Lack of Affordable Housing in the United Kingdom - Coursework Example

CRITICAL THINKING by of the of the of the School 13 December, Introduction Lack of affordable housing is one of the most precarious issues facing the government of the United Kingdom today. The tern ‘affordable housing’ has no single agreeable definition. The term is used differently by different people. In regard to policy, affordable housing refers to “a specific program designed to meet the needs of households whose incomes are not sufficient to allow them to access appropriate housing in the market without assistance” (Gurran, 2011, p.256). According to the Great Britain National Audit Office, and Audit Commission “affordable housing is housing where there is an intervention in the market through public subsidy” (2005, p.22).Other terms such as subsidized housing, attainable housing, and low-income housing can be used to mean affordable housing (Cowan, 2008). In recent years, the cost of property has grown more rapidly than incomes making it presently impossible for low and middle income earners to afford reasonable properties. First time buyers also form the group of people that is losing the most for lack of affordable housing (Whitfield, 2012). Due to this, some people have to search around for more affordable property in other areas. Sassi points out that “in the UK there is a deficit of between 30,000 and 45,000 affordable housing units being built each year” (2012, p.66). People working in high property value areas such as the South East and London are usually affected by the high prices of property. There is need for more affordable housing units to accommodate the needs of everyone, since even while housing benefits can reduce the burden that comes with housing for low income earners, the number of people in need of affordable housing is too big to be catered for through the housing benefits. The UK government has been investigating different approaches to increase the number of affordable housing, as well as planning on prefabricating parts and sometimes entire buildings to create room for more occupants. According to Sassi “prefabrication offers a good potential for creating energy-efficient housing by integrating higher levels of insulation in new construction systems” (2012, p.66). Prefabrication may be done on-site or off-site. However, off-site prefabrication carries more benefits over on-site fabrication since, in off-site fabrication manufacturing waste is reduced, while factory construction addresses the problem on construction skills shortage which is abound in the UK. The Policy of Building Affordable Housing in the UK In the United Kingdom, more than half of affordable housing is achieved through planning policy. In fact, “in England and Wales, the main legal basis for delivery is set out in section 106 (S106) of the Town and Country Planning Act of 1990” (Clapham, Clark and Gibb, 2012, p.388). However, planning policies were originally intended to reduce damage or loss to a local area. Today, policies address a wide range of issues. For a number of decades, the distribution of low cost housing, which is also used to mean affordable housing is a key policy challenge in the constituent nations of the United Kingdom and even internationally. The United Kingdom’s government housing policy vision is that each and everyone should have the chance to own a suitable home, which is affordable, and located within a reasonably diverse community (Hepperle et al., 2013). According to the UK government, affordable housing previously encapsulated intermediate housing and social rented units. The government however revised this definition to include affordable rent, but exclusively to people who qualify for social housing. Intermediate housing includes shared equity, intermediate rent, and shared ownership. According to Jones, White and Dunse, affordable housing is “an indicative test of the ability of the market to meet the housing requirements of households and for households’ resources to be in some way sufficient to pay for the housing costs of some threshold form of decent housing” (2012, p.235). Affordability is a very different concept from affordable housing policies. The United Kingdom affordable housing policy covers increasing supply of low cost housing to meet demand, average housing either shared or own, for example shared equity, or for rental at a standard in between market and social rents. Local house prices and local incomes determine eligibility for affordable housing in the United Kingdom (Cornwall Council, 2012). The United Kingdom affordable housing policy through the Barker agenda decided to accelerate the affordable housing planning process to avoid having to meet housing demand for too many people in future. The government also decided to change the greenbelt system accounting for land, which had been there for about sixty tears, promotion of more diverse zoning to accommodate leisure, offices, retail, and housing units, and encouragement of more Brownfield housing development. Above this, encouragement of more shared equity schemes, with good chances for low income households to buy property and rent the rest