Families face six year home wait

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A family whose home is repossessed may have to wait more than six years before they are permanently rehoused in a two bed home, council leaders have warned.

The number of families on social housing waiting lists in England will hit five million by 2010, they claim.

They blame a combination of falling house prices, the credit crunch and a lack of affordable homes.

Sir Simon Milton, chairman of the Local Government Association, will make the warning in a speech later.

If a family becomes homeless they will normally be offered temporary accommodation, such as bed and breakfast, and they will be placed on a waiting list for a permanent home.

Sir Simon says four million people are already on waiting lists for social housing in England - and this number can only grow.

Ministers say they are investing £8bn to provide 70,000 homes a year by 2011.

But the number of new homes being built by local authorities and housing associations during the past decade has fallen to its lowest level since 1947.

'Unprecedented pressure'

In a speech to the Chartered Institute for Housing, Sir Simon will warn that around 1.6m households, or four million people, are currently waiting for social housing.

"With the repossessions, the end of small-deposit mortgages and the millions of people already on social housing lists, it will mean that those trying to get a home they could call their own from the council could wait more than six years for a two-bedroom house," he will say.

It could well mean in the coming months that councils will have to help pick up the pieces as people end up on social housing lists Sir Simon MiltonLocal Government Association

"Although house prices are slowly falling, they are still beyond the reach of many.

"The slowdown in private sector house building will eventually affect the amount of affordable housing that is being built. That will mean fewer new social homes at a time when there will be more demand for them."

He says strong house price gains in recent years have put unprecedented pressure on social housing.

Sir Simon says the credit crunch has led to around 40% of new mortgage offers being withdrawn, while lenders are demanding increasingly large deposits, making it harder for first-time buyers to get on to the property ladder.

We have taken action to support the minority of borrowers who may be facing difficulties, including £9m more for face to face debt advice Caroline FlintHousing Minister

Housing associations are also struggling to secure loans to build new affordable housing, while developers are cutting the number of homes they are building, so the amount of new affordable homes is being squeezed.

"With the banks overstretching their credit facilities, it could well mean that in the coming months that councils will have to help pick up the pieces as people end up on social housing lists," Sir Simon will say.

"Even when the economic good times were rolling, councils saw ever-increased pressure on their housing stock.

"Now that the credit crunch is upon the country it appears that thousands more people will look to councils to provide them with a permanent home as they either find it impossible to get on the housing ladder or see their home repossessed."

'Top priority'

Sir Simon will urge ministers to free councils from the overly tight financial restrictions they face so that they can meet demand for social housing.

This includes allowing councils to borrow on the open market in the same way that housing associations do, and reform of housing finance.

Local authorities should also be given greater flexibility to allocate housing based on local area need.

"Social housing has to be a top priority because the harsh reality is that fewer people are getting on to the housing ladder," Sir Simon will add.

Housing Minister Caroline Flint said the government had "taken action" to support borrowers in difficulties because of market conditions, including providing £9m more "for face-to-face debt advice".

"We are investing £8bn to provide 70,000 affordable homes a year by 2011, including 45,000 social homes for rent," she said.