Homes failing because of high prices and low incomes

Credit: William Barton/Shutterstock.com

Intended to mark the launch of their Living Home Standard benchmark for UK accommodation, the report shows that more than four out of ten British residences are failing on at least one of five measures of livability.

These measures are affordability, space, stability, decent conditions, and neighbourhoods, and together they show how the UK's limited housing stock is letting down millions of people.

Yet more than simply indicating once again that the UK needs to build more houses, the report shows how the housing crisis is also about poverty and income inequality, since those on lower incomes were significantly more likely to report living in substandard accommodation.

Affordability

As for what exactly "substandard" accommodation is, Shelter have defined it as any accommodation that fails to "meet all of the essential attributes, and a minimum number
of the tradable attributes in each dimension" they drew up in collaboration with British Gas.

The first of these dimensions is affordability, the lack of which was the most common reason for homes failing to meet the Living Home Standard.

Being a factor in 27% of failures, it reflects such "attributes" as the extent to which residents can meet their rental or mortgage costs without having to cut into their spending on other household essentials.

The next most pivotal dimension was "decent conditions", which in this case describes such things as whether the home can be heated effectively, whether it has hot and cold water, and whether it essentially works in the way people would expect it to work.

Causing 18% of failures, it's interesting to note that it's a noticeably less common factor in substandard housing than affordability.

That's because, even if 18% is still too high, it would nonetheless suggest that the main problem with UK housing is not so much the low quality of the houses themselves, but their high prices relative to people's earnings.

This would also go some way to explaining the next most important factor: space.

That is, while a one-bedroom flat may present no particular space issues to a single person living on their own, it suddenly becomes a problem when two single people (or more) are forced to move in together because they can't afford rental costs by themselves.

And this was the reason for the failure of accommodation for 11% of respondents to the Shelter survey.

For these 11%, they either lacked enough bedrooms for all members of their household, were unable to have any privacy, weren't able to cook properly, were unable to comfortably spend time with the rest of the household, or weren't able to store all their belongings properly.

Income

Yet once again, the main reason why they weren't able to benefit from one or more of these things was because they couldn't afford to live in bigger accommodation.

For some of these people, the ever-rising price of the average UK house - at £216, 750 after having risen by an inflation-busting 8.3% compared to last year - has led them towards rental accommodation. So too has the stagnation of wages, which decreased in real terms by 10.4% between 2007 and 2015.

And because they've been left with little option but to rent, some of them have had to suffer from issues related to the next dimension on Shelter's list: stability.

This relates to the extent to which residents feel they have control over how long they live in their homes.

It was the main factor in 10% of failures, and as Shelter themselves noted, it "primarily affected people living in the private rented sector".

As such, it becomes clearer that the fundamental problem is, not the material quality of homes, but rather the lack of affordable housing and the relative weakness of wages.

400,000 more unaffordable homes

Indeed, this becomes clearer still with a look at the report's breakdown of failures by various demographic categories.

For example, 55% of households with incomes of at most £9,499 live in homes that fail the test according to at least one dimension, in contrast to 31% of households with an income of more than £50,000.

And just to make it perfectly clear, if a household has an income of no more than £9,499 (which is less than 60% of the median UK income of £25,660), then it is officially in poverty according to Government measures.

This is why the Government's response to Shelter's report - to affirm that they will build 400,000 homes by the end of 2019 - isn't enough.

Instead of simply building 100,000 homes a year until 2020, they also need to do more to revitalise the economy and create sustainable full-time jobs that pay a living wage.

Otherwise, many people still won't have healthy enough incomes for the 400,000 new homes they build, forcing them into situations where they have to accept affordability, space and/or stability issues.

And sadly this would suggest that, if Shelter conduct their survey again in the coming years, they'll receive much the same results.