Blind spot

Fiscal myopia: that’s the telling phrase in a report out this week on the long-term value of social housing.

In a way the verdict of Capital Economics merely confirms what we know intuitively: building social housing at low rents costs much less in the long run than not building it and instead subsidising high rents through housing benefit.

But the report for SHOUT and the National Federation of ALMOs demonstrates just how good long-term deal social housing represents. Capital Economics compared a programme building up to 100,000 social rented homes a year from 2020/21 with existing policies. Among the conclusions:

  • Looking over 25 years, lower housing benefit costs alone justify government investment in social housing in most parts of the country.
  • However, that takes no account of the value of the asset created that remains after 25 years. Once this is done, investment stacks up in most of the rest
  • In a handful of cases where the sums do not add up (mostly larger homes in areas where private rents are the same or lower than social rents) there are still good arguments for investment (urban regeneration, positive impacts on health and education etc).
  • Tenants will also be better off: the report estimates that families would see their net incomes after housing costs rise by £942 a year.

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The B word

Here’s a number that should embolden whoever wins the election: 54% of voters support government borrowing to fund more affordable homes.

A MORI opinion poll for the Chartered Institute of Housing (CIH) found that just 21% would oppose borrowing to fund affordable housing for sale or rent and 24% neither support not oppose it. Support was unsurprisingly strongest among renters (60 per cent) and Londoners (66 per cent).

The results are in line with a series of other recent polls showing a significant shift in public attitudes to housebuilding. However, the election campaign seems so fixed that it’s difficult to imagine any of the major parties trying to win majority support by advocating a policy that actually has it. It would simply play into the Conservative narrative that it was not the banks but the last Labour government that caused the economic crisis by borrowing too much.

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The return of rent control?

An idea that was supposedly buried a generation ago is rising rapidly up the housing policy agenda.

Last year saw modest proposals by Labour for rent regulation within three-year tenancies in the private rented sector. Now there are calls for something that goes much further.

The conjunction of two news items last Friday put the issue into sharp relief. The first was an opinion poll for the private tenants campaign Generation Rent that asked ‘would you support or oppose proposals for the government to introduce a “rent control” system in the UK’. The result was 59 per cent to support, 6.8 per cent to oppose and 34 per cent with no opinion. Levels of support rose to 77 per cent among private renters, 69 per cent of Labour voters and 64.5 per cent of Londoners. However, rent control also had the support of a majority of Conservatives (55 per cent) and homeowners (56 per cent).

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Housing: where’s the plan?

A new book by the economist whose work first established the 250,000 homes a year benchmark has to be worth reading – especially when she’s not convinced it’s possible anymore.

Kate Barker’s seminal report on housing for the Blair government nailed the idea that the UK and especially England need to build houses at a much faster rate. A decade, and a separate study of planning, later and it still the ultimate source for targets of 200,000, 250,000 and even 300,000 homes a year to cope with demand and make up for the shortfall.

Now she’s back with Housing: Where’s the Plan, a short book setting out the housing challenge and potential solutions to it. With the new homes deficit rising by the year, she starts with a sober assessment of the possibilities.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Brave new world

Guess what the total value of government financial instruments to support new homes will be by 2021.

The answer that leapt off the page at me in a report on the department’s performance published by the National Audit Office (NAO) last week is a cool £24 billion. And that is just the direct support that comes under the DCLG and its agencies.

Perhaps the figure should not come as a surprise. After all, ever since the financial crisis we’ve grown used to the government adopting new ways of financing things that do not rely on conventional spending or borrowing.

The three programmes that make up the £24 billion are £10 billion for financial guarantees to housing associations and the private rented sector to help build new homes, £9.7 billion for the Help to Buy equity loan scheme (HTB1) and £4.2 billion for other loans and investments such as Build to Rent and the large sites scheme.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Making the case

Why do we need social housing? The answer may seem obvious on this website but too often elsewhere the one you’ll get is ‘we don’t’.

It’s a theme I’ve blogged about repeatedly over the last few years as social housing has been eroded from within and overtaken from without by the relentless rise of private renting. As coalition ministers never cease to remind us, the sector shrank by 420,000 in England under the last Labour government, but their own policies are merely accelerating the decline while they blur the distinction between affordable and social.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Budget 2014: the next five years

Never mind today and tomorrow: what does the Budget mean for housing over the longer term?

As usual, some of the most revealing information comes not in the speech or the Treasury’s background documents but in the Economic and Fiscal Outlook published by the Office for Budget Responsibility. This time around the detail and the forecasts for the next five years have a lot to say about housing benefit, the welfare cap and the housing market.

Read the rest of this post on Inside Edge, my blog for Inside Housing


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