Latest Public Sector News

02.08.16

Major cities must not be saddled with same housing crisis as London

Cities such as Manchester could soon see a housing crisis similar to that in London, the Resolution Foundation think tank has warned, adding that the new prime minister must come good on tackling the national housing deficit.

Research from the Foundation shows that Greater Manchester has had the biggest drop in home ownership of any UK region, with a 72.4% peak of home ownership in April 2003, that has now fallen by 14.5 percentage points to 57.9%.

Home ownership has also fallen by 13.5 percentage points in Greater London, 11.2 in the West Midlands and 10.6 in West Yorkshire.

PSE recently reported that progress is being made on a tripartite agreement between the government, the new mayor of London and the capital’s boroughs as an attempt to tackle the city’s housing crisis. There have also been calls from the LGA for a ‘renaissance’ in council housebuilding to meet future demand.

Stephen Clarke, policy analyst at the Resolution Foundation, said: “London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the north of England.

“The chances of owning a home have fallen fastest in Greater Manchester over the last decade, though the Leeds and Sheffield city areas have also experienced sharp drops.

“These drops are more than a simple source of frustration for the millions of people who aspire to own their home. The shift to renting privately can reduce current living standards and future wealth, with implications for individuals and the state.

“We cannot allow other cities to edge towards the kind of housing crisis that London has been saddled with. It’s encouraging that the new prime minister has talked about tackling the housing deficit. She may find that making good on this promise could secure as important a legacy as negotiating a successful exit from the European Union.”

Overall, the number of people owning their own home in the UK has fallen from 70.9% in October 2004 to 64.1% in February 2016.

At the same time, the proportion of households renting privately has increased from 11% in 2003 to 19% in 2015. In Greater Manchester, the rate increased from 6% to 20%.

Private renters spend on average 30% of their income on housing, whereas home owners with a mortgage spend 23%.

Tony Lloyd, interim mayor of Greater Manchester, said more action was needed from the government to increase the availability of housing.

“In Greater Manchester we are taking action with the powers we have but more must be done by central government to enable us to build the homes Greater Manchester needs now and in to the future,” he said.

Greater Manchester has set a target of building 15,000 homes over the next 10 years and is seeking to establish a Land Programme to support this.

(Image c. Dominic Lipinski from PA Wire)

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