Housing and Health – The Connections

(and why the Government is looking in the wrong place for a solution to the housing crisis)

Peter AmbroseVisiting Professor in Housing Studies

Health and Social Policy Research CentreUniversity of Brighton, England

Socialist Health AssociationCamden

23 February 2008

Establishing housing/health links

• It is not easy – the medical profession often uses a different standard of proof

• Health status is an outcome of a large set of factors

• Best to argue that good housing is a necessary but not sufficient condition for good health

• Well-designed chronological ‘intervention’ studies give best chance to demonstrate the relationship

• But these are difficult to carry out

The Stepney ‘Health Gain’ Study 1995-2001

• Contracted to assess the health gain from the SRB1 renewal of two estates

• Sample of households surveyed for self-reported health before and after the area improvement

• Self-reported ‘illness days’ fell from 35% of all person/days to 7%

• These findings, and the connection to housing quality, backed up by professional opinion in the area

• Project judged as one of 19 acceptable ‘intervention’ studies from 30,000 assessed (MRC Project at Glasgow University)

Other recent empirical work

• Stepney study found that better housing was linked to huge health improvement – but increased housing costs causing stress and problems

• So ‘healthy housing’ means affordable housing!

• Work on households with low incomes in Brighton and Hove showed the extent of stress caused by high housing costs – as did study of debt levels in Brighton and Hastings

• Current study of SE region for UNISON showing 76% of households say high living/housing costs affecting health - and these are households in top third of income range!

So what is happening here?

• 1993 to 2004: gross earnings index +59.1%house price index

+306.8%

• Recent survey - nurses cannot afford to buy in 97% of towns surveyed (was 43% in 2001)

• Nationwide ratio of house prices to gross annual earnings historically 2.5 to 4.0 – was over 6.0 in London for 14 quarters to late 2006

Deep orange areas – house prices = more than 8x earnings

How over-lending has produced the problem

In the 1980s the Thatcher Governments deregulated the finance sector = huge flow of house purchase credit

– House Purchase Debt outstanding 1980 = £53bn– if updated to 2007 at general inflation = £154bn– if allow for expansion of OO volume = £192bn – actual 2007 House Purchase Debt = £1000bn+ = £800+ bn ‘excess’ House Purchase Debt

- Has risen from 23% to 80% of GDP

House prices, consumer prices and earnings since 1980

NB - The effects of prices on rent levels

• Two connecting mechanisms between price levels and rent levels:

- since 2000 new ‘social’ rent-setting formula has taken capital values into account- in private rented sector the proprietors look for a competitive level of net return on capital values of properties

• Result - from 1980 to 2003 average % of male earnings taken by rents has risen:

Public sector + 93%Not for profit sector + 37%Private sector +122%

Heavy long-term mortgage debt means…

– long term exposure to interest rate risks– constraints on making private pension provision– effect on work/life balance? (NB UK long working hours

and EU Working Time Directive issue)– effects on age of bearing first child? (future NHS costs)– more reliance on non-parental childcare (both parents

working – connection to UNICEF Report findings?)– more stressful complications on relationship break-up– effects on organised labour’s bargaining capacity– mortgage repayments maybe continuing into retirement?

all these can have adverse effects on health and welfare and generate public costs

…and the Government’s response?

• Simply increase supply by a target amount that most agree is not enough

• Use the words ‘affordable’ and ‘social housing’ without realistic definition in terms of household finances – we need precise definitions!

• And what if output goes up by 1% per year but the flow of lending increases by 5% per year (as it is at present)?

• A HOLISTIC policy required that takes steps to regulate lending as well as increasing supply

• And we need to measure the health and other costs of NOT adopting rational long-term housing policies

Thanks for listening