Going for gold

As the Olympics gives a daily boost to London’s image as a global city, how long will it be before the government acts on overseas property ownership?

The evidence on the scale of the ‘investment’ and the impact on the rest of the London housing market is mounting steadily. In March, I blogged about a report from the IPPR arguing that London property has become a sort of global reserve currency for the wealthy elite and warned about the effect on housing across the capital as billionaires price out millionaires and the effect works right down the system to priced-out first-time buyers, ripped-off private renters and forced-out housing benefit claimants.

Read the rest of this post at Inside Edge, my blog for Inside Housing


No answer

If the case for a housing stimulus was already unanswerable, today’s confirmation of the depth of the recession makes the lack of one unfathomable.

It’s not just the 0.7 per cent fall in GDP in the second quarter or the 0.3 per cent falls in the two previous quarters or that this is the first double dip recession since the 1930s. It’s not even the fact that the construction industry’s 5.2 per cent fall in output between April and June and 4.9 per cent in the first quarter is one of the major reasons why it happened.

Read the rest of this post at Inside Edge, my blog for Inside Housing

Letting go

Labour’s plan to regulate letting and managing agents is a good start to its policy review on housing – but no more than a start.

The idea enjoys widespread support – not just from private tenants who are fed up with being ripped off by outrageous fees but from private landlords and reputable agents too. As Labour points out: ‘It’s a peculiarity of current policy that while estate agents, who hold very little money on behalf of their clients, are regulated, letting agents who hold significant sums on behalf of landlords and tenants are not.’

Read the rest of this post at Inside Edge, my blog for Inside Housing

More trouble with troubled families

John Humphrys succeeded in the impossible this morning and left me feeling more generous towards the Troubled Families Programme – until I remembered all the problems with it.

Last month I blogged about the way that the government’s flagship programme was born out of a dodgy statistic and even dodgier assumptions about ‘problem families’. Today Louise Casey, head of troubled families policy at the DCLG, published a report comprising interviews with 16 families about the problems they face. They are powerful stories of abuse, care, problems at school, problems with drugs and alcohol, risks of eviction and more that illustrate the scale of the challenge and also the value of the work done by family intervention projects.

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Plus points

This blog has a tendency to be negative at times so I’ve been trying to accentuate the positive ahead of the announcement on housebuilding expected later this week.

The good news is that the government is definitely taking housing seriously. Peter Schofield, director-general of the DCLG, confessed at the CIH conference last month that the Treasury had barely considered housing when it drew up its original plan for growth last year. In the run-up to the growth plan mark 2 and publication of the Montague report on the private rented sector, I’m told that David Cameron has been making the point that ‘all roads lead back to housing’ while Nick Clegg was using housing to rally his party faithful over the weekend at the Social Liberal Forum.

Read the rest of this post at Inside Edge, my blog for Inside Housing.

Model theory

So is affordable rent value for money? After two hours of scrutiny from MPs we are still not much closer to an answer.

What seems clear is that between them the DCLG, HCA and housing sector have done a pretty good job of making the best of a grim situation up to 2015. What is far from clear is what that means over the next 10, 20 or 30 years.

The influential public accounts committee spent yesterday afternoon questioning experts from the sector plus Sir Bob Kerslake of the DCLG and Margaret Ritchie of the HCA. This follows publication of a report on the affordable rent programme by the National Audit Office that, as I blogged last week, left several key questions about the programme unanswered. By my reckoning I now have partial answers to two out of five questions, some more information on another two but an even more confused picture on the fifth.

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As the Bank of England unleashes another £50 billion into the economy is it time at last to use quantitative easing in a way that will boost the economy and tackle the housing crisis at the same time?

I’ve made the case for QE for housing for several months now (see here, here and here) and it’s been made in much more detail by my fellow blogger Brian Green of Brickonomics here, here and here.

In essence, the idea is that the government should set up a not-for-profit public interest company with a remit to fund house building. The Bank of England would use £50 billion of housing QE to buy bonds in the company to fund the construction of homes and associated infrastructure and the bonds would be repaid from the rental and eventual sale of the homes.

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Final answer?

The verdict from the National Audit Office (NAO) on the affordable rent programme is generally positive but it still leaves several key questions unanswered.

The financial watchdog says that the DCLG has ‘so far achieved its policy objective to maximise the number of homes delivered within the available grant funding’. Grant per home was a third of previous levels, the programme was over-subscribed and 80,000 homes are being delivered against an initial target of 56,000.

The NAO concludes that:

‘The Department and the [Homes and Communities] Agency selected a design for the Programme that is projected to maximise benefits and the number of homes delivered within the constraints of the £1.8 billion capital funding available. The launch of the Programme has been successful. Providers have committed to building some 80,000 homes for the £1.8 billion of government investment, approximately 24,000 more homes than first expected. In this respect, the Programme has made a good start.’

So far, so good but the NAO also reveals several risks:

  • 18 per cent of contracts had not been signed as at April 2012 (mostly local authorities that needed to confirm their borrowing capacity following HRA reform)
  • more than half of the homes are planned for the final year of the programme ‘so slippage would put at risk achievement…of the planned 80,000 homes’
  • some providers in London are worried they will not be able to charge the rents they originally agreed
  • the DCLG needs to carry out ‘a thorough analysis of the financial position of providers to assess the repeatability’ of the programme after 2015.

In the process, the report reveals details about the programme that I at least have not seen before but it also begs some more questions.

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Out for the count

It was seconds out, round 27 in the Commons yesterday in the housing stats war but where were the two main contenders?

Communities and local government questions has become a stats slugfest between Grant ‘Slasher’ Shapps in the blue trunks and Jack ‘Jabber’ Dromey in the red but yesterday as the theme music from Rocky began to play there were two new boxers in the spotlight. Given everything that’s been happening outside the ring – new and highly contentious stats on affordable housing and homelessness to argue about and an official complaint from Dromey to the referee – was I the only one in the crowd to feel let down?

Read the rest of this post at Inside Edge, my blog for Inside Housing