Chance of a lifetime

MPs will get the chance to back major housing reforms including new significant exemptions to the bedroom tax later this year. Will they take it?

Andrew George, the Liberal Democrat MP for St Ives, has what he describes as ‘the chance of a lifetime’ to change things through legislation after coming first in the ballot for private member’s bills. Talking to him yesterday gave me a fascinating but slightly depressing insight into how the system – and party politics – work.

He consulted his constituents on a shortlist of options including housing, a Cornish Assembly and health care standards and after more than 2,000 comments has decided to plump for an Affordable Homes Bill with four key elements:

  • Extension of Help to Buy or a new Affordable Homes Investment Bank to underpin the ‘intermediate’ market (shared equity/shared ownership/mutual housing) to construct a new lower rung on the housing ladder for those who cannot afford full ownership.
  • New exemptions to the bedroom tax for anyone who has lived at an address for more than three years or who lives in a home with disabled adaptations
  • A new Use Class for ‘non-permanent residential use’ to empower local planning authorities to control the number of second homes in their area.
  • Enhanced powers of compulsory purchase for local authorities where developers land bank development sites or fail to use sites for which planning permission has been granted but development has not advanced or where need for affordable homes cannot be met on ‘exception’ sites through community land auctions/trusts.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Passing the buck

George Osborne has spent so long outsourcing responsibility for the housing market to Mark Carney that it’s easy to forget the Bank of England’s actual brief.

Far from controlling house prices, or tackling affordability or making the market less dysfunctional, the Bank’s Financial Policy Committee (FPC) ‘is charged with a primary objective of identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system’ and a secondary objective ‘to support the economic policy of the government’.

So the measures the FPC announced today on high loan to income (LTI) mortgages and a slightly strengthened stress test on lending are about preventing future house prices from increasing household debt to a level that poses risks to the financial system rather than tackling current price levels and affordability.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Paying the bill

Blink and you may have missed it but significant housing legislation you may never have heard of passed its final stages in the Commons on Monday night.

Scant discussion in the housing press (including by me) of the Deregulation Bill is perhaps understandable when you consider that it is huge and it covers everything from the right to buy to outer space*. Several of the clauses involving housing were also not in the original Bill and have been added later.

However, here’s what will become law in England this summer as a result of Monday’s votes (there are other minor changes I don’t have room for):

  • The qualifying period for the right to buy will be reduced from five years to three
  • Local authorities will no longer be able to impose standards for new homes that go beyond the building regulations (mainly on energy efficiency)
  • Legislation banning short-term lets of homes in London will be repealed
  • The secretary of state will no longer have the power to require local authorities to produce housing strategies.

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‘We are not a charity’

An eloquent argument for social housing came from an unexpected source on Panorama last night.

The programme covered what it called a new housing crisis: homelessness and the private rented sector. The hook for Britain’s Homeless Families was the fact that the number of people being made homeless by private landlords has trebled in the last five years but it also looked at families stuck in temporary accommodation and facing eviction because of the benefit cap.

It began with the case of Vicky, who was forced to leave her home in Kent because she was on housing benefit despite the fact that she had never been in rent arrears and never had a complaint about her. ‘I’m a bit shocked actually,’ she said. ‘If you treated the property well and you paid your rent I couldn’t see what the problem would be.’

When I tell you that she was one of 200 tenants on housing benefit evicted by the same landlord in Kent you will probably guess that the landlord in question is Fergus Wilson. The man dubbed the king of buy to let justified the decision in the blunt language we’ve come to expect. ‘We are in business to make money, we are not a charity.’

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England, Brazil and me

The four-yearly cycle of hope and disappointment is complete. England’s early departure from yet another World Cup got me thinking about how much things have changed since the first one I can remember.

Everyone who loves football has one World Cup that seems frozen in time. For me it’s 1970. I was six years old when England won in 1966, old enough to realise that something important was happening but not quite old enough to realise what it was. West Germany 1974 and Argentina 1978 were memorable but by then I was a bit more cynical and England failed to qualify for both of them. To the ten-year-old me, though, Mexico 1970 was a thing of wonder, an almost impossibly exotic version of the game I played with my friends in the school playground.

Some of this is to do with age. As with David Hemery and Mary Peters winning gold at the Mexico Olympics in 1968 or Neil Armstrong landing on the Moon in 1969, it happened when I was old enough to appreciate what was happening but young enough to be seeing it for the first time. Add weeks collecting stickers for my Soccer Stars Album and I was hooked:

SS cover

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Something to shout about

Here’s hoping today’s launch of the SHOUT manifesto can be the start of a new era for social housing.

Anyone who’s read this blog will know that I support the campaign but the launch got me thinking in a deeper way about exactly what we mean by ‘social housing’ and why it is ‘under threat’.

The starting point is of course the way that the coalition has deliberately blurred the distinction between social and affordable rent. Only last week George Osborne’s Mansion House speech and Kris Hopkins’s press release on the latest affordable housing figures provided two classic examples. The latter even managed to mix up the stats on social, affordable and all homes.

On twitter I called it a ‘triple blur’ but Tom Murtha, one of the people behind SHOUT, came up with the much better metaphor of the ‘three-card trick’. I love the way that conjures up images of Osborne and Hopkins as shady operators inviting credulous punters to ‘find the lady’ while keeping a wary eye out for the police. For a more serious analysis of why the distinctions matter, not just in the construction of new homes but in the conversion of existing social rent homes to affordable, see this blog on Red Brick.

