The Housing Question
Posted: May 9, 2022 Filed under: Uncategorized Leave a commentIf you follow my blog here, you might be interested in my new newsletter published on Substack.
The Housing Question is a newsletter about housing, but not just housing… politics, social policy, economics, history and anything else that helps makes sense of how we got here.
I’ll still be posting blogs here but mainly as an archive of articles I’ve published elsewhere. The Housing Question will explore issues in more depth, with more of a sideways look and with a bit more context and evolve over time.
You can read the first issue of The Housing Question here and more about the thinking behind it here. If you’d like to subscribe (it’s free for now) go here.
Downturn is a chance for a reset – but will the politicians take it?
Posted: February 27, 2023 Filed under: Affordable housing, Housing market Leave a commentOriginally written as a column for Inside Housing.
Housing market downturns are often dominated by debates about their consequences – whether they be falling house prices and negative equity, arrears and repossessions or builders going bust – and what to do about them.
But an important new report from the Joseph Rowntree Foundation argues that we should be thinking less about house prices and the immediate response to the downturn and more about the housing system as a whole and the long-term opportunities for a reboot.
We are already in a downturn even if the shape of it remains unclear. Toby Lloyd, Rose Grayston and Neal Hudson consider different scenarios ranging from back to normal (rising prices) to an outright crash but think market stagnation is the most likely outcome.
That may sound mild when seen in terms of house prices alone but the consequences would be dire: home ownership would remain inaccessible, driving up private rents and making it even more of a struggle for low-income households to keep a roof over their heads.
Arguably we are already seeing stagnation in housebuildling as the big developers slow down development and the industry as a whole warns that completions could fall to less than half their pre-pandemic peak while blaming government regulations.
The conventional response would be to support supply and boost demand but that would be very much like a rehash of what happened after 2010, when various forms of Help to Buy did increase housebuilding but also produced a boom in housebuilders’ profits, share prices and bonsues without much quid pro quo.
For all the efforts to boost the home ownership chances of first-time buyers, the private rented sector continued to grow. And millions of people in housing need were the losers as austerity put the squeeze on social rent and forced housing associations into affordable rent and market sales.
Read the rest of this entry »How would a robot fix the housing crisis?
Posted: February 16, 2023 Filed under: Affordable housing | Tags: ChatGPT, Housing crisis Leave a commentOriginally written as a column for Inside Housing.
Question: Is there a housing crisis in the UK?
‘Yes, there is a housing crisis in the UK. The housing crisis in the UK is characterized by a shortage of affordable housing, high house prices, and a lack of social housing. This has led to an increase in homelessness and people being unable to afford to buy or rent a home. The crisis is driven by a number of factors including population growth, lack of new home building, and government policies that have favored homeownership over renting.’
As you may have guessed, it wasn’t me that wrote the last paragraph. The clues are, I hope, there in the plodding prose style and the American spellings.
The author was actually ChatGPT, the artificial intelligence chatbot that has workers anxious for their jobs and schools and universities fearing that essays will be written by robots rather than students in future.
The bot goes on: ‘The crisis has been exacerbated by the COVID-19 pandemic, which has led to job losses and economic uncertainty, making it harder for people to afford housing. The situation is particularly dire in London and other major cities, where housing is in high demand and prices are particularly high. The crisis is not only affecting low-income households, but also the middle-class families and young people. This is making it harder for them to access decent and stable housing.’
If that feels a bit out of date (the pandemic has arguably contributed to the opposite problem of labour shortages), it seems a reasonable summary if you accept that longstanding structural issues that we have done next to nothing to address can reasonably be described as a ‘crisis’. ChatGPT does at least get that the problem goes across incomes.
But what would the robot do about this, I wondered.
Read the rest of this entry »Waiting for renter reform
Posted: February 9, 2023 Filed under: Local housing allowance, Private renting, Section 21 Leave a commentOriginally written as a column for Inside Housing.
Take your pick. Section 21, housing benefit, tax, net zero, standards, Covid, the courts, mortgage rates, tenants.
All of them reasons why there will be an exodus of landlords and homes from the private rented sector if you believe what you read in certain newspapers. All of them are one more nail in the coffin of buy to let.
One or more of those reasons will be quoted in every article about landlords selling up but, though there may be an element of truth to some of them, few will stop to point out that the party lasted for years. I don’t remember many landlords cutting their rents when mortgage rates fell to record lows after 2009 or complaining about the capital gains they’ve made since.
What matters, as MPs on the all-party Levelling Up, Housing and Communities Committee points out in a report published today [Thursday] is who buys the homes that landlords are selling.
Properties sold to another private landlord, or perhaps to a local authority or social landlord, are still available for rent. Those sold into owner-occupation will reduce demand for rentals if the new owner was previously a renter.
The really damaging destination is when homes for rent are sold, or converted, into short-term holiday lets and that means that the Westminster government must go further than tentative plans for registration.
That’s a powerful reminder that reforming the private rented sector is about much more than ‘greedy landlords’ or a ‘war on buy to let’ and that any new system has to balance different interests and demand from different groups for decent homes to rent.
Read the rest of this entry »Gove’s admission begs more questions
Posted: January 30, 2023 Filed under: Fire safety, Leasehold, Planning, Private renting Leave a commentOriginally written as a column for Inside Housing.
Michael Gove’s admission that ‘faulty and ambiguous’ building regulations set by central government were partly to blame for the Grenfell Tower fire will come as no surprise to anyone who has taken even passing notice of the evidence at the public inquiry.
That a statement so blindingly obvious should be enough to prompt a worried look from one of the levelling up secretary’s media minders speaks volumes about the government’s stance up to now. It also begs significant questions about the administration’s approach to housing going forward.
The admission (and the look) came in an interview with the Sunday Times trailing the announcement on Monday that developers have six weeks to sign legally binding contracts to repair unsafe buildings or, in effect, lose the ability to build anything else.
As the levelling up secretary told Sophy Ridge on Sunday on Sky News: ‘The people who were responsible for erecting buildings which we now know are unsafe have to pay the costs of making sure those buildings are safe.’
Except that making UK-registered developers liable for fixing the blocks they built themselves via the contracts but for paying to fix other buildings via the Building Safety Levy does not really capture all of those responsible.
As the inquiry has revealed, that list includes just about every part of the construction industry, and especially product manufacturers. Mr Gove’s written statement on Monday does say that contractors and manufacturers are among those whose conduct is being investigated by his department’s Recovery Strategy Unit.
The list now also includes a government that Mr Gove says ‘collectively has to take some responsibility’ (meaning current and previous governments).
Read the rest of this entry »Four decades of failure
Posted: January 19, 2023 Filed under: Housing benefit, Rent control, Social housing Leave a commentOriginally written as a column for Inside Housing.
Why has housing become so unaffordable over the last 40 years?
The answer, according to new report for the Joseph Rowntree Foundation (JRF), is cuts in housing subsidy that represent ‘a massive shift in who pays market housing costs, from government and landlords onto tenant’ since 1979.
It’s the scale of the shift, rather than the shift itself, that is striking.
Back at the start of Margaret Thatcher’s first term, social and private renters alike were paying around 10 per cent of their incomes on rent. By 2020 that had risen to 25 per cent for social renters and 30 per cent for private renters.
The shift is represented in a graph that Ian Mulheirn, who co-authored the report with colleagues James Browne and Christos Tsoukalis from the Tony Blair Institute for Global Change, calls ‘one of the most striking’ in public policy:
They calculate that if housing subsidies had been maintained at 1979 levels as a share of total housing costs they would have been worth £45 billion 2019/20 rather than the actual £31 billion.
This ‘generational housing costs squeeze’ is the result of massive change in three elements of housing subsidy: social housing; housing benefit; and rent controls.
That is the result of the accumulation of many different policies over time: cuts in investment in council housing and higher council rents; private finance and higher housing association rents; the deregulation of the private rented sector; and rapid increases in housing benefit to ‘take the strain’ of all that followed by the cuts imposed under austerity.
Read the rest of this entry »Building a better future or surrendering to the past?
Posted: January 10, 2023 Filed under: Housebuilding, Planning Leave a commentOriginally written as a column for Inside Housing.
So now we know what the ‘people’s priorities’ are – and housing is not one of them.
The fact that housing did not feature in the speech from Rishi Sunak setting out his agenda for the new year is not a surprise in itself – his five pledges all covered issues with far greater political saliency.
But it is still surprising that in a speech on ‘building a better future’ he did not mention housing at all and that, apart from a boast about stabilising mortgage rates, the speech steered clear of traditional Tory territory on home ownership.
He did talk about community (‘a better future also means reinforcing people’s pride in the places they call home’) and making places better (‘I love my local community and it’s not right that too many for far too long have not felt that same sense of meaning and belonging’).
But he is talking here about people who already have places they can call home and avoids any mention of those who do not have a home or need a new or more affordable one.
And that is no coincidence because he was speaking in the wake of the government’s surrender late last year to its own backbenchers on planning and housebuilding.
Read the rest of this entry »The levelling up of housing targets
Posted: December 6, 2022 Filed under: Housebuilding, Planning | Tags: Michael Gove, Theresa Villiers Leave a commentOriginally published as a column for Inside Housing.
There is no chance of the government achieving its target of 300,000 new homes by the mid-2020s so why has the drama ramped up within the Conservative Party?
The answer is, of course, politics but it is coming from two different directions and there is a long history that lies behind it.
The inclusion of the target in the 2019 manifesto was all about having something to say to younger voters excluded from homeownership.
Note that the commitment is actually to a more weasly ‘progress towards’ 300,000, alongside a promise of ‘at least a million homes’ in this parliament, although both are important in focusing minds within government.
The latter target – effectively 200,000 a year – should be comfortably achieved, not least because it already happened in the last parliament.
Figures published last month showed that 232,820 net additional homes were delivered in 2021-22, a 10% increase on COVID-affected 2020-21 and not far off the pre-pandemic peak.
House builder after house builder has reported falling sales recently, so the total should fall this year regardless of anything MPs decide about planning.
Which is where the other direction comes in: the politics of appealing to well-housed, mostly older voters in affluent Conservative constituencies in the South East from MPs who fear a multiple repeat of the Tory defeat in the Chesham and Amersham by-election at the next general election.
Read the rest of this entry »Taxing questions
Posted: November 10, 2022 Filed under: Home ownership, Land, Stamp duty, Tax Leave a commentOriginally written as a column for Inside Housing.
Around £50 billion worth of austerity looks inevitable in next week’s Autumn Statement but it remains to be seen how chancellor Jeremy Hunt will strike the balance between spending cuts and tax rises.
Even if recent reports that suggest he will increase benefits and pensions in line with prices prove to be correct, there are still big questions over local housing allowance (still frozen despite rising rents) and the benefit cap (which will catch thousands more tenants if the thresholds stay frozen) and housing budgets already eroded by inflation look vulnerable to cuts in capital spending.
On tax, the stamp duty cut was one of the few measures proposed in the mini-Budget in September that has survived the demise of Liz Truss and Kwasi Kwarteng. So far at least.
But there has been very little debate about where the tax burden should really fall, and in particular about the balance between taxes on income and taxes on wealth.
Read the rest of this entry »
Jules Birch 