Where the money really goes in housing

Three comparisons leap out from the latest edition of the indispensable UK Housing Review published on Wednesday.

The first two are not new in themselves and the third is only a crude estimate but all three need repeating again and again for a real appreciation of where spending on housing goes and exactly who is subsidising who.

First comes the main one highlighted by the Chartered Institute of Housing (CIH): the shift from bricks and mortar to personal subsidies, or from grants for new homes and repairs to old ones to housing benefit.

This series of pie charts from the Review shows the change over the last 40 years and the total amount of housing subsidies in real terms:

Chapters tables charts 2018

Note first that supply subsidies have sunk to just 4.3 per cent of the total pie – this despite all the cuts in housing benefit seen since 2010 and the fact that the figures to not include continuing tax reliefs for home owners (see below for more on that).

Second, note that this does not save money. Total subsidies are now 48 per cent higher in real terms than at the turn of the century (when admittedly social housing investment was very low) but they are also approaching the levels of 30 years ago (when investment was significantly higher and the unemployment rate was three times what it is now).

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Will Letwin be worth the wait?

Originally published on March 13 on my blog for Inside Housing.

So, with unintentional irony, the inquiry into why it takes so long to get new homes built is itself taking longer than expected.

For all the advance speculation and ministerial statements in the last few days, the Letwin Review of build-out rates was not published alongside today’s Spring Statement.

Instead the former Conservative Cabinet minister published a four-page letter offering housing secretary Sajid Javid an interim update on the work of the inquiry focusing on what is happening on large sites operated by large housebuilders.

A ‘draft analysis’ will follow by the end of June offering a description of the problem and its causes but final recommendations will only be made in time for the Budget in November.

In truth, expectations that Letwin would be able to offer instant solutions within a few months were always likely to be dashed – not that this stopped ministers from pre-emoting it with warnings to housebuilders to ‘do their duty’ in the planning announcements last week.

Perhaps significantly, the draft update has only one mention of the supposedly crucial issue of ‘land banks’, the nefarious practice by which housebuilders allegedly hoard land with planning permission until they can make the most money.

However, Letwin rejects most of their usual excuses too – everything from shortages of labour, materials and capital to problems with transport infrastructure, utility connections and constrained logistics on site.

He argues instead that the ‘fundamental driver of build out rates once detailed planning permission is granted for large sites appears to be the “absorption rate”.’

This is ‘the rate at which newly constructed homes can be sold into (or are believed to be sold successfully into) the local market without materially disturbing the market price’.

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Steps in the right direction that don’t go far enough

Originally published on my blog for Inside Housing on March 5.

Theresa May is a politician with a gift for saying the right things but somehow in the wrong way.

I’m thinking here not just of the obvious examples such as the ‘nothing had changed during the election campaign’ and the collapsing lettering of ‘Building a Britain that Works for Everyone’ during her Conservative conference speech last year. She does it even when she is most in control of what she is saying.

She did it in her first speech as prime minister when she dedicated herself to tackling ‘burning injustices’ but only succeeded in drawing attention to the fact they were the legacy of the previous six years of Conservative rule.

She did it on Friday when her big speech on Brexit rightly pointed out that ‘we can’t have everything’ only to prompt a German journalist to ask ‘is it all worth it?’.

And she did it again in her speech on Monday launching the new version of the National Planning Policy Framework.

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A benefit to society

News that 90% of social housing tenants feel that the media presents stereotypes of them is depressing but sadly not surprising.

As a report launched at the House of Commons today by the Benefit to Society campaign argues, the negative views are embedded in whole swathes of TVprogramming that links housing tenure to benefits status.

But it’s not just about poverty porn like Benefits Street and Council House Crackdown and tabloid headlines about scroungers and large families.

More thoughtful programmes like How to get a Council House can mine the same themes and generate the same hostility.

And even supposedly objective TV and broadsheet news coverage can strengthen the stereotypes by resorting to the lazy clichés of ‘sink’ and ‘crumbling’ estates and using stock pictures and idents of tower blocks and abandoned shopping trolleys.

So it is good to see that my union, the National Union of Journalists, is backing the Fair Press for Tenants guide aimed at journalists, PR people and documentary makers.

And the level of media interest in today’s launch and opinion poll also bodes well and is a chance to combat the stereotypes and change a few opinions.

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Scotland shows the way on affordable housing

First posted as a blog for Inside Housing on February 27. 

News that Scotland is on track to deliver its ambitious plans for affordable homes is great news in itself but it also shows those further south what can be achieved when a government and the housing sector are determined enough.

The Scottish Government has promised 50,000 affordable homes, of which 35,000 will be for social rent, between April 2016 and March 2021. This is the largest programme of its kind since the 1970s.

And an independent analysis of local authorities’ Strategic Housing Investment Plans (SHIPs) published on Monday find that Scotland should deliver between 45,000 and 50,000 affordable homes and up to 34,850 for social rent.

That’s impressive enough but even more so when you consider it in the context of what’s happening (or not) further south.

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Age, class and home ownership

Originally published on my blog for Inside Housing on February 16.

Housing is so often presented as a story of inequality between the generations but what about inequality within generations?

Analysis published on Friday by the Institute for Fiscal Studies confirms the familiar story of the collapse of home ownership among younger people that has been accompanied by a surge in private renting and adults still living with their parents into their late 20s and early 30s.

The IFS briefing concentrates on people aged 25-34, exactly the age group who could once have been expecting to take their first step on to the housing ladder.

The collapse has obviously been biggest in London but home ownership rates have fallen even in the cheapest regions like the North East and Cumbria.

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Is housing more politically important than the NHS?

Originally posted for Inside Housing on February 13.

When you’re used to seeing things up close sometimes it makes sense to take a step back and look at the bigger picture.

Just such a macro look at housing comes in the latest episode of one of my favourite podcasts.

This week’s episode of Talking Politics is about what it calls ‘the fundamentals’, the factors that influence the politics of voters’ everyday that seem to outside the control of the politicians

The discussion starts with two propositions that are startling not just in themselves but also because they come from Cambridge academics who are more used to talking about Brexit and Trump than housing affordability and housebuilding.

The first is that housing is more politically important to the government than the NHS. Following on from that, the second is that if Jeremy Corbyn wins the next election housing will be the main reason why.

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