In the Autumn Statement yesterday, in between much of the positive economic news and more eye-catching announcements, George Osborne said that social housing tenants will be given priority on the housing waiting list if they need to move for a job. The Chancellor has correctly identified that social housing tenants are disproportionately immobile when compared to the rest of the population and he is right to do something about it.
Across the country, one in eight moves is linked with work. However, only a few thousand – out of four million – social tenants move home each year for job-related reasons. One of the key reasons for this is the very real risk of leaving behind your social tenancy, with life-time tenure and low rents, for the private rented sector which can offer much less security. The existing state of affairs often traps social tenants in areas of limited employment opportunities.
This in part helps to explain why social tenants have been falling further behind the rest of the population on a number of important indicators. In 1981, the proportion of working-age social tenants in full time employment was just shy of 70 per cent; today that figure is 35 per cent. This statistic is mirrored by the decline of social tenants’ annual earnings relative to the national average. In 1980, a council tenant’s average income was 73 per cent of average earnings; today it represents just 41 per cent.
However, if we want to encourage people to move for work, it is essential that there are more affordable homes for people to move into and this includes social homes. Sadly, this is where George Osborne’s policy becomes trickier to implement. 4.5m people are currently on the social housing waiting list so it is unlikely that you will be able to access a social tenancy even if prioritised without increasing the supply of housing.
It is also estimated by DCLG that the number of households in England will increase on average by 232,000 each year until 2033. The last time this country built more than 230,000 homes in a year was in 1979 and successive governments have been falling well short of this target. In recent years, this shortfall has been in excess of 100,000 homes.
More needs to be done to improve affordability because unfortunately the areas with the most active job markets are also the most unaffordable for housing. In London, the average house price is 9 times median earnings in that area, house prices are 8 times median earnings in the South East and seven times median earnings in the East of England.
If we want people to move for work, to take higher paying jobs and progress their careers obviously quality employment support and skills are integral, but we will have to address our housing shortages too. George Osborne has identified the problem correctly, now we need some solutions which the CSJ’s forthcoming review on housing, led by Natalie Elphicke will seek to address.
DCLG Live Tables, Table 803.
DCLG Live Tables, Table 808, & ONS, Annual Survey of Hours Earnings, EARN 01
DCLG, Laying the Foundations, A housing strategy for England
Ratio of median house to median earnings