However, the blurring did not start with Osborne and Hopkins. In terms of the letter of the law, it could even be argued that they are correct when they mix up ‘social’ and ‘affordable’. The Localism Act follows Part 2 of the Housing and Regeneration Act 2008 in defining social housing as both ‘low cost rental accommodation’ and ‘low cost home ownership accommodation’ that are ‘made available to people whose needs are not adequately served by the commercial housing market’. Low cost rental means at a rent below the market rate. Low cost home ownership means shared ownership or equity percentage arrangements. Strictly speaking then, ‘social housing’ includes not just affordable rent and shared ownership but even the shared equity element of Help to Buy.

Except of course that virtually everyone in housing believes there is a clear distinction between social rent and affordable rent let alone shared ownership and shared equity. Social rents are affordable in relation to incomes whereas affordable rents are merely rents at below market levels and may therefore be completely unaffordable. Social housing tenancies offer the security that turns a house into a home rather than a short-term let.

However, there are and always have been more grey areas. On rents, for example, the earliest council housing was generally only affordable to more affluent workers. The target rent regime is far from perfect: the current formula means that rents are rising faster than earnings and have been for years. There is also huge variation around the country: ‘affordable’ rents are not always ‘unaffordable’ and in some areas private rents are actually lower than social rents.

The crucial point for me is that social rents are set by a formula that includes earnings where affordable rents are merely a reflection of ever more unaffordable house prices and rents in the private sector. In whole swathes of the country, and especially in the South East, they will only be ‘affordable’ to working tenants if they can claim housing benefit.

Does that matter if housing benefit is ‘taking the strain’? For all kinds of reasons, yes it does: work incentives will be blunted; the housing benefit bill will rise at a time when it is already under pressure; inevitable cuts will leave tenants with increasing shortfalls; and the evidence seems pretty clear that it offers worse value for money over the long term.

On tenure, social landlords were using introductory and probationary tenancies for years before the Localism Act allowed them to use flexible tenancies. And security of tenure has only existed since 1981 and was enacted not by a Labour government but by Margaret Thatcher (though it was a bi-partisan policy to implement what was already seen as de facto security because council landlords were publicly accountable bodies).

However, starved of investment and denuded by the right to buy, social housing is very different now than it was then. Alongside a major programme of investment and the removal of restrictions on council borrowing, plus an end to affordable rent, SHOUT also argues that:

  • Social rented housing should be viewed as a tenure of equal status to others. It meets needs that other tenures cannot and is a tenure of choice for millions of people. This choice should be acknowledged and supported.
  • National and local politicians should be encouraged to take the lead in affirming the positive value and purpose of social rented housing, and challenging the demonisation and stigmatisation of social housing and social housing residents.

Kate Davies addressed some of these points in a recent Guardian Housing piece that condemned the stereotypes but was also dubious about ‘social housing professionals queuing up to express their love of social housing’.

‘I find the demonisation of social tenants obnoxious,’ she said, ‘but I also shudder at this crude promotion of council housing as an idealised workers’ paradise. Let’s be absolutely honest about the facts.’ Her point I think was that we should present social housing as it is rather than reach back nostalgically to the past: celebrate the achievements of aspirational tenants who want to move on while accepting that ‘it provides a safe haven for vulnerable people, and this is the real value of social housing today’.

I found myself agreeing with some of what she said, challenged by some of it but still troubled by the implications of accepting that social housing should be limited to what circumstances have made it. Go right back to the Localis report that influenced the coalition’s housing reforms and you’ll find it advocating social housing only for the most vulnerable and near-market rents for everyone else; go to where the reforms went furthest, in Hammersmith & Fulham, and you’ll find new criteria for the waiting list that are so restricted that it fell to just 700 and Conservative councillors saying that this proves there is no demand for social housing.

Take a look, for example, at the prospectus for the Estate Regeneration Programme published by the DCLG last week. The aim is to redevelop existing estates at a greater density to provide more homes. It sounds a good idea in principle as does replacing tower blocks with terraced streets. The prospectus does also distinguish between ‘social’ and ‘affordable’ housing. However, there are no stipulations as to the split between them and between homes for rent and for sale. As one of the specific objectives is to maximse the output of homes for the minimum amount of public loans available, it’s not hard to see the danger of Hammersmith & Fulham-style regeneration of existing estates with little or no social housing.

It seems naïve to imagine that the clock can be turned back to before the Localism Act and still less to 1979 or 1945. With investment in short supply, it may well be that higher rents and flexible tenancies will be an important part of the housing and regeneration mix. However, they will continue to be regarded with suspicion unless government and landlords make a clear commitment to the future of social renting rather than collude in its slow death. With that commitment to genuine affordability in place, intermediate (definitely not ‘affordable’) rents could come to be seen as an important option for tenants who can afford them just like low-cost ownership is for those who can buy. The new ideas put forward by Generation Rent yesterday could come into play too.

With that, plus the all-party support seen at today’s SHOUT launch, could the way then be clear to reclaim the broader meaning of ‘social housing’? As a range of options to rent and buy a home for the millions of people who the market has failed rather than an A&E department for the poorest and most vulnerable? That really would be something to shout about.


Fresh ideas

A new manifesto for private renters published today highlights the new thinking on housing emerging ahead of the general election.

This is the first of two manifestos being launched this week by new organisations with different priorities and constituencies to the existing ones. We’ll hear from SHOUT, the campaign for social housing, tomorrow but today it’s the turn of Generation Rent.

And it’s about time. Since the creation of the assured shorthold tenancy and the invention of buy to let, the private rented sector has more than doubled in size. That’s great news for landlords and letting agents but not so great for tenants with minimal security of tenure and consumer rights.

To illustrate my point, here are three recent bits of news.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing