10 things about 2012 – part 2Posted: December 31, 2012 | |
The conclusion of my two-part review of the issues and people I was blogging about in 2012 looks at bullding, owning and affording homes – and a year of anniversaries.
6) Housebuilding: talking a good game
If you measure the importance of an issue by its media profile, 2012 was certainly the year of housebuilding. The first half of the year saw momentum building behind the idea that investment in new homes would be good for the economy as well as people who need a roof over their heads. Support came from economists and politicians (increasingly from the Lib Dem side of the coalition) and even the director-general of the DCLG was talking about a ‘decade of housebuilding’ at the CIH conference in June. Hopes were genuinely high that the case for housing was winning support at the highest levels of government and David Cameron’s party conference speech in October was heavy on anti-nimby rhetotric.
Those hopes were not dashed completely in the second half of the year but it became increasingly clear that the government was intent on a conventional approach and not minded to try anything as radical as QE for housing or changing the public sector borrowing rules for council housing. The housing and planning package in September and the Autumn Statement in December offered little substance and plenty of retreads of existing policies while the housebuilding numbers remained stuck in the doldrums.
7) Giving housebuilders what they want
A poor year for housebuilding proved to be a very good one for housebuilders as their results revealed rising margins, falling debts and soaring profits. The suspicion grew of an assumption within government that the way to boost housebuilding is to give housebuilders what they want, with a succession of housebuilder-friendly government initiatives included the NewBuy scheme to guarantee mortgages for new homes, a review of red tape, measures to unblock stalled sites and the National Planning Policy Framework. By the end of the year the government was introducing a Growth and Infrastructure Bill that allowed the renegotiation of ‘economically unrealistic’ section 106 agreements. If the evidence to justify it seemed weak, so did the apparent lack of any quid pro quo for all the taxpayer support.
8) The affordable squeeze
The changes to section 106 agreements threatened to put an even greater squeeze on affordable housing investment that was already under severe pressure. After a calamitous 97 per cent fall in April to September 2011, 2012 saw starts of affordable homes bounce back. However, the total of 3,735 was still down 72 per cent on 2010 with the biggest falls coming in social rented housing and in London.
The coalition’s social housing reforms continued with the underwhelming relaunch of the right to buy with an unlikely-sounding buy one, get one freeoffer. Reports from the National Audit Office and Public Accounts Committee revealed concerns about the slow progress of the affordable rent programme and the implications for rent levels and the housing benefit bill. I blogged about the slow death of social housing.
9) A year of anniversaries
Appropriately, given the shift to higher ‘affordable’ rents and the rise and rise of private renting, 2012 marked the 21st anniversary of one of the most significant statements in the recent history of housing. ‘Housing benefit will underpin market rents – we have made that absolutely clear,’ Conservative housing minister Sir George Young said in January 1991. ‘If people cannot afford to pay that market rent, housing benefit will take the strain.’ Not for much longer in the wake of a succession of cuts.
As well as the 5th anniversary of this blog, 2012 saw three other big anniversaries for housing. I blogged about the centenary of the death of Octavia Hill and the mixed legacy of the great social reformer and the 150th anniversary of the announcement of a trust ‘to ameliorate the condition of the poor and needy’ of London by an American banker called George Peabody. The year also saw the 70th anniversary of the Beveridge report, the blueprint for the welfare state that never quite managed to solve the problem of housing costs and a succession of attempts by politicians to claim his legacy. On the Queen’s Diamond Jubilee, I took a look back at six housing generations and their very different experiences of the housing market.
10) Going backwards on the housing market
Speaking of which, house prices and transactions continued to flatline and thousands of first-time buyers continued to be excluded from a dysfunctional market. There were some tentative signs of a slight upturn at the end of the year but the billions of pounds poured into schemes like quantitative easing and Funding for Lending largely benefitted banks and existing home owners. Evictions of tenants was a much bigger problem than repossessions of owners in 2012. Two years after it was pronounced ‘absolutely dead’ buy to let continued to grow while a growing proportion of home sales in London were to overseas property investors.
Long-term reform of property taxation looked as far away as ever and a study for the Joseph Rowntree Foundation concluded that housing market policy was going backwards. The FSA finally published its Mortgage Market Review with the aim of ‘hard-wiring common sense’ into it. However, the legacy of past regulatory failures was graphically illustrated in the tragic case of Malcolm Frost, who was found dead in his garden shed a few days after being evicted from the home he had sold and leased back.
Read the rest of this post on Inside Edge, my blog for Inside Housing