GUEST COLUMN:
Victoria Winckler
Director
Bevan Foundation
The outlook for housing in Wales in 2025 looks tough, especially for people on lower incomes.
For people who want to buy, purchase of a typical home costs 6.1 times the average full-time employee’s annual earnings. Even in the most affordable area of Wales, Neath Port Talbot, the typical home was 4.3 times average earnings. Purchasing a home is very much less affordable than in the past, with the main driver being rising house prices – while earnings in England and Wales have doubled since 1997, house prices have increased four-and-a-half times.
Part of the reason for house prices outstripping demand is that not enough new homes are being completed to meet needs. In the five years to March 2024, a total of 26,500 new homes were completed, of which 20,000 were in the private sector with the rest being affordable and social housing.
Unfortunately, the number of homes completed is far short of forecast need for a home. In 2019, the Welsh Government estimated that nearly 37,000 new homes would be needed by 2024, to be split roughly 50:50 between private sector and ‘affordable’ homes. It then set a slightly higher target for affordable and social homes of 20,000 by 2026.
What has happened since that target was set? The private sector has done its bit in terms of numbers, with slightly more new homes being completed than were estimated to be required. The big problem is in ‘affordable’ housing, which has delivered only a third of the homes forecast to be required, and an even smaller proportion of the 20,000 target.
Not only is this disappointing in itself, but many people argue that the estimates of need are increasingly inadequate. Growing numbers of people live in substandard accommodation – three in ten assessments of homes find at least one serious (‘Category 1’) hazard. Nor do the estimates of need reflect the growing numbers of people who are homeless, in temporary accommodation or on housing waiting lists. As an example, the number of people living in temporary accommodation because they are homeless is up almost five-fold over five years. Not only are the number of new homes not reaching the target, the target is too low.
In 2025 there must urgently be a step-change in the number of homes being built in Wales. But not any homes – the greatest need is for low-cost homes. Most people aspire to owning their own home, yet the cost is out of reach of a typical employee. And for those who cannot afford to buy, the creation of new social homes must increase dramatically, whether through accelerating construction or by acquiring existing homes and letting at a social rent.
The Senedd’s Local Government and Finance Committee has recommended that in the long term around one in three of all homes should be rented from a social landlord. Achieving this aim would mean doubling the number of social homes – an extra quarter of a million flats, houses and bungalows provided by local authorities and housing associations. Unfortunately it would take 250 years to achieve this aim at the current rate of completions.
The challenge is not in a far away future but right now. 2025 must not be another year in which thousands of people find themselves living in bed and breakfasts, hostels, caravans and modular buildings because Wales’ institutions have fallen way, way short of what was expected of them.
