Put the human aspect back into housing

In our world – whether that is finance or housing or a mix of the two – it is easy to forget the human angle. Talk of yields, debt and gearing, and concentration on rates of return and appreciation, risk making bricks and mortar look like balance sheets. Yet there is an intensely human dimension to the current housing market's woes, as I was reminded when reading a fascinating new report written by the University of York's Centre for Housing Policy. It begins by covering the familiar territory of how much better off we are today thanks to the appreciation of residential property in the UK, and produces some impressive statistics to support its contention. For example, the value of privately owned homes in the UK has risen from the equivalent of 100 per cent of the UK's gross domestic product in 1980, to 185 per cent of GDP in 2007. Back in 1995, average net property assets for 25- to 34-year-olds were only £9,000 (Dh48,600) but by 2005 this had risen over tenfold to £95,000. And again in 1995, average net property assets for 45- to 54-year-olds beginning to think about retirement, was £54,000 – yet by 2005 this had more than tripled to £182,000. The report – prepared for the National Housing and Planning Advice Unit, an independent body that advises the UK government on open market housing – then turns to another familiar topic, affordability. It says that long periods of sustained house price growth in the UK, even when offset by short spells of falling values such as today's, have culminated in the classic affordability problems we see in 2009. These include first time buyers (even those on high salaries) being unable to afford homes and renting often being more affordable than purchasing. But then the report moves to the less familiar territory of the human fall-out of these problems. Of course, it makes uncomfortable reading because it spells out that: - The wealthiest 10 per cent of the UK saw home values rise 322 per cent from 1993 and 2003. For the poorest 10 per cent the rise was just 102 per cent, widening a wealth gap. Children of well-off parents often borrow from them to buy their first home – less well-off familiar cannot do this, so perpetuating inequality; - Those unable to afford homes tend to live in overcrowded conditions, especially in the private rented and social rented sectors; - In rural areas where house prices have been fuelled by second home buyers and well-heeled retirees, young people must leave to afford a home to buy; - Public service employers can do little to boost pay or perks to attract lower-paid employees reluctant to work in areas where homes are high-priced; - The less well-off commute further than better off counterparts who can afford to live near centres with good transport links and larger job concentrations; - Difficulties in meeting housing costs (rent, mortgages and repairs) are felt disproportionately in lone parent and ethnic minority households; - Overcrowding damaged the health of parents and children via depression, anxiety, stress, insufficient room for children to play, high levels of argument and fighting, sleep disturbance and the inability to entertain friends; - Housing problems may trigger longer-term behavioural and mental health problems, too, and damage education prospects for children. Now much of this is common sense – since when have poor housing conditions helped relationships, health and schooling? But it adds emphasis to see these issues written down and backed up by substantial background information and drawing on other bodies' research. So for those who still say that the UK has enough homes and that the downturn may have done the country a favour by restricting further house-building, think of the human consequences of your irresponsible philosophy. In 2007, before the credit crunch, it was declared that to meet the growth in demand, there should be 240,000 to 297,700 new homes built annually until 2016. Similarly ambitious targets were set for Scotland, Wales and Northern Ireland. Now, two years later, we are lucky to see 80,000 homes built each year thanks to the squeeze on lending and the lack of confidence amongst buyers. Savills, the estate agency, predicts new-build levels in England will not return even to 140,000 per year – scarcely half the number required – even by 2013. This is because once sites are mothballed, there is inertia in the system and it takes time to rebuild teams and update the master-planning required on many sites. So those opposed to new homes should not gloat, merely thinking they are getting one over the developers. They should instead recognise that such a head-in-the-sand attitude breeds social problems. - The writer is a property correspondent with The Observer Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .