Poverty and housing (and questions about “Help to Stay”)

Two reports have caught my attention this week and they overlap in terms of tone and content.  The first report is the Joseph Rowntree Foundation report on Poverty in the UK (there is a short report there; you can download the full report there too), which disaggregates its data by devolved government, and which makes for pretty depressing reading.  The report suggests that there are 700k people in poverty in Wales, a rate of 21%.  The main drivers of poverty are said to, “… vary across different geographies – a greater reliance on renting and higher costs of housing are substantial drivers in larger cities in particular, while lower rates of employment, with fewer employment opportunities alongside a greater concentration of employment in lower-paid roles and sectors, are more significant drivers of poverty across many post-industrial and coastal areas”.  There has been a fall in the employment rate in Wales, but the saving grace is said to be the tenure mix and housing costs; otherwise, the poverty rate would be higher.  The gap in life expectancy between most and least deprived areas is 6.3 (female) and 7.5 (male), although this gap is smaller than in England and Scotland.

This report is important because it demonstrates the disparities between tenures and housing costs, and the effects on poverty.  This is the essential backdrop context for the operation of housing law in Wales.  For a long time (probably since the mid-1980s), there has been an assertion explicit in policy that the private rented sector can take the strain of the housing market, as it shifts away from social housing provision, but this has patently had effects on poverty rates (across the UK, including Wales), and there must be doubts as to its appropriateness for the most vulnerable, and those with care and support needs (I’m just going to leave that point there for now, and hopefully will come back to it another time).

The second report of interest comes from Shelter Cymru (and I am grateful to its author for sending it to me :)) and its about a rise in mortgage repossessions in Wales.   During the pandemic, there were no (or, more accurately, hardly any) possession claims processed by the courts.  Since the pandemic, there has been a gradual rise in claims and orders made.  The numbers are not massive (390 claims in the third quarter of 2023) compared with the UK as a whole and the number of households in owner-occupied homes (1,347177 in the ONS 2021 census, although quite a large proportion of those live in properties they own outright – see this interesting blog by Dr Steffan Evans), but they are increasing.  However, the individual stories will no doubt reflect the employment market and/or increasing mortgage costs.  Drawing also on their own internal data of presentations to them, it is suggested that “… we believe this data points towards a potential growing problem of affordability among mortgage holders. Something that should perhaps be no surprise given the ongoing cost-of-living crisis that sees day-to-day expenses increasing alongside the continuation of higher mortgage costs than many had become accustomed to”.

What is equally, if not more concerning, though, is the operation of the WG’s “Help to Stay” scheme.  By this scheme, homeowners in or facing difficulty can get an equity loan from the WG.  It has been in operation since November 2023 and apparently had £40million assigned to it (see eg this BBC report).  There are eligibility criterion and applicants must show that they have been in contact (unsuccessfully) with their lender as well as got a debt plan from a debt advisor.  There is an application form which, although it is 19 pp long, should not take much to complete.  What really surprised me about the Shelter report is that just five of only 59 applications were approved.  What is going on?  Shelter Cymru suggest the following:

The reality is that ‘Help to Stay’ isn’t a product that can help those facing severe affordability challenges, or those whose circumstances have changed significantly. For households in those situations Shelter Cymru believes a renewed emphasis on mortgage rescue schemes would have greater impact.

But, I’m not sure that can be right.  Shared equity is a way of keeping people in their homes and is a whole lot better than the shared ownership offer of Westminster.  It could offer a solution, and is certainty better than facing a possession claim.  Anyway, there are two key questions: why are people not applying for this scheme? And, why is the success rate for applicants less than 10%?