precarious and the poorer the quality of housing, the poorer the health outcomes of residents.
Social housing can have an important role in producing positive health outcomes. In Australia, it has been shown that placement into social housing was associated with a significant drop in hospitalisation rates.
The Chartered Institute of Environmental Health has shown that poor housing conditions impact the wider determinants of health – such as children in poverty, homelessness, sickness and reoffending – as well as health improvements and healthcare. Health improvements relate to fewer instances of excess weight, hospital admissions, injuries and increased wellbeing.
The key determinant of negative housing outcomes under the banner of poor housing conditions is cold, damp homes. Overall the number of damp homes is decreasing. However, damp is far more prevalent in the private rented sector than in social housing or owner occupation, with 8.2% of private rented housing which have a damp problem, compared with 2.7% of homes in owner occupation and 4.7% of social housing.
It has been calculated that poor housing conditions increases the risk of severe ill-health or disability by up to 25% during childhood and early adulthood. Consequently, over 300,000 children living in bad housing suffer from a long-term illness or disability. Respiratory problems are acute. 8% of children in bad housing have respiratory problems, with 10% of those living in acutely bad housing, compared with 6% of other children.
Those in acutely bad housing are more likely to attend A&E than other children. Over a year, 24% of children in acutely bad housing visit A&E, compared to 21% in bad housing and 20% of other children.
Children living in bad housing are more likely to run away from home at least once during their childhood than other children (9% to 6% respectively). Children between the ages of 11 and 15 living in poor housing are more likely to be the victims of bullying – 40% of those living in bad housing, compared with 43% in acutely bad housing and 33% of other children.
Parents of children living in acutely bad housing are three times more likely to be contacted by the police.
The basic structure of a home also determines safety. Families living in poor housing are more at risk of fire. Homes in poor physical condition are more likely to experience a domestic fire and less likely to own a smoke alarm.
This not only impacts the individual, it also impacts the government on a macro-economic level. The annual costs of poor housing on public spending has been estimated at £2.5 billion to health and £1.8 billion to criminal justice.
If you would like to read more about the value of housing, read 'A Time for Good Homes' here.