were encouraged (Tallon, 2010). Propositions to the Continuation of Building Affordable Housing Policies in the UK There is dire need for the policy of building affordable housing in the United Kingdom to be continued. The main reason for this is the fact that housing supply in the United Kingdom is not keeping up with demand. To deal with this rising problem, there is need for the UK government to increase housing supply and solve issues of affordability when it comes to housing. The rising demand for housing in the UK can be attributed to the growing number of households with one person and improved rates of life expectancy. According to Wilson, “There are almost 1.8 million households on English local authority housing registers and significant levels of overcrowding in the private and social housing stock” (2010, p.76). Many problems in Europe can be attributed to lack of adequate housing (Spicker, n.d.). Poor housing has been seen to have a direct impact on the educational attainment, and health of residents. The ability of people to move and find work is also limited by difficulties experienced in accessing affordable housing. Targets that were set during the introduction of the recent affordable housing policy are far from being met. This is true given that, in 2007, the United Kingdom government had agreed on a target to have supplied 240,000 homes each year by the year 2016 (Wilson, 2010). However, in 2007, there was a lot of pressure due to the credit crunch and the serious recession leading to targets not being met. It is important to consider that while this was happening, the population of people in the United Kingdom was still rising, and thus demand for affordable housing was also constantly increasing. Previous governments in the United Kingdom failed to solve the housing crisis making it grow worse by the day. Past years have been associated with lack of sufficient investment in the construction of new homes, and as a result of this, many people could not afford rent or buy the homes they wanted. This is another reason why the government of the United Kingdom needs to continue with its policy of building affordable housing. If the whole project is stopped or underrated, the effects will certainly be more devastating, and the future of affordable housing in the United Kingdom will be destroyed. Coming generations might be denied affordable and stable homes, which may lead to a multitude of other problems. Another current crisis in the United Kingdom is the high cost of housing that continues to rise with time. This can be attributed to the fact that housing supply continues to fail to keep up with housing demand, creating room for home and rental unit owners to charge high prices on property. This kind of problem can be referred to as a crisis in affordability. The affordability crisis is more pronounced in individuals with average and low incomes since this makes them unable to even begin the process of purchasing or renting property. Many stocks of social housing in the United Kingdom have been sold off under the UK’s right to buy without being replaced. In December 2011, over 75,000 households in the United Kingdom were homeless, in late June 2012, 51, 640 homeless people depended on temporary accommodation, and currently, over 400,000 households live in overcrowded conditions (Shelter, 2012). Oppositions to the Continuation of Building Affordable Housing Policies in the UK Despite the fact that the policy of building affordable housing in the United Kingdom has in some ways helped solve a number of housing issues, and seems a great way to completely solve the housing problem, it is problematic in a number of ways. This is because the policy of affordable housing leads us back to the question of why housing is not affordable in the United Kingdom, the question of tax or no tax, the problem of lack of achievement, and the contradiction of location. 1. Why is Housing in the United Kingdom Unaffordable? Affordable housing is a story that has been told over and over again in the United Kingdom. It is even more questionable why housing has become more expensive over the years, instead of reducing in price. Given the fact that the move towards affordable housing was started many years ago then the price of property and housing should be affordable to the majority. According to Oxley and Smith “affordability rates have been rising in many European countries as production subsidies have been cut and output has fallen” (1996, p.189). Since 1992, housing prices in the United Kingdom have remained high and continue to rise due to the fact that there are constraints imposed on housing land availability, such as the implicit policy of constraints, that began decades ago (Evans, n.d.). Diacon, Pattison, and Vine point out that “there have been four cycles of rising and falling UK house prices over the last 35 years” (2009, p.7). The fluctuations in the price of housing have also certainly had serious negative impacts. Current increases in rent in the United Kingdom can be attributed to “the reduction in government grants for affordable housing and the increasing involvement of the private sector” (Burayidi, 1997, p.128). 