10 things about 2016: part onePosted: December 23, 2016
Originally published on December 23 on my blog for Inside Housing
It was a year that fell neatly into two halves: before and after everything was turned upside down. The vote for Brexit on 23 June transformed politics, and the complete change of government and ministers has shifted priorities that had seemed set in stone until 2020.
But as some things change, others remain very much the same. Here’s the first of my two-part look back on the things I was blogging about in 2016.
1. Ambitions for new homes
The year began with what David Cameron hailed as a “radical new policy shift for housing”. The prime minister said that “for the first time in more than three decades” the government would directly commission homes itself on public land, giving priority to small builders. It was a welcome move but it was hard not to think of previous housing strategies that turned out not to be as “radical and unashamedly ambitious” as he claimed.
Cameron’s commitment to a million new homes by 2020 – or 200,000 a year for five years – seemed to be exactly that when the government’s own housebuilding figures showed completions running at around 140,000 a year. However, in May I questioned whether the target was really as ambitious as it seemed. It was already becoming clear that ministers were using higher figures for the net additional supply of homes as their yardstick. The total for 2015/16, the first of the five years, was just 10,000 short of the 200,000 a year benchmark.
An influential House of Lords committee gave short shrift to a claim by Brandon Lewis that the housing plans were “very ambitious”. It called instead for 300,000 new homes a year, backed by a series of radical changes to policy on investment, planning and tax.
2016 ends with Lewis in a different job, Cameron out of a job and the promise of yet another housing plan. The White Paper will no doubt be equally as ‘ambitious’ when it is finally published but the signs are that this one will have fewer adjectives and more substance.
2. The obsession with ownership
One thing mattered above all else for pre-Brexit Conservatives when it came to housing: the decline of homeownership and the threat that posed to their electoral prospects. This was why George Osborne ploughed billions into the biggest ever programme of public support for the private market and why it was prepared to play Monopoly with schemes like London Help to Buy.
But was it working? In February the English Housing Survey showed the first annual increase in the homeownership rate since 2003 and even a surprise turnaround in the prospects for Generation Rent. I urged caution: an unusually large fall in ownership the previous year might have skewed the figures, there were other anomalies and the longer-term picture was still one of the relentless rise of private renting.
The situation was prompting new thinking across the political spectrum and notably in a pamphlet for the centre right thinktank Civitas. Peter Saunders warned of declining ownership being “cemented into British society for decades to come” and urged solutions including an end of demand-side subsidies like Help to Buy, a house price target for the Bank of England and even an idea also floated by Jeremy Corbyn: a new Right to Buy for private tenants.
3. The future of housing associations
This was the hot topic of 2015 thanks to the continuing impact of austerity, the prospect of a wave of mega-mergers, reclassification by the Office for National Statistics and the voluntary deal with the government over the Right to Buy. Those debates continued in 2016 though not at the same volume: for example, the Housing and Planning Act includes deregulatory moves to reverse reclassification but the deal means it does not include the Right to Buy (other than indirectly through the forced sale of council houses to pay for it) and the start of the full policy was put back with another regional pilot.
I blogged about the hybrid future of associations as they balance competing commercial, social and community pressures and about competing visions for housing’s future and the place of associations in it. No crystal balls were needed