Tag: Resolution Foundation report

Cramped, Cold and Damp: Too many UK homes are sub-standard, property association says

TOO many UK homes are “cramped, cold and prone to dampness” a leading property expert has said. Jonathan Rolande said a damning report which lambasted much of our housing stock, was “correct”.

The Resolution Foundation study concluded the UK’s housing stock is also the oldest in Europe with four-in-ten homes built before 1946 meaning many were poorly insulated as a result.

Commenting on the report Jonathan Rolande, founder of House Buy Fast, said: “The poor state of housing as highlighted by The Resolution Foundation Report shows that many of our homes are suffering in the same way as much of our other infrastructure – railways, roads, school buildings, water services, wherever we look we see a similar issue.

 “A huge proportion of our housing stock is pre-war, the typical Victorian terrace. Many that aren’t were hastily built immediately after the war to replace the two million lost to bombing. The Foundation explains that these properties are cramped, colder and more prone to dampness. This is correct.

“However, the reason that UK homeowners and tenants are more hard done by than their foreign counterparts isn’t simply because of the age or style of property, it is more deep rooted than that. The issue is not the stock, it is the price. 

“Newer homes – even brand new (perhaps especially brand new) have their own problems too. Older properties are usually well built, solid internal walls make them well soundproofed, and they have large lofts and large windows.

“Even the cheapest will usually have decent outside space. The issue is a lack of surplus income to carry out essential repairs and energy-saving upgrades. Those that are let suffer because landlords are not properly incentivised to improve their tenant’s homes. 

“The issue is supply, there are too few homes full stop, irrespective of their age. If more, many more, were built, prices and rents would be less volatile and gradually, our housing stock would become better value for money.”

According to the Resolution Foundation report, countries that have a similar level of prosperity to the UK consume more housing in terms of amount per person than we do here.

Britain’s total expenditure per capita is just 4 per cent lower than that of Austria, for example, but we spend 24 per cent less on housing per person than Austrians do. The equivalent figures for Canada are 2 per cent and 22 per cent respectively.

Overall, when it comes to housing, UK households are getting an inferior product in terms of both quantity and quality, the report claimed.

Compared to our general price levels, the UK was ranked by the Foundation as having the highest quality-adjusted price of housing of any developed economy.

Adam Corlett, Principal Economist at the Resolution Foundation, said: “Britain’s housing crisis is likely to be a big topic in the election campaign, as parties debate how to address the problems of high costs, poor quality and low security that face so many households.

“Britain is one of many countries apparently in the midst of a housing crisis, and it can be difficult to separate rhetoric from reality. But by looking at housing costs, floorspace and wider issues of quality, we find that the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy.

“Britain’s housing crisis is decades in the making, with successive governments failing to build enough new homes and modernise our existing stock. That now has to change.”

Rainy Days: poor will pay for Coronavirus ‘for many years to come’

Lower-income households are twice as likely as high-income households to have increased their use of consumer credit during the crisis, leaving them particularly exposed to the ongoing economic crisis, according to a major new Resolution Foundation report published today.

Rainy Days, published in partnership with the Standard Life Foundation, examines the distribution of wealth across Britain in the run-up to the crisis, and how the crisis is having different impacts on the balance sheets of richer and poorer households.

The report shows that those most at risk in the crisis have the weakest private savings safety net to fall back on, while the crisis itself is exposing Britain’s wealth gaps, and the ability of low-wealth households to weather the economic storm.

A typical worker in a shut-down sector of the economy – and therefore most at risk of unemployment – had average savings of just £1,900, far less than the average savings (£4,700) of someone who has been able to work from home during the crisis.

These workers are most worried about making ends meet if they lost their main income source for a month (24 per cent are worried, compared to 17 per cent among those working from home).

Looking at the impact of the crisis on households across the income distribution, the report finds that lower-income households are far more likely to run down their savings and turn to high-interest credit.

Among the second poorest fifth of households, one-in-three (32 per cent) are saving less than usual, compared to one-in-six (17 per cent) who have increased their savings. One in four of these households have increased their use of consumer credit – most commonly credit cards which carry high interest rates – during the crisis.

In contrast, just one-in-eight high-income households have increased their use of consumer credit, while one-in-three (34 per cent) are seeing their savings increase significantly as their spending falls.

These very different experiences of this crisis reflect both how focused its negative effects have been on lower-income families, and the big wealth gaps across Britain before the crisis struck.

The report shows that the wealth gap between the richest and poorest tenth of households grew by more than £370,000 (in real terms) between 2006-08 and 2016-18 to reach £1.4million.

Wealth gaps across the country have also grown, with London and the South East accounting for 38 per cent of all wealth in 2016-18, up from 32 per cent in 2006-08.

The Foundation adds that while wealth inequality has not increased in recent years, it remains almost twice as high as income inequality.

Rainy days shows that the lack of a private savings safety net, for so many low-income households in particular, could pose significant challenges as the Government phases out its emergency support for family incomes.

It highlights the need for both a stronger social security safety net, and for policy makers to do more to tackle very large wealth gaps once Britain emerges from the crisis.

George Bangham, Economist at the Resolution Foundation, said: “Pre-coronavirus Britain was marked by soaring wealth and damaging wealth gaps between households.

“These wealth divides have been exposed by the crisis. While higher-income households have built up their savings, many lower-income households have run theirs down and had to turn to high-interest credit.

“The impact of coronavirus crisis will be with families for many years to come. That’s why it’s important for the Government to both strengthen the social security safety net via Universal Credit, and assist more low and middle-income households in building up their private safety nets by boosting their savings.”

Mubin Haq, CEO at the Standard Life Foundation, said: “Today’s report highlights how vital wealth is to our living standards. Not only does it help reduce costs, especially housing, but savings and assets provide an important buffer when income drops.

“Millions are now facing an income drop and in need of that buffer. Savings are not a nice to have, they are a must have.

“The growing jobs crisis and the tapering of furlough and self-employment support brings this to the fore. People who lose their jobs or have a drop in their income, and have been unable to build up their savings, are being pushed into borrowing. Those on the lowest incomes will have less choice and more likely to be reliant on high-cost credit.

“The Government needs to move quickly to make further reforms to boost incomes so people are protected from the financial crisis created by the pandemic. In the longer term the Government needs to think of ways everyone has a greater share of the wealth generated in the UK.”

Rainy-Days