The penny drops that homes are worth it

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

Look behind the headlines about going back to the 1970s and the shift in the debate on public investment in the opening week of the election campaign could have a huge impact on housing.

On the surface Thursday’s speeches by chancellor Sajid Javid and shadow chancellor John McDonnell are about who will spend more on public services and who will be more responsible on borrowing.

But they are also about a more fundamental change in the fiscal targets and measures that the government sets itself.

Javid has abandoned the government’s previous fiscal rules and loosened his previous target of reducing net debt in favour of one that it should be flat or falling by the end of the next parliament.

By allowing investment in infrastructure of up to 3% of national output, he would create room for an extra £20 bn a year of investment – although he does not appear to see housing as part of his ‘infrastructure revolution’ and ‘decade of renewal’.

McDonnell would go much further by excluding borrowing for investment from his borrowing targets and looking instead for an improvement in the overall government balance sheet by the end of the next parliament.

He plans an extra £50 bn a year of investment via a National Transformation Fund overseen by the Treasury and based in the north of England.

This revolution involves a Green Transformation Fund and a Social Transformation Fund and it definitely does include housing – retrofitting existing homes and building new ones.

For all the political arguments about reckless borrowing and soaring debt, both plans are essentially about raising borrowing to increase investment.

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Year zero for starter homes

Originally posted on November 5 on my blog for Inside Housing.

The sad fate of (non) starter homes offers a lesson for politicians in the folly of making unworkable promises but it is one they seem unlikely ever to learn.

A report published on Tuesday by the National Audit Office (NAO) investigates what happened to one of the flagship promises made by the Conservatives in their 2015 election manifesto: ‘200,000 Starter Homes, which will be sold at a 20% discount and will be built exclusively for first-time buyers under the age of 40’.

Four and a half years later, the total number of completions is precisely zero and the Ministry of Housing Communities and Local Government (MHCLG) has not even laid the regulations in parliament that would enable any starter homes to be built.

So what has happened since the heady days of 2015, when the spending review allocated £2.3 billion to build the first 60,000 starter homes?

The NAO finds that the money was gradually diverted into other schemes to buy and remediate land: a total of around £450m was spent on sites but they ended up being developed for a mix of market sale and affordable homes.

What its report does not reveal is why. This, after all, was one of the key promises made by David Cameron’s Conservatives in 2015.

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The clock is still ticking on Grenfell response

Originally posted on November 1 on my blog for Inside Housing.

For all the admirable clarity in Sir Martin Moore-Bick’s phase one report from the Grenfell Tower inquiry, 28 months on from the fire the official response is still running to catch up.

This week’s leaks and row about the role of the London Fire Brigade (LFB) only serve as reminders of how much else remains to be done.

The other major event of the week ensured that the building safety legislation promised in the Queen’s Speech to implement the Hackitt review will have to wait until after the election.

The same goes for the social housing white paper. It has now at least been promised by the prime minister and housing secretary  but the clock is still ticking on regulation, fighting stigma and all the other fine words in the green paper published 14 months ago.

That too will have to wait until after December 12, probably with yet more new ministers who will need to get up to speed with the issues.

Sir Martin’s phase one report found that the cladding was the ‘primary cause of fire spread’ and the judge ruled that it breached the building regulations.

He had not intended to rule on this point in the first part of the inquiry focussing on what happened on the night of 14 June, 2017. But he says there is ‘compelling evidence’ that the external walls did not meet the requirement in the regulations to ‘adequately resist the spread of fire’ and adds that ‘on the contrary they promoted it’.

This may seem self-evident to anyone who has followed events since the fire but the fact that he has made the judgement clears the way for phase two and moves the inquiry closer to deciding on who was responsible for the actions and inactions that led to it.

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Loans, homes and infrastructure

Originally posted on October 25 on my blog for Inside Housing.

The row over the hike in the interest rate for borrowing from the Public Works Loans Board (PWLB) is important in itself but it also raises a more fundamental point about social housing investment.

The rate increase imposed by the Treasury earlier this month seems to have been sparked by concern about councils investing in shopping centres rather than homes, which is ironic given that their rationale is to find new revenue streams to compensate for Treasury-imposed austerity.

However, it reinforces the impression that the government still does not trust councils to invest wisely in housing or anything else.

That view goes way back to 1979, of course, and the borrowing and spending controls that the Thatcher government imposed on council housing along with the right to buy.

But it also recalls the way that the government finally introduced self-financing in April 2012 but accompanied it with caps on borrowing and then undermined their business plans by imposing the 1% a year rent cut from April 2016.

Now, just at the point when research by Inside Housing reveals that councils are ready to scale up their housebuilding, the beancounters have struck again.

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The housing-shaped hole at the heart of the Queen’s Speech

Originally posted on October 15 on my blog for Inside Housing.

Granted, the Queen’s Speech was more pre-election political broadcast than genuine legislative programme for the year to come but it still sends some worrying signals about  where the government’s priorities lie.

Given Boris Johnson’s Commons majority of -45, Her Majesty’s utterances could be voted down for the first time since 1924 and even if the government somehow stumbles through its own desire for an election only the most uncontroversial bits of it are likely to make any progress.

it’s still good news that the Queen’s Speech proposes building safety standards legislation that would implement the Hackitt review by establishing a new safety framework for high-rise residential buildings.

Although, as Jeremy Corbyn pointed out in his response, progress on blocks with Grenfell-style cladding has been so slow that ‘not a single private block has been made safe under this prime minister’.

While the details of the new system will be debated, few would doubt the central purpose of developing a new system to oversee the whole built environment or the principles of clearer accountability for building owners, designers and constructors, a stronger voice for residents in the system, stronger enforcement and sanctions and a clearer framework for national oversight of construction products.

And if many will doubt that a New Homes Ombudsman will be enough to bring developers into line, the fact that the proposal is tacked on to the new Bill means it can still be improved.

However, with one other small exception, housing was otherwise entirely missing from the Queen’s Speech.

That absence was felt not just in a lack of action on housing and homelessness in general but also in missing specific measures that had been anticipated across different parts of the housing system.

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Temporary costs and permanent solutions

Originally posted on October 14 on my blog for Inside Housing.

As fast as homelessness is rising, the costs of homelessness are rising even faster.

The more that central government claims to be providing extra money, the more local authorities seem to be left to pick up the bill.

Those are the conclusions of two reports over the weekend that highlight the scale of the problems at the sharp end of the housing crisis.

The first comes from analysis for the Local Government Association (LGA) that found that that the number of families in bed and breakfast has risen 187% in less than a decade, from 2,450 in 2008/09 to 7,040 in 2017/18.

Shocking though that is, it’s hardly a big surprise given the impact of austerity and welfare ‘reform’ over the same period.

What’s really shocking is the rise in the cost of keeping them in the worst form of temporary accommodation – an incredible 780% from £10.6m in 2009/10 to £93.3m in 2017/18.

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A great leap backwards

Originally published on October 1 on my blog for Inside Housing.

The first two days of the Conservative Party conference make this look like a government that is scraping the barrel for ideas.

Boris Johnson might still have a surprise in store on Wednesday but speeches by housing secretary Robert Jenrick and housing minister Esther McVey were underwhelming at best while chancellor Sajid Javid did not even mention housing in his check-the-small-print bonanza of infrastructure investment.

Jenrick’s big new idea of a right to shared ownership for housing association tenants is not that big and not that new either but it could still have a damaging impact on people who need an affordable home.

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