Social economy alternatives are changing UK housing

Will_NixonSince the economic crisis, there is one market which remains disproportionately volatile: housing.

Providing safe and adequate shelter is a priority for Britain’s leaders and citizens. Yet it feels as if the market sits on a precipice between soaring prices and complete collapse.

Recent figures show UK house prices have risen for 14 consecutive months, with the average home costing £177,846 in February 2014 – the highest since April 2008, when the global financial crisis intensified.

The current solutions to the crisis are inadequate. Housebuilding is at its lowest rate since the 1920s. New developments are often opposed and the planning systems are rigged to protect those who already own property. Subsidies and government programmes are often ineffective or create even greater risks. The buy-to-let boom created a swathe of private landlords, but now means many people are being priced out of the market. The most recent Help to Buy scheme has supported some people onto the property ladder but this has raised concerns among economists who say that it risks creating another housing bubble. Throwing money at the problem alone won’t repair the damage already done.

Meanwhile, demand continues to rise. In Britain 1.8 million households are currently on the social housing waiting list and half a million households are overcrowded. Owning a home is fast becoming an exclusive club. Already, less than 1% of the population owns more than 70% of land in the UK.

Quietly rearing their heads are the social economy alternatives. But our political leaders are failing to recognise their advances to create fair and affordable housing for all. Co-operatives and social enterprises are revolutionising the housing market for the benefit of the people.

In Nailsworth, Gloucestershire, residents of a retirement village recently rallied together to secure their housing future after its profit-driven owners went into administration and quality of life in the village declined. Residents chipped in their money and created a social enterprise to run the village. Its residents are co-owners and control how it’s run and see that the majority of any profits are reinvested into the village and its community.

Other inventive approaches include co-operative homeshare schemes and social enterprise property guardians like Dot Dot Dot, which are making use of empty buildings and bringing down costs for renters and buyers. These alternatives are equipping residents and communities with the tools they need to take back control of housing in Britain.

The next government must address the lack of creativity to deal with the problems in housing markets. Embracing the Social Economy Alliance’s recommendations is a start. There should be community ownership and local people should be involved at the planning, development and finance stages of all large-scale developments. Tax systems can also be used to open up the housing supply from second and third homeowners, empty homes and absent landlords. And councils should be given powers to levy council tax surcharges on second homes and empty homes.

Fortunately, other players in the market are already seeing the value of social enterprise and co-operative housing models. Housing associations are a hugely important part of the social economy and bring to the table a combined annual spend of £13bn.

For charities and social enterprises, working together with housing associations is a perfect fit. Their models, values and core business objectives are frequently aligned.  The Green Light Report published in 2012 noted housing associations’ main motives for wanting to do more business with social enterprises was to create employment for their tenants (91%), deliver wider community benefit (78%), and improve service delivery for their tenants (69%).

The social enterprise Bounce Back provides painting and decorating services to a number of housing associations. Their workforce is made up of ex-offenders, so when housing associations use their services, they can achieve added social objectives, such as reducing crime or improving employment opportunities in their area. The partnerships they’ve formed are most effective because both organisations’ objectives can be achieved simultaneously.

Many housing associations are social enterprises in their own right, or work as part of groups that run social enterprises. PM Training, part of the Aspire Group, is a social enterprise which helps young people gain skills to find work. It improves homes, neighbourhoods and estates through its Homeworks service, which annually maintains 1000 gardens, paints and decorates 300 properties, and makes 500 environmental improvements – positively affecting the lives of more than 5000 local residents each year, whilst simultaneously creating jobs and training opportunities.

But far more can be done to increase collaboration among housing associations and other organisations in the social economy. According to the Green Light report, 69% of housing associations spent less than £50,000 a year with social enterprises, and both sectors face difficulties engaging with each other:

‘[Housing associations and social enterprises] are both working for the benefit of the community and in many instances, its poorest residents. They should make perfect partners in this endeavour, but often struggle to engage with each other’, explains Mark Richardson, report’s author.

On the other side of the fence, social enterprises and charities can use the added social value they create to help engage with housing associations. They should also actively seek out contracts and opportunities in their areas where working together could help both organisations achieve a greater social impact.

While work is still to be done, collaborations between housing associations and social enterprises are making headway tackling the UK’s housing problem. But our political leaders are keeping Britain’s housing market way behind the curve. Abroad, co-operative housing represents a much larger share of the market: 18% in Sweden, 15% in Norway and 8% in Austria, compared with just 0.6% in Britain. Our next government must take note and put people-powered models at the forefront of the market. The social economy alternatives in housing are radically changing the way property in the UK is built and owned, benefiting people and communities – they should not be ignored any longer.

  • This blog was written by Will Nixon, chief executive of PM Training on behalf of the Social Economy Alliance, of which PM Training is a lead partner


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Paige Hawin
Paige Hawin
10 years ago

A very interesting and detailed post Will. You are correct to state that the housing market is still extremely volatile after the crisis with the economy. Prices seem only to rise and it is true that there a few solutions. I guess it may be more accurate to say that there are few successful solutions. I do think there may be some weight with social economy input, and there are certainly some successful examples, although all these seem to be on a smaller scale. Whilst the proposition that there should be community ownership with more involvement from local people sounds like a great step forward as we aren’t getting much from the government, I’m not sure how well it will be implemented. After all, just how many people will be willing to get involved? I suppose the majority, but there will undoubtedly be a large portion who will not.

On the other hand, the idea of charities and social enterprises, working together with housing associations seems like a great one. It’s great that it offers the added benefit of providing more jobs. But in the end, how much can be do without the government’s backing?

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