1. Affordable housing: current outlook and challenges for the future Professor Christine Whitehead, LSE and CCHPR, University of Cambridge
Westminster Social Policy Keynote Seminar Forum,  Implementing the Housing Strategy - affordable rent, social housing and localism   Wednesday, 1st February 2012  Royal Over-Seas League, Park Place, London  

2. Definitions of affordable housing?
Affordability in the marketplace – house prices and rents
Assistance required to identified groups in need of a decent home at a price/rent they can afford
Initiatives to provide affordable housing for identified groups at sub market rents or prices

3. Increasing house prices in the UK

4. Affordability in the market place
House prices rising faster than earnings and incomes at least until 2008
Affordability ratios have improved for those who have managed to access home ownership – but many excluded by deposit requirements as well as by uncertainties
Rents have been rising faster than inflation and indeed incomes especially in London
So both affordability and access problems

5. Changes in tenure structure
1971
1981
1991
2000
2007
2010
Owner-occupied 51 56 66 69 67
Private rented 19 11 9 10 12 14
Housing Associations -- 2 3 6
Local Authorities 31 30 21 15
Total (m) 23 25 26 27

6. Owner occupation by age: UK

7. Increasing tensions in the rented sectors
Competition in the private rented sector between those who would traditionally have been in owner-occupation and those further down the income scale in need of government support
Long term trends: worsening distribution of income and differentiation between regions/areas
Shift away from rental to demand side subsidies
Increasing constraints on local housing allowances - also impact of welfare cap
Slower turnover in the social sector
Inadequate new supply

8. Trends in new building since 1950

9. Looking to the future
Household projections suggest maybe 230,000 additional households per annum in England
Big increases in elderly and lone parent households
The vacancy rate in the existing stock is low by international standards, especially in London – though more could be done to match households to dwellings and so reduce overcrowding
Estimates of housing need suggest around 250,00 dwellings are required, if standards are to be maintained
But no evidence that, even were the market to improve, anything like this number of dwellings can be produced.

10. 2008-Based Projections of Households in England to 2026
2006
2016
2026
(thousands)
Couple households
11,394
11,727
12,060
Lone parent households
1,607
2,035
2,495
Other multi-person households
1,318
1,287
1,268
Male one-person households
3,100
3,944
4,787
Female one-person households
3,924
4,614
5,407
All households
21,344
23,608
26,016
Source: 2008-based projection tables made available by DCLG

11. Newly Arising Demand and Need for Housing in England in 2006 - 2026
Market sector
Social sector
Total
(thousands)
Projected net increase in households
3,519
1,154
4,673
Secondary residences
240
Vacant dwellings
115 20
135
Replacement of social sector re-lets “lost” through earlier Right to Buy sale
486
+ 486
3,388
1,660
5,048
Annual average
169 83
252
(Homes for the Future annual average)
(169)
(73)
(242)
Source: Data on household tenure used in Homes for the Future

12. Components of Change of the Housing Stock in England
2006 – 07
2007 – 08
2008 – 09
2009 – 10
Average
(rounded, thousands)
New build completions
193,080
200,300
157,630
124,200
169
Net conversions
7,600
9,020
8,640
6,230 8
Net change of use
20,150
17,640
16,640
13,600 17
Net other gains
460
1,020
270
970 1
Demolitions
22,290
20,500
16,590
16,330 19
Net additional dwellings
198,770
207,370
166,570
128,680
175
Source: Department for Communities and Local Government, Live Table 120

13. Barriers to Development: the Way Forward
Short term: availability of funds for developers and purchasers – both for owner-occupation and for private renting; uncertainty about the future
Longer term – loss of capacity in development industry; nature of the industry; planning and land availability; need for equity investment in housing; is there really demand?
Government strategy includes: planning reform; contracts for 170,000 new affordable homes by 2015; 100,000 homes on public land; 100,000 95% mortgages; 100,00 additional homes from Right to Buy and 100 plus more initiatives.
Will this change the nature of the game?