The legacy of the 1988 Housing Act 30 years on

This week marks the 30th anniversary of Royal Assent for the Act that set the framework for the housing system as we have known it ever since – but as its influence wanes is it going into reverse?

The 1988 Housing Act led to lasting change in social and private rented housing. Not everything happened at once – some provisions were amended in later legislation and some took time to have an effect – but this was what set the basic ground rules for what followed.

In the social rented sector, it meant private finance, higher rents, stock transfer and housing associations replacing local authorities as the main providers. In the private rented sector, it meant the end of security of tenure and regulated rents and the arrival of assured shortholds and Section 21.

But it also created a system that was full of contradictions that are now only too clear. The stage was set for the revival of rentier landlordism but also the eventual decline of home ownership, the fall of municipal empires but the rise of mega housing associations and a belief that housing benefit could ‘take the strain’ of higher rents that always seemed unlikely and drained away with austerity.

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What’s in the Budget small print?

Originally published on November 30 on my blog for Inside Housing. 

If you listened to the chancellor’s speech you may have thought this was a Budget that did not mean much for housing. As ever you may think again after reading the small print.

As I live blogged for Inside Housing yesterday, the big news in the speech was the extra money for universal credit that makes up for many of the cuts imposed in universal credit and delays the roll-out yet again and sounds like it will be enough to avoid a backbench Tory rebellion.

Elsewhere, Philip Hammond found £2.8 bn to bring forward cuts in income tax allowances by a year but he failed to find roughly half that to scrap the final year of the freeze in most working age benefits including the local housing allowance.

This was a clear political choice to go for tax cuts that overwhelmingly benefit the better-off over benefits that go to the poorest households.

Ahead of the next spending review, numbers crunched by the Resolution Foundation overnight suggest that the squeeze on everything apart from health will continue well into the 2020s.

However, the most interesting developments for housing came in the background documents published as Mr Hammond sat down.

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Six things to look out for in the Budget

Originally published on October 26 on my blog for Inside Housing. 

What might have been the Budget’s headline announcements on housing were made by the prime minister last month at the National Housing Summit and Conservative Party conference.

But the chancellor’s big moment will still set the context for the end of the borrowing cap for council housing from next week that ‘extra’ £2 bn for housing associations in the 2020s.

And it will also reveal the total spending envelope for the 2019 Spending Review, teeing up a race to calculate whether austerity really is as ‘over’ as Theresa May promised.

With Brexit and the NHS to pay for and crises in local government and social care as well as in housing that could be a tall order.

In the meantime, here are six areas to look out for on Monday.

  • The borrowing cap

When the prime minister made her surprise announcement, the concern was that it would come with strings attached when the detail was revealed in the Budget.

That could still happen but one big fear – a long delay before implementation – has already been allayed by last week’s announcement by housing secretary James Brokenshire that the cap will be lifted from Tuesday.

However, the impact of the rent cut, the Right to Buy and welfare reform still loom large and are seen as more important than the borrowing cap by some councils.

And the suspicion remains that the Treasury is not exactly enthusiastic about a move that will increase public borrowing under current rules.

In which case, as John Perry argues, why not bring the UK into line with other countries and give council housing the same financial independence as housing associations?

And why not, as the Local Government Association (LGA) argues in its Budget submission, allow councils to reinvest 100% of Right to Buy receipts and decide discounts locally?

To signal their intent, more than 60 council leaders have signed an open letter pledging an immediate drive to build more homes. Read the rest of this entry »


Squaring the circle of regeneration

Originally posted on my blog for Inside Housing on October 22.

When England’s most high-profile local authority calls the behaviour of the country’s largest housing association ‘morally wrong’ you sit up and take notice.

Clashes between the local priorities of a council and the organisational ones of an association are nothing new of course but this week’s statement by the Royal Borough of Kensington and Chelsea (RBKC) seems different.

Clarion is in its sights over rejected proposals for the regeneration of the Sutton Estate in Chelsea.

Council leader Kim Taylor-Smith told a council meeting last week:

‘HAs in the borough are, in some cases turning away from their core purpose and in some cases becoming all but private developers.

‘You will all know I am talking about Clarion Housing, the owners of my local and cherished Sutton Estate which they wish to knock down the estate with a loss of affordable homes We stand shoulder to shoulder with local residents in opposing this

‘I think we all in the chamber are untied. This is wrong.’

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Turning tenants into owners

Originally posted on October 11 on my blog for Inside Housing. 

For all the government’s new-found enthusiasm for social housing and local authorities, the politics of the housing crisis are still fundamentally about home ownership.

Anyone pleasantly surprised by the change of tune in the green paper will still have found two particularly discordant notes: the convictions that welfare reform is ‘empowering tenants as consumers’ and that social housing should be a ‘springboard to home ownership’.

Housing may have been the dominant issue at fringe meetings at the Conservative party conference but two reports out this week highlight the fact that the frustrated aspirations of young private renters are still the dominant concern.

The new Tory think-tank Onward brought forward publication of a proposal for new tax incentives for landlords to sell to long-term tenants following reports over the weekend that the government is considering it as a new form of Help to Buy.

And a report by the Institute for Fiscal Studies put the problem of frustrated ownership into perspective.

Over the last 20 years owner-occupation among the 25-34s has fallen from 55% to 35%. Their incomes are up by 19% in real terms but rents have risen 38% and house prices 173%.

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Scrapping the borrowing cap

Originally posted on October 3 on my blog for Inside Housing.

After Theresa May’s warm words for housing associations, the big question was why she could not offer something similar for council housing.

She answered it today with the surprise announcement at the end of her Conservative conference speech that the borrowing cap will be scrapped.

Vital details remain to be seen. When and how the cap will be lifted? What’s in the small print? What strings will be attached to the deal?

However, the move deserves the warm initial welcome it has already received from organisations across local government and housing.

The surprise reflects what was assumed to be entrenched Treasury resistance to lifting the cap, despite years of patient advocacy from campaigners, commitment from Labour and outspoken support from the Conservative chair of the Local Government Association, Lord Porter.

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Planning, profits and public land

Originally posted on my blog for Inside Housing on September 24. 

While all eyes were on the prime minister’s speech at the National Housing Summit you may have missed news that landowners are now making an astonishing £13 bn a year pre-tax profit just from getting planning permission for housing.

That is the estimate in a new report from the Centre for Progressive Policy (CPP) and the National Housing Federation (NHF) published on the same day as Theresa May was telling housing associations what they wanted to hear.

The £13 bn profit made by landowners in England in 2016/17 is up £4 bn on 2014/15 thanks to a huge increase in residential land values in the last two years.

Seen from one end of the telescope, that was already more than the profits of the entire UK housebuilding industry and it is now more than the global profits of Amazon, Coca Cola and McDonald’s combined.

But the impact can also be seen from the other end of the telescope, with housing association after housing association quoting examples of where they have been outbid by private developers for land.

The sites are often public land but individual associations report examples of developers who bid a higher price than them only to do nothing with it or sell it on for a profit shortly afterwards.

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