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Welfare Reform on the Web (August 2009): Social housing - UK

139,000 council houses to be built in next decade

R. Booth

The Guardian, July 7th 2009, p.13

Rule changes announced by the Government last week which allow local authorities to keep rent from council housing and receipts from right-to-buy sales rather than give them to the Treasury, mean local authorities are now planning to build new council housing at levels not seen since 1990. There are 5 million people on the waiting list for social housing.

Outlook for UK housing and the implications for policy: are we reaping what we have sown?

G. Pryce and N. Sprigings

International Journal of UK Housing Markets and Analysis, vol. 2, 2009, p. 145-166

The authors identify four key areas of policy weakness which have contributed to the housing crisis of 2008/09. First, successive UK governments have promoted the notion of property as an investment, and have encouraged low-income families to participate in the apparent benefits of home ownership. Secondly, deregulation of the mortgage industry combined with a culture of property speculation has led to the rapid expansion of the buy to let sector, which in turn has spurred the construction of huge high-density city centre building projects which are particularly vulnerable to house price collapse, producing negative consequences for homeowners in entry-level housing. Thirdly, financial deregulation has led to a massive influx of cheap credit during boom periods, leading to unsustainable levels of indebtedness and vulnerability to negative equity and repossession. Finally, successive reforms of the welfare system have weakened the safety net for low-income borrowers and have increased the sensitivity of repayment difficulties to the economic cycle.

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