2. Tax or no Tax In the United Kingdom affordable housing policy, conditions stated in the agreement between the local government and housing developer are problematic. This is because the requirement towards a developer to provide affordable housing can be regarded as a tax. However, the United Kingdom government fails to refer to it as a tax, while in fact; it is hypothecated tax (Evans, n.d.). The contribution by the developer is no way voluntary, and thus full payment is ultimately made in the end. According to Jones and Watkins “it is accepted that planning constraints can contribute to high land values and un-affordability, so a tax in the form of an obligation on development can be used to provide affordable housing” (2009, p.166). Money to pay developers certainly comes from the high taxes charged on almost all resources in the United Kingdom, thus the high and continuing rise in current housing and cost of living. 3. Affordable Housing Policy Lack of Achievement The policy of affordable housing in the United Kingdom has so far not been successful in meeting its goals. Very few targets set by councils are achieved. A good example is the City of Edinburg, which had planned to provide 25% of new housing in form of affordable housing in 2001(Evans, n.d.). For one reason or the other, this target was not achieved. Councils in the United Kingdom also seem to have and place other objectives above the objective of meeting affordable housing. This can be seen in the case where occupants have been asked by developers to make tradeoffs in order to get more affordable housing. According to the Joseph Rowntree Foundation, problems in achieving affordable housing in the United Kingdom have been attributed to lack of clarity in the housing policy framework (2001). 4. The Contradiction of Location The main purpose of the affordable housing policy is to provide affordable housing to those in need of it. From this assumption, affordable housing should be developed in areas that are more deprived. Cheap affordable housing is most necessary in low income areas, rather than in relatively high income areas, where most developers seem to target. King describes that “we assume that because people want to live in London and the south-east of England they should be sufficiently affordable to allow them to do so” (2010, p.124). Reference List Burayidi, Michael A., 1997. Multiculturalism in a Cross-National Perspective. Lanham: University Press of America Inc. Clapham, D. F., Clark, William A. V., and Gibb, K., eds, 2012. The SAGE Handbook of Housing Studies. London: SAGE Publications Ltd. Cornwall Council, 2012. What is Affordable Housing? [online] Available at: < http://www.cornwall.gov.uk/default.aspx?page=12131> [Accessed 13 December 2012].  Cowan, K. M., 2008. “Green, Affordable” Housing: A Contradiction in Terms? [online] Available at: < http://www.stlouisfed.org/publications/br/articles/?id=509> [Accessed 13 December 2012].  Diacon, D., Pattison, B., and Vine, J., 2009. The Future of Housing: Rethinking the UK Housing System for the Twenty-First Century. London: Building and Social Housing Foundation.  Erwin Hepperle et al., 2013. Landmanagement. Zurich: European Academy of Land Use and Development. Evans, Allan W., n.d. Paradoxes in the Provision of Affordable Housing in Britain [pdf] Available at: < http://www.prres.net/papers/Evans_Paradoxes_In_The_Provision_Of.pdf> [Accessed 13 December 2012]. Great Britain National Audit Office, and Audit Commission, 2005. Building More Affordable Homes: Improving the Delivery of Affordable Housing in Areas of High Demand. London: The Stationery Office. Gurran, Nicole. ed., 2011. Australian Urban Land Use Planning: Principles, Systems and Practice. New South Wales: Sydney University Press.  Jones, C., and Watkins, C., 2009. Housing Markets and Planning Policy. West Sussex: John Wiley & Sons Ltd. Jones, C., White, M., and Dunse, N., eds, 2012. Challenges of the Housing Economy: An International Perspective. West Sussex: John Wiley & Sons Ltd. Joseph Rowntree Foundation, 2001. The Effectiveness of Planning Policies for Affordable Housing [pdf] Available at: < http://www.jrf.org.uk/sites/files/jrf/n41.pdf> [Accessed 13 December 2012]. King, Peter, 2010. Housing Boom and Bust: Owner Occupation, Government Regulation and the Credit Crunch. Oxon: Routledge.  Oxley, M., and Smith, J., 1996. Housing Policy and Rented Housing in Europe. London: Chapman & Hall. Sassi, Paola, 2012. Strategies for Sustainable Architecture. Florida: Taylor & Francis Publishers. Shelter, 2012. Building More Homes. [online] Available at: [Accessed 13 December 2012]. Spicker, Paul, n.d. An Introduction to Social Policy. [online] Available at: < http://www2.rgu.ac.uk/publicpolicy/introduction/housing.htm> [Accessed 13 December 2012]. Tallon, Andrew, 2010. Urban Regeneration in the UK. Oxon: Routledge. Whitfield, Christine, 2012. Lack of Affordable Housing in the UK. [online] Available at: < http://www.affordablehomeadvice.co.uk/effects-of-the-lack-of-affordable-housing.html> [Accessed 13 December 2012]. Wilson, Wendy, 2010. Housing Supply and Demand [pdf] Available at: [Accessed 13 December 2012].   Read More