Housing in the Labour manifesto

Originally posted on May 16 on my blog for Inside Housing. 

Anyone caught up in the narrative about Labour’s radical manifesto will be left disappointed and a little bit puzzled by the party’s proposals on housing.

They will not be surprised given last week’s leak of the draft but they will find a sensible and pragmatic set of policies that move closer to what is desperately needed to tackle the housing crisis and are actually open to criticism for being too timid.

To give one example, the 2017 manifesto is routinely compared in the media to 1983’s ‘longest suicide note in history’.

But where Michael Foot’s Labour proposed a publicly-owned housebuilder and nationalisation of key parts of the building materials industry, Jeremy Corbyn’s party wants to extend Help to Buy for another seven years.

The equity loan part of the scheme is currently due to end in 2020 but Labour would guarantee funding until 2027 ‘to give long-term certainty to both first-time buyers and the housebuilding industry’.

That goes well beyond necessary action to avoid a cliff edge and abrupt fall in output after 2020.

It should be cause for celebration in the boardrooms of the big housebuilders because Help to Buy would continue to underpin their completions, profit margins, dividends and share options.

Or at least it might be if housebuilder executives were not also going to be hit personally by tax increases on higher earners and corporately by an excessive pay levy on employees paid over £500,000 a year.

But it’s still a surprising move from Labour. As Theresa May found out yesterday, Help to Buy is by no means universally popular and critics argue that too many of the benefits go to the big firms, their shareholders and people who can afford to buy anyway.

Whether you agree or disagree with it, extending Help to Buy until 2027 is evidence that on housing Labour’s approach would be pragmatic rather than ideological.

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Theresa May’s social housing

Originally posted on May 15 on my blog for Inside Houisng. 

The reality may not match the rhetoric but it is still good news that a housing pledge is set to be the centrepiece of the Conservative manifesto. Even better, this one seems to involve building social housing rather than selling it off.

The Tories are calling it ‘a new generation of social housing’ for England and the Sunday Times a ‘council housing revolution’ but within a few hours of the policy being announced it was starting to unravel.

Senior Conservatives appearing on Sunday TV, including former housing minister Brandon Lewis, confirmed that there is no new money, just £1.4bn already announced in the 2016 Autumn Statement.

They also refused to confirm how many homes the initiative would generate but look back at the Autumn Statement though and the chancellor was claiming that the £1.4bn would fund 40,000 homes. However, this was part of a relaxation in grant funding and the statement said the money would enable housing associations ‘to deliver a mix of homes for affordable rent and low cost ownership’.

If the funding is uncertain at best, the weekend manifesto announcement sounds like a new idea and there could hardly be a bigger contrast with the Tory headline promise at the last election to extend the Right to Buy to housing association tenants and fund it by forcing councils to sell their most valuable stock as it falls vacant.

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The Conservative manifesto plan for council housing

The Tory ‘council house revolution’ trailed in all today’s papers begs all sorts of questions that I’ll be blogging about soon (now up here).

In TV interviews today we’ve learned that there is no new money, just the £1.4bn for affordable housing promised in the 2016 Autumn Statement.

Conservative spokespeople refused to say how many homes were involved but the Autumn Statement said 40,000.

If that is welcome news it hardly qualifies as a ‘revolution’. However, the policy includes other details that could prove to be more significant in the longer term.

Given that all today’s reports are based on a Conservative Party press release that I can’t find anywhere online, here it is:

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A look ahead to the manifestos

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

As we await the manifestos, what are the chances of real change in housing over the next five years?

Give or take the odd leak, there are some positive signs. First, this election has one of the two major parties pinning its election hopes on housing reform and members of the other saying that ‘building more homes‘ is a bigger priority than it has been for years.

Second, a clutch of select committee reports, which were published just before parliament shut down for the election, set down some useful all-party markers for future policy.

Third, in Gavin Barwell and John Healey the two main parties have their best housing spokespeople in years. That may be damning them with faint praise but both seem to be politicians who get the case for housing.

For all the enthusiasm about Labour’s new deal for private renters and pledge of 100,000 social rented homes a year, the chances of it being able to put them into practice seem somewhere between slim and zero.

So the real questions are whether the Conservatives will go any further than February’s underwhelming Housing White Paper and if so in which direction they will head.

The Conservative Home survey I linked to above found party members agreeing on the need for more homes but favouring two very different ways of building them. One strand of opinion argues for the liberalisation of planning, while another wants Macmillan-style state intervention in housebuilding.

You could almost call them Thatcherite and post-Thatcherite. Presumably, the first would also want a reiteration of the 2015 manifesto pledge to extend the Right to Buy to housing association tenants and would see funding it via forced sales of council houses as a good thing. The second might see sense on forced sales and accept that the market alone cannot fix things.

Where Theresa May stands in all this is far from clear. During her campaign to become Conservative leader she pledged to fight ‘injustices’ and help ‘ordinary working-class families’ but seemed to assume that all of them already own their own home.

Similarly, when Andrew Marr asked her on TV at the start of the campaign about benefit cuts for the working poor, she defended them on the grounds that ‘work is the best route out of poverty’.

But as her staff work on a manifesto apparently designed to steal some of Labour’s clothes, what more eye-catching way to do it could there be than promising a revival of council housing?

That choice aside, how much of a priority will housing really be for her? One reason the White Paper was a damp squib is that housing outcomes depend on so much more than housing policy.

They are determined by choices on social security and tax in particular, and economic policy in general – and most of them are about politics rather than policy.

At all elections the parties promise something like ‘affordable housing for you and your family’ but it’s hard to think of the last time any government achieved this.

Part of the reason is timing: making housing affordable will take longer than the five years (let alone two) that we have between elections.

That leaves parties facing potentially unpopular choices now that may only pay political dividends when they have already left power.

It’s also about the politics of housing and insiders and outsiders. The insiders are the housing haves, people who already own one home or more and who want policies that protect and inflate the value of their assets. The outsiders are the have-nots, those who don’t already own a house and want policies to make it easier to buy and better to rent.

The conventional wisdom that elections can only be won by appealing to insiders has broken down to some extent – the proportion of us who own our homes is 63% and falling and we have children who need homes too – but it’s been replaced a harsher arithmetic.

The parties know that homeowners are not just much more likely to vote than renters, they are also far more likely to be registered to vote in the first place. Thanks to their more frequent moves, private renters are effectively disenfranchised by the housing system.

Jeremy Corbyn’s new package of rights may well boost Labour support among private renters but owners still punch above their weight when it comes to elections.

That is exactly the calculation that Gavin Barwell seems to have made in defending his wafer-thin majority of 165 in Croydon Central.

Housing tenure in his constituency reflects the big changes seen in the past few years. Around 60% of households own their home, compared with 18% in social housing and 21% in private renting, but between 2001 and 2011 private renting rose by 61% while mortgaged ownership fell 18%.

Barwell has shifted policy away from the obsession with ownership seen under David Cameron and George Osborne and he does make a virtue of that in his local campaign.

One of his five priorities is more affordable housing and he also mentions banning letting agent fees and supporting a community land trust.

Good stuff, but if you look at the Twitter account that has now morphed into @BackBarwell, he has come back repeatedly to one housing issue since the election was called: Labour’s inheritance tax bombshell and whether his opponent supports it or not.

This is a reference to Labour’s line on one of Mr Osborne’s most controversial policies: an increase in the inheritance tax threshold for main homes to allow a couple to pass on up to £1m tax-free to their children or grandchildren from 2020/21.

As a housing policy it’s hard to think of anything more regressive or more symptomatic of the ‘broken’ housing market.

That market is already dominated by cash, locking out people with no access to the bank of mum and dad, inheritances and profits from the sales of other property.

The ex-minister is defending a tax cut worth almost £1bn a year that will go not to ‘ordinary working families’ but to people lucky enough to have bought a house at the right time and their descendants. (Needless to say, the tax planners are already coming up with ways to make it go further.)

But in terms of housing politics, he knows it’s a vote winner and one that will appeal directly to the people in his constituency who are most likely to vote.

His party is odds-on to win on 8 June with an increased majority. If he retains his seat, an early test of how serious the party is about housing will be whether he stays on as minister to complete the job set out in the White Paper.

But after that, what exactly? The White Paper is a good start but it does not come close to setting out a vision for the next five years, let alone fixing a broken housing system.

For years our politics has relied on keeping housing insiders happy while policy mitigates the worst impacts on outsiders. At best this has succeeded in slowing down the rate at which the housing crisis gets worse.

At worst it just hands the costs of that crisis to future generations.

The next five years will mainly be about Brexit but sooner or later we will need more than housing politics and policy as usual.

Housing has to work for the many as well as the few for Britain to be a country that works for everyone.rigfi

Time for ministers to listen on the LHA cap

Originally posted on May 2 on my blog for Inside Housing. 

When not one but two all-party committees of MPs call on ministers to think again about a controversial policy you might think they would listen – but will they?

The Work and Pensions and Communities and Local Government Committees say the government should scrap its plan to impose a Local Housing Allowance (LHA) cap on supported housing and pay top-up funding via local authorities and devolved administrations.

Ministers claim the intention is not to save money but to ensure better value for money and monitoring of the quality of services.

But the MPs conclude that ‘the funding proposals, as they stand, are unlikely to achieve these objectives’ and that LHA is ‘an inappropriate starting point for a new funding mechanism’.

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Holding the government to account

Originally published on April 28 on my blog for Inside Housing. 

The housing crisis could persist ‘for decades to come’ unless the government shows more urgency and ambition on supply.

That’s the verdict* from an all-party committee of MPs on Friday in one of a series of reports due to be rushed out in the next few days as Westminster clears the decks for the election.

The Public Accounts Committee says:

We are highly concerned by this lack of urgency and ambition, most of all in view of the rising costs, both human and financial, of homelessness. Not only does becoming homeless people represent a terrible blight on people’s lives, it also places additional strain on public spending: councils’ spending on temporary accommodation amounted to £840 million in 2015–16, a real-terms rise of nearly half (46%) in just five years.’

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The price of everything and the value of nothing

Originally posted on April 27 on my blog for Inside Housing.

Sometimes a conjunction of different news stories shines a new light on things and makes the obvious more obvious.

That’s exactly what happened this week when two excellent long read features on housing and a select committee report made me see familiar issues in a slightly different way.

The first was in Tuesday’s Guardian, an investigation by Holly Watt into the scandal of the privatisation of Ministry of Defence housing.

The big picture is that in 1996 the MoD sold its housing stock for military personnel to Annington Homes for £1.67bn and then rented them back at a big discount to market rates for 25 years.

That may have made short-term financial sense but the long term is a different matter altogether. The homes are now worth £6.7bn and the 25-year discount runs out in 2021. After that there is nothing to stop Annington charging full market rents.

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