What went wrong?

According to Paul Keenan, those national figures have ignored local circumstances - while locally, estimates of need have mistaken waiting list figures for external demand.

As Anne Pittard points out, social housing is itself an unpopular choice of tenure, and it's located in the wrong place. The added worry is that an older generation who were happy to live there won't be around for ever...

Have you ever tried to explain why the extra 4.4 million homes will be needed in the near future? There are very good reasons why most of us don't try. For a start, the analysis is too complex, and most of us don't really understand it. Also, have you noticed that there is no regional or local dimension in the big reports like Holmans? It is very hard to talk to a local audience with figures in millions and millions. Even big conurbations seem hard to place in the huge numbers of new households, dissolving households, deaths, births and marriages. Where do we start?

A few years ago I began to try and get around these problems by observing what was happening in one city - Newcastle - with the intention of using observation to illuminate the big picture. I was specifically interested in two issues that were appearing after the 1991 census:

• firstly, the census underestimated the turnover of council housing, in many wards by more than 15 per cent. Why was this happening? What were the implications for census figures? Was the council data wrong?
  
• secondly, in the early nineties a new phenomenon of sudden abandonment of small areas of the city appeared. Could an analysis of the population and turnover information help us understand the trends that led to this?

The picture of household change and tenancy creation that has begun to emerge may challenge some of the assumptions made in predicting 4.4 million homes. And even if 4.4 million homes is the right answer, then the evidence from Newcastle shouts loud for a proper regional analysis of how and why people are moving.

The work suggests a number of areas for further enquiry;

• the census certainly underestimates many household movements; this might be because of the way it interviews the "head of the household"
  
• for example, recently formed or re-formed relationships might not report moves that include partners giving up a home.
  
• council housing waiting list allocations are predominantly formed by residents of council housing. In Newcastle we had assumed that anything up to 4,000 "new households" moved into council housing a year. In fact we found well over 2,000 of them lived in a council home but not as a tenant. They were living with family, leaving a relationship, trying again after a previous relationship etc. The picture is extremely complex. The big fact is that the housing market for council homes was more self-contained than had been expected.

As well as being more self contained, the market was also very localised. Over 80 per cent of moves were within a mile. Most people were moving very short distances within estates or just up the street. Most people know the houses, know the shops, know the areas intimately.

The degree of "self-containment" in the council market suggested some ways of interpreting the phenomenon of sudden small area decline. If large numbers of allocations were going to residents and ex-tenants of council housing; then we can suggest that this "churning" might also be very sensitive to perceived decline or threats from anti-social elements.

Newcastle had misconstrued the waiting list as a reservoir of demand, largely unconnected with existing council housing. In fact the pool shared the same space as tenants, so if tenants wanted to leave an area, their friends would also be unwilling to take up their vacated place.

At the same time we re-worked the census data using some of the observation on movement between areas to fine tune the usual methods of population projection. The council sector was quite self-contained but losing economically active households. Most tenants were pensioners. The new projections produced about the expected total households for the city as a whole - but reduced council and HA households by 4-6,000 over 6 years. The diagram (not reproduced on this website edition) is an attempt to simplify the Newcastle model. I have tried to show the movement within council housing as the central feature of a largely self-contained system.

The diagram shows that approximately 2,700 households move out of the sector in 1995/96 and only 1,700 move in to replace them. The moves within council housing were difficult to map and approximately 400 moves could not be accounted for. The result is a reducing number of households of 1,000 plus or minus 400 each year.

The diagram is still not complete. Work is continuing in Newcastle and Tyne and Wear to develop and test features of the work. The total number of all movers is still very hard to trace and Newcastle may be unique. Then again, it might not be. Either way, this example suggests we need less of a national model; and more of local observations.

Paul Keenan, North East Business Manager, English Churches Housing Group, and former housing policy officer for Newcastle city council. This article is based on work published in "Housing Abandonment in Britain, studies in the causes and effects of low demand housing", by the Centre for Housing Policy, York University.

Falling demand has prompted many housing authorities to ask "what's going on?" So far, most studies have concentrated on exploring what is happening within unpopular neighbourhoods. While this micro-level research is invaluable in improving our understanding of what makes neighbourhoods work, it has tended to lose sight of the bigger picture, and leaves the debate somewhat "tenure-blind". The assumption is that if we get neighbourhood management right, we can solve the problem of low demand.

In Sheffield, we took a different approach, looking instead at various aspects of the housing market across the city as a whole. Although only a preliminary study, it very quickly exposed the key influences on demand for social rented housing, leading us to conclude that while the effects of falling demand remain localised, they are underpinned by broader trends which are largely beyond our control.

It made us accept the need to substantially reduce the size of the social rented stock. Indeed, the results of the preliminary study were so clear that we wasted no time in taking action. We are currently planning a city-wide stock reduction programme.

If there are any messages from our experience in Sheffield, they are: look at what is happening to your existing tenants; acknowledge changing aspirations; and look at what people can afford.

In Sheffield, the age profile of the social rented sector is very different from that of other tenures. In 1996 something like 50 per cent of our tenants were over pension age, and the proportion was almost as high in the RSL sector. Many were aged between 70 and 80, when death rates accelerate rapidly. We knew that "age-related" quittings accounted for about half our tenancy terminations, and so we thought it quite important to project the effect of deaths on the tenure. The projections suggested that deaths would account for a loss of at least 20,000 households over the 10 year period to 2006 - almost a third of our existing tenants. In reality, some of these deaths would be earlier moves into care, and so our projections were probably on the conservative side.

Sheffield's council tenants tend to be slightly older than the rest of the country, but with 41 per cent of council tenants in England over pension age at the time of the last census, other local authorities must be facing the same problem.

Age-related quittings have been one of the factors driving up turnover. In Sheffield the relet rate has doubled over the last 10 years and now stands at 16 per cent. The question is, are younger households replacing older tenants in similar numbers? Evidence both locally and nationally suggests that they are making up an increasing proportion of new tenants, but critically important is how long younger households remain in the sector. Local and national research suggests that most younger households tend to see renting as a stepping stone. The overwhelming proportion of younger people (80 per cent in Sheffield) would prefer to buy if they had the choice, and this aspiration must be acknowledged.

Of course not everyone is able to achieve their aspirations, which are constrained by financial and other pressures. However, when we explored issues of affordability, it revealed that far more households have the potential to buy than we had anticipated.

Almost a third of properties coming on to the market in Sheffield are priced below £30,000. On paper, about 80 per cent of households headed by someone in their 30s can afford to buy at that price. Younger council tenants are least likely to have the resources to buy, but people tend to achieve more financial security once they reach their 30s. Unemployment rates, which in Sheffield are about 25 per cent among tenants in their 20s, fall to 9 per cent among tenants in their 30s. By that age, in theory as many as 50 per cent of tenants can afford to buy.

What intrigued us about these figures is that many people who appear to be able to buy, and would prefer to do so, are remaining tenants into their 30s and 40s. This took us from a position of asking "Why are people leaving?" to asking "Why are people staying?". The lack of attractive local alternatives may be discouraging some more affluent tenants from leaving the tenure, particularly if they have roots in an area. At the same time, it may be forcing others who do buy to leave the neighbourhoods where they grew up, further concentrating disadvantage into council estates. One of the key aims of Sheffield's strategy is to improve the mix of housing at a neighbourhood level, to encourage more affluent households to stay.

The results of Sheffield's research illustrate the challenge facing many housing authorities. We built council housing on a massive scale between the 1930s and 1970s. In those days it was an attractive option - conditions in the private rented sector were generally inferior, and mortgages were difficult to obtain. But conditions are very different today, and we now no longer need a large social rented sector. At the same time we are faced with managing the effects of a rapid rate of deaths among those who moved into council housing in its heyday.

There are no easy solutions, but detailed local analysis of the kind carried out in Sheffield is invaluable in understanding the problem, anticipating its effects, and informing our response to it.