date: 30 June 2008

embargo: 00.01hrs Tuesday 1 July 2008

Housing shortages are affecting Britain's workplaces, says TUC report

With house prices falling, private sector house-builders are likely to start limiting the number of new homes offered for sale, at a time when the UK needs more flats and houses than ever before, warns the TUC in a report published today (Tuesday).

Fair Homes: Building a New Deal for Housing looks at the state of the UK housing market and says that the Government is right to plan to increase the rate of house-building. But with the population increasing and people living in ever smaller units, the report questions whether ministers' target of an extra three million homes by 2020 will be enough.

The TUC report says that the UK is in the midst of a huge housing shortage, with more than 1.5 million people in need of decent housing, a situation which will worsen unless urgent action is taken. More good quality, environmentally-friendly homes must be built and quickly, says the report, which also welcomes the Government's plans to build five new eco towns.

Commenting on Fair Homes: Building a New Deal for Housing, TUC General Secretary Brendan Barber said: 'Everyone in the UK should be able to afford decent housing, but for many people renting a good quality flat or owning their own home remains a distant dream. The high price of housing has forced many employees to live miles from their jobs, others are crowded into sub-standard accommodation and have given up all hope of ever reaching the top of the social housing list.

'Housing can have a huge impact upon an individual's working life and how productive they are once they go to work. Huge regional differences in the cost of housing have lead to labour shortages in certain areas, and property prices are forcing people to embark on ever longer commutes. Similarly, workers living in poor housing are more likely to suffer from ill-health, and are likely to be less productive at work. It's a problem the UK economy cannot afford to ignore.'

To illustrate the extent of the housing shortage, the report cites figures showing the huge decline in the number of new homes being built (by private sector house-builders, local authorities and housing associations) from a total of almost 365,000 new units in 1971 to just over 212,000 in 2006.

Fair Homes: Building a New Deal for Housing says that as falling house prices could see the private sector cutting back on the number of new homes it releases onto the market, the public sector will need to step into the breach and provide more social homes.

But it is no good building new homes if young workers cannot afford to buy them says the report. It calls on the Government to put more pressure on mortgage lenders to return to a more responsible system of lending. Over the last year, says the report, lenders have flipped from one extreme to the other - from offering many times an individual's salary to the current situation where many first time buyers simply cannot find a lender willing to provide them with a mortgage.

Ministers must also introduce measures to help the many thousands of people who were encouraged to borrow beyond their means and who now face the prospect of losing their homes, says the report. Without help to stay in their homes, there is a real danger that the UK could start to see repossessions return to 1990s levels - when 100,000 households a year had no choice but to hand back their keys to their mortgage lenders.

Calling for a new deal for housing, the TUC report says the UK needs:

• sufficient private sector homes at market rates and affordable homes for sale and rent;
• renovation and modernisation of the existing housing stock;
• more environmentally friendly housing;
• measures to stabilise house prices, to improve the accessibility and affordability of mortgages for first time buyers; and to ensure that those with short-term mortgage problems do not lose their homes;
• measures to ensure that sufficient mortgage finance is maintained and that mortgage providers are properly regulated; and,
• local authorities to be encouraged to build and operate more social housing, and to do more to ensure the re-use of empty homes.

NOTES TO EDITORS:

-Fair Homes: Building a New Deal for Housing is available from the TUC press office.

-The TUC report says that:

· 31% of households own their home outright

· 39% are buying with a mortgage

· 18% rent from local authorities and social landlords

· 12% rent from private landlords

· the UK's housing stock is growing at 0.5% per year

· the number of households is growing at 0.8% per year

· 1.6 million people are on the waiting list for social housing

· 0.5 million people are living in overcrowded accommodation

· 86.7% of employee union members are in home owning households, and

· 76.4% of employee non-members are in a home owing household.

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (900 words) issued 1 Jul 2008