Action is needed to tackle Manchester’s growing housing crisis, with house prices having quadrupled in recent years, a new report warns.
Making Home, by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) and housing and community services provider, One Manchester, explores ways to create new models and routes to homeownership for young people in England, looking at Manchester in particular.
Economic insecurity, the rise of the gig economy and out of reach housing costs mean new housing options beyond renting and owning are needed to provide security for young people, the report warns.
Young people today are cutting back on food, living at home and taking second jobs to fund housing costs, leaving little room to save for a traditional housing deposit.
An Opinium survey, commissioned as part of the research, found:
48% of young renters across Greater Manchester as a whole had to cut back on essentials (food, drink and other activities) to cover their housing costs, compared to 33 per cent across England.
Meanwhile 25% of young people in Greater Manchester live with parents for longer than they would like, compared to 20% in England; and 23% in Greater Manchester took on a second job, compared to 17% in England.
Just 2 per cent of young people polled in England owned their home through shared ownership.
While 25% of young people across England have access to the ‘bank of mum and dad’, 22% do in Greater Manchester. Across England, 13% relied on inheritance to buy their home, compared to just 5% in GM, while 13% in England had help from another person, compared to 8% in GM.
The rise of the ‘gig economy’ is increasing housing insecurity: around 6% of survey respondents work in zero-hours employment or work for app-based companies like Deliveroo. These individuals face barriers to both traditional mortgages as well as renting due to credit checks.
The report notes that while house prices in Manchester have quadrupled over the last two decades, political attention has focused largely on the housing crisis in London and the South East. The situation in Manchester is compounded by a larger private rented sector than the national average and a waiting list of 13,000 for social housing.
Devolution presents an opportunity to remedy this, the report suggests, calling on Manchester City Council and the Greater Manchester Combined Authority to introduce a range of new housing products to help address the crisis locally – which could be rolled out across England.
Government and the Greater Manchester Combined Authority need to negotiate a special Housing Affordability Deal to allow Greater Manchester the powers and resources needed to address its affordability crisis, the report adds.
This deal would give the Combined Authority the powers to invest in new developments and housing products such as shared ownership; rent to buy and combination schemes; curb steep rent increases in particular neighbourhoods through the introduction of Scottish-style Rental Pressure Zones.
Hannah Webster, report author and senior researcher at the RSA, said:
“Young people are being failed by our current housing system – and this is particularly true in Manchester.
“On the one hand, the cost of deposits and the increasing difficulties faced obtaining mortgages – especially given the growth in ‘gig economy’ with its volatile incomes – are preventing young people from owning their own homes. On the other, private renting is insecure with young people having little chance of stability or putting down roots, and social rent is all but unachievable. Other options are needed for today’s young people.
“We need to see new routes to let young people put down roots — including lowering the entry bar for shared ownership from 25% to just 1% and offering reduced rent to give room to save, would provide much more security than existing options, as well as a route to ownership. There is a greater role for housing associations in providing rent-to-buy options and council-run lettings agencies need to be established which act on behalf of renters and not just landlords.
“A new Greater Manchester housing devolution deal should give mayors and councils Scottish-style powers to cap runaway rents in areas like central Manchester. These ‘rent pressure zones’ would help those facing steep rents in certain neighbourhoods, without taking the step of introducing rent controls across the board. In Greater Manchester we suggest that individual councils have the opportunity to propose and review potential zones.”