Even Britain’s cheapest city has a housing crisis
FOLLOWING an election in which housing proved to be a key issue, the situation in the northern English city of Burnley shows just how pervasive Britain’s property crisis has become.
A former mill town of roughly 95,000 at the heart of the so-called Red Wall that traditionally voted Labour but swung to the Conservatives at the 2019 election, Burnley faces shortages that are familiar across the country: Steep rises in rent and house prices, stagnant wages and a shortage of affordable new homes. But one thing sets Burnley apart. While people struggling with affordability in Britain could look somewhere cheaper, that isn’t possible here, because no better options exist. With an average house price of just over £123,000 (S$212,000), the place already has the cheapest housing stock of any UK city.
Costs in the town – regained by the Labour Party from the Conservatives in the Jul 4 election, despite an overall reduction in its vote share – are still too high for many. Even after a recent national increase, maximum permitted housing benefits are lower than rents for even Burnley’s homes. That’s significant in a town where wages are low enough that 70 per cent of private tenants receive some benefit, despite most having paid workers in their household. And owning a home is no guarantee of relief – in 2021, housing advocate Shelter reported Burnley’s poorest owner-occupiers are being forced to sell because they can’t cover the cost of essential repairs.
“There’s a misconception that these problems always affect the most disadvantaged,” says Phillip Jones, director of New Service at local social housing provider Calico, “but with the housing crisis in Burnley, it’s more the lower-to-middle earners”.
“Covid and the cost of living crisis never fully hit the poorest in society – at least in terms of service deprivation – because that group knew how to access services, while we have people at the upper end who can afford interest rate rises,” he continued. “It’s people in the middle – where 20 to 30 quid can make the difference between food on the table or not – that are really struggling.”
Burnley’s struggles reflect trends nationwide. The UK now has over 112,000 households in temporary accommodation, while the number of people sleeping rough has risen by 61 per cent in a decade. The shift has been powered in part by soaring rents, which rose nationally by 9.2 per cent in the 12 months preceding March 2024. And the market fever seems unlikely to break soon. The government has consistently missed pledges made in 2017 to get 300,000 new homes built a year, and some experts now estimate that Britain needs as many as 500,000 new homes a year for at least a decade solely to keep up with growing demand.
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Faced with these shortages, a sense of fatalism is setting in: A March 2024 survey found that 48 per cent of Britons who wanted to buy a home doubt that hope will ever become reality.
Yet housing proposals in the election manifestos of both of England’s major parties were surprisingly modest. The Labour party excluded housing from both the five “national missions” and six “first steps for change” outlined in its platform, while its target of 1.5 million new homes during the next parliament only maintains the 300,000 annual goal previously set (but not met) by the Conservatives. It has however promised the “biggest increase in social and affordable housebuilding in a generation”, the construction of new “garden cities” and reform of the broken planning system. This suggested a more proactive approach than the Conservatives who, while pledging 1.6 million new homes had they been re-elected, promised no new social housing at all, citing public-private partnerships and cuts to first-time-buyers’ stamp taxes as key motors for new homes. Both approaches left room for doubt as to whether the policies and political will behind them could be enough.
“There is a welcome new policy consensus emerging on both the need to assist first-time buyers and to dramatically increase the number of new homes built across Britain,” says Cara Pacitti, senior economist at think tank Resolution Foundation, in a release accompanying the group’s latest housing report. Pacitti nonetheless notes that the election’s winners nationally “will struggle to hit these stretching targets without significantly more funding in place to boost affordable housebuilding, and to support low-income families with rising rents. Britain’s new housing consensus desperately needs new cash for it to deliver”.
With such affordable housing, Burnley could represent a respite from these national conditions. Terraced houses –albeit small, often needing repairs and built 100 or more years ago – are still available for as little as £40,000, and two-bedroom homes can be rented for less than £500 a month. With a recently pedestrianised city centre full of handsome Victorian sandstone, the city’s surrounding green hills are widely visible, while the presence of the University of Central Lancashire and a football team that punches far above the town’s weight make Burnley a pleasant alternative to larger local centres such as Manchester.
Burnley’s low housing costs are a problem because the town lacks enough quality jobs to lift it out of poverty. Once a key manufacturing centre, the skilled roles in industry once offered here have been replaced by less secure service jobs, often on zero-hours contracts: The warehouse of fast-fashion retailer BooHoo is now one of its main employers. Burnley has the lowest wages of any UK local authority, with the median resident earning £520 weekly, compared to a national average of £642 and strikingly lower than the median weekly wage of £707 less than an hour away in Manchester.
On Jul 4, Burnley voted out its first-ever Conservative MP, Antony Higginbotham, elected in 2019 partly in hope that the party’s plans for “levelling up” the North to closer parity with prosperous London and the South through extra investment might kickstart a revival. But during the outgoing Conservative government’s term, when with just 10 per cent of the levelling up money spent by March of this year, the city’s most visible benefit has arguably been investment in repaving and tree planting in its centre – a welcome change that nonetheless falls far short of the economic transformation many wanted.
Low wages leave many Burnleyites with impossible choices. Despite an acute need, only 15 per cent have social housing tenancies, forcing many into private housing where conditions are poor and rising costs can mean a choice between heat and food for many, according to Alex Frost, an author and vicar of local church St Matthew the Apostle.
“You have landlords who will buy a house, put a single toilet in it and then rent it out room-by-room,” he says, “sometimes to families who then have to share with all sorts of people. What you’ll find in Burnley is that the community is all-but-unbreakable, so people do manage, but some of the properties here are just awful”.
With Manchester not far away, Burnley has attracted commuters seeking cheaper properties, typically at the higher end of the market, where most of the town’s new homes tend to fall. At the cheaper end, there has been a post-pandemic feeding frenzy as landlords snapped up terraces for the rental market.
“After Covid, housing took a huge bump upwards,” says Gareth Dooley, director at local estate agent JonSimon. “The average price in Burnley rose 20-25 per cent in a year or so, so a cheaper terraced house rose from, say, £40,000 to £55,000 to £60,000. In the immediate post-Covid period, we could put a house for sale online and have 20 enquiries within 24 hours.”
Landlords drove this boom. Prices remained beyond the pockets of many locals unable to save for a deposit, while many banks won’t grant mortgages to prospective owner-occupiers at prices that low.
For more than a decade, the council has sought to improve its housing stock. One policy makes landlords seek a five-year licence in return for demonstrable plans for repair and a pledge to act on complaints within 28 days. In addition, funding has gone to refurbish dilapidated properties, while some new affordable housing has been built. Yet delivery is far short of demand, and complaints from tenants suggest that protesting to landlords does little to improve conditions.
If the major parties’ policies are delivered, then the housing crisis across Britain might ease, but nothing suggests a rapid turnaround. Both Conservatives and Labour lost ground from their 2019 results, while voters embraced the Liberal Democrats, now the constituency’s second party at 23.1 per cent, and the Reform party. Housing seems by no means to have been the only issue shaping this result, but Burnley’s situation, and its voters apparent ambivalence about the new government, sends a clear message: When people risk being priced out even in the country’s cheapest town, Britain needs more than half measures to end its housing crisis. BLOOMBERG
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