The fall guys – Part Two

Originally posted on July 28 on Inside Edge 2, my blog for Inside Housing

So does it really cost housing associations £150,000 to build what housebuilders can deliver for £90,000?

The first part of this blog examined last week’s Channel 4 News reportclaiming that: ‘Government plans to build more affordable homes are being frustrated by the poor performance of housing associations.’ I concluded that it made some legitimate points, especially on executive pay, but otherwise did not stand up to serious scrutiny.

This second part of the blog is devoted to what I think was the most serious charge:

‘According to private housebuilders, the cost of delivering a house is £90,000 but when you ask housing associations they say they have to spend £150,000 to deliver a home. Now they’ll tell you that the homes are better but is it justified that they build only two-thirds of what private housebuilders do with the same amount of money.’

This is the key fact (or factoid) in the report. It would not be a complete surprise if private housebuilders could deliver homes a bit cheaper than housing associations. They build in bigger volumes. Building homes and trading in land is what they do and they are not distracted by other considerations such as managing homes for tenants. And, as the report pointed out, housing association homes may also be bigger or built to a higher standard. Against that, housebuilders carry more risk and so take higher profit margins than the contractors who build homes for associations.

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Shifting sands

Originally posted on July 23 on Inside Edge 2, my blog for Inside Housing

A new report aims to maximise Section 106 contributions to affordable housing but the government seems intent on moving in the opposite direction.

Rethinking Planning Obligations is the result of research for the Joseph Rowntree Foundation by a team from Oxford Brookes University and the University of East London. It notes a sharp fall in the contribution from Section 106 since the credit crunch: from 32,000 in 2006/07 (65% of all affordable homes) to 16,000 in 2012/13 (still significant but only 37% of the total). Contributions to affordable housing varied across case study areas from 2% to 87%.

The decline is partly the result of the housing market downturn: planning permissions agreed before 2007 with high proportions of affordable housing were not viable after the crunch and had to be renegotiated.

However, the government has also introduced a series of changes that make it easier for developers to argue down their contribution, and secretive viability assessments have become a key weapon. For detailed examples of how it works, see Oliver Wainwright’s story about Neo Bankside in The Guardian this week or The Bureau of Investigative Journalism’s story from May about Greenwich Peninsula.

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If at first you don’t succeed

Originally posted on July 13 on Inside Edge 2, my blog for Inside Housing

It may have important new provisions on housing and planning but the name of the government’s new productivity strategy rather gives the game away.

Described as ‘the second half of the Budget’, Fixing the Foundations was published by the Department for Business Innovation and Skills but includes chapters on housing and planning and welfare that amplify decisions taken in the first half.

But does the name remind you of anything? Go back four years and David Cameron himself was launching a ‘radical and unashamedly ambitious’ housing strategy. The title? Laying the Foundations.

Once they’ve stopped sucking air through their teeth, any builder will tell you that once you’ve laid the foundations and built on top of them, it’s enormously expensive to start to fix them. It’s also a pretty good indication that the foundations were pretty rocky to begin with.

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Enemies of the state

Originally posted on July 5 on Inside Edge 2, my blog for Inside Housing

Bring it on. We are determined take you on. Who do David Cameron and George Osborne have in mind?

If you haven’t seen it yet, you need to read their op-ed in Saturday’s Times on ‘Here’s how to build a homeowning Britain’. They mean England of course. You can read extracts on the Number 10 website but that only gives a flavour of the full article so I’ve posted it here.

Ahead of the Budget, they promise that ‘a shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder’. It is not just an explicitly, distinctively Conservative vision for housing but also a declaration of war against anyone opposed to that vision. Here’s my take on the key points:

‘Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.

‘It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.’

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‘Here’s how to build a home owning Britain’

Here is the full text of the belligerent op-ed on housing by David Cameron and George Osborne in Saturday’s Times. My post on the implications is here.

Here’s how to build a home owning Britain

David Cameron and George Osborne

A shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder

At a time of uncertainty abroad, here at home we will be delivering a budget next week with economic stability at its heart, offering security for working people.

Encouraging home ownership is central to that. Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.

It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.
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Blue skies: Part two

Is One Nation Conservatism anything more than PR puff? The conclusion of my blog sets out 12 tests of what it could and should mean in housing.

In the wake of the unexpected election result influential voices within the Conservative Party talked about the need for a new appeal to the aspirational working classes. Whether it’s called Blue Collar or One Nation Conservatism, the idea is to shake off the negativity of the nasty party, steal Labour’s clothes and lock in another majority for 2020.

Part one of this blog featured calls by people like Tim Montgomerie, David Green, Nick de Bois and Christian Guy not just for a radical new approach to housebuilding to spread the benefits of home ownership but also a new approach to housing to meet the needs of renters. Guy called housing ‘one of the social justice issues of our time’. There was more of this over the weekend, with Chris Walker of Policy Exchange calling housing ‘key to a Conservative vision for working people’.

But what does all this Tory philosophising amount to? The desire to appeal to aspirational workers (and for power in 2020) is certainly genuine enough but is the party really ready for its implications? The suspicion remains that this is as much about redefining the meaning of ‘One Nation’ as it is about changing course: one nation for those able to Work Hard and Do the Right Thing that looks the other way when it comes to those who cannot and ignores the fact that many of them will still not be able to pay their rent.

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Good start

Today’s housebuilding figures for England are the best since before the election of the coalition in March 2010.

While it’s always unwise to rely on one quarter’s figures, for once it seems hard to quibble with the positive spin put on them by Brandon Lewis. The housing minister was at best creative in his use of stats before the election as good news on starts was matched by bad on completions and vice-versa. However, these particular figures, which still cover the period under the coalition, seem to spin themselves.

For the first time since the end of 2007, the January to March 2015 quarter saw more than 40,000 starts. The total was up 31 per cent on the previous quarter and 11 per cent on a year earlier and the private sector, housing associations and local authorities all recorded increase.

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