JAMs and NOMADs

Originally published on November 23 on my blog for Inside Housing

Wednesday’s Autumn Statement by Philip Hammond is good news for housing on several different fronts.

First, at long last housing is being recognised as infrastructure. That’s important enough in itself but Mr Hammond went even further by pitching housing as part of the solution to the key economic problem of productivity.

Along with transport, digital communications and research and development, housing will be part of the chancellor’s £23bn National Productivity Investment Fund. In financial terms, accelerated construction, affordable housing and the new Housing Infrastructure Fund represent a third of the total cost.

Mr Hammond also named “the housing challenge” alongside the productivity gap and the imbalance in prosperity across the country as one of the economy’s long-term weaknesses.

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Hitting the target?

Originally published on November 15 on my blog for Inside Housing

On the basis of figures released today, the government is much more likely to achieve its ambition of a million new homes in this parliament than many people realise.

Total net additional housing supply was 189,950 homes in 2015/16. That means that in the first year of the five covered by the target, output was just 10,000 short of the 200,000 a year required.

As the graph shows, that total is the highest achieved since the peak of 2007/08, the last year before the impact of the financial crisis was felt. It’s also the fourth-largest annual output since this series was first published for 1991/92.

netsupply

This level of output will come as a surprise to those relying on quarterly housebuilding statistics that show 139,880 new homes completed in 2015/16, well short of what’s needed.

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Book review: The Financialization of Housing

The Global Financial Crisis was a wake-up call to the world about the dangers posed by a toxic mix of finance and housing, one that has still not been properly heeded.

The mortgage-backed securities, collaterialised debt obligations and other financial instruments that financed the expansion of sub-prime and predatory lending were the result of a wave of innovation by a finance industry that had been deregulated over the previous 20 years. Britain marked the 30th anniversary of the Big Bang in the City last month but similar things happened around the developed world.

All that innovation and securitisation led to exponential increases in the amount of credit circulating within the financial system but it still needed something to be secured against. Which is where housing came in: a mortgage finance system that had been based on long-term mortgage lending funded from savings was transformed into a vehicle for the expansion of credit. And the relationship between the price of homes and the earnings of people buying them was also transformed.

9781138950580

The Financializaton of Housing: A Political Economy Approach, a new book by Manuel Aalbers, is the most comprehensive attempt I’ve seen to outline this process and its consequences. It’s part of a multinational research project based at the University of Leuven in Belgium on what he calls the Real Estate/Financial Complex in 12 different countries around the world. The metaphor is a deliberate echo of the military/industrial complex and serves to emphasise the connections not just between the real estate and financial sectors but also between each of them and the state.

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Manifestly without reason

Originally published on November 8 on my blog for Inside Housing

On a day when it was badly needed the judges of the Supreme Court obliged with some good news.

Yes, it was mixed with bad news in the judgement on the bedroom tax, as two claimants won their case and others were refused, but it was still a welcome vindication of the case put forward by the Carmichaels, the Rutherfords and their lawyers. In the words of the judgement, the decisions on their housing benefit were ‘manifestly without reason’.

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Manifestly without details

Originally published on November 8 on my blog for Inside Housing

There are no guarantees but the penny has dropped at the DCLG that policies that were written on the back of a fag packet need lots more work. Six months after the Housing and Planning Act received Royal Assent, we are still waiting for the key details. Could it be that the new ministers have realised that some of what their predecessors did was manifestly without reason too?

Things are not remotely clear with the Housing and Planning Act but perhaps the fact that I’m even able to write that six months after it became law is good news of a sort. It remains to be seen how much will be changed or watered down but the new ministerial team at the DCLG clearly do not share the gung-ho assumptions of their predecessors and the government as a whole has bigger things on its mind. Watch the first five minutes or so of yesterday’s session at the Communities and Local Government Committee to see what I mean.

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Cutting the cap

Originally published on November 1 on my blog for Inside Housing

You might think a policy that threatens more than 300,000 children with destitution and homelessness would be attracting more attention.

The reduction in the overall benefit cap starts in just six days’ time (Monday November 7) and will be introduced in different areas over the next few weeks. It is the first of a series of crucial events for housing this month that I blogged about yesterday. But only now is it getting much attention in the national media. That’s partly thanks to new analysis by the Chartered Institute of Housing (CIH), which suggests that 116,000 families will be affected and a total of 319,000 children.

The cap is being reduced from £26,000 a year to £23,000 in London and £20,000 elsewhere (lower limits apply to single people with no children). The cap essentially works via housing benefit. The more children people have, the higher their non-housing benefits will be and the more their housing benefit will be cut. At the levels of the lower cap, widespread rent shortfalls are inevitable unless people qualify for one of the exemptions or a discretionary housing payment (DHP) from their local authority.

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The ides of November

Originally posted on October 31 on my blog for Inside Housing

The last four months have seemed to offer a series of new possibilities for housing from Theresa May’s new government. From the prime minister’s rhetoric about ‘a country that works for everyone’ to housing minister Gavin Barwell’s emphasis on the importance of all tenures, the signals have been pointing to a significant shift away from the stance of the previous Tory administration. Friday brought good news when the Homelessness Reduction Bill won a second reading with the support of the government.

But events in the next month or so will go a long way to determining where those signals are really leading us. For all the rhetoric we don’t know much more detail than when the government went back to work at the beginning of September. While the dates of some events are already set, others are expected “shortly”. Here’s a selected list:

November 7

A week today sees the start of the reduction in the overall household benefit cap from £26,000 to £23,000 in London and £20,000 elsewhere.

An updated impact assessment published in August estimates that 88,000 households (107,000 adults and 244,000 children) will be affected by the lower cap, including 64,000 who would not have been covered by the original cap.

That is much less than in the original impact assessment, one reason being that the government has introduced new exemptions for guardians and carers in response to defeat in the courts. It also seems on the low side given that it means housing benefit will not cover the rent for families in more expensive areas and with higher rents and for larger families everywhere, even in social housing. And it will only encourage more landlords to restrict their lettings of ‘affordable’ homes to ‘working families’.

To borrow a line from Steve Hilditch, if October ended with the Homelessness Reduction Bill’s second reading, then November will kick off what can only be a homelessness expansion policy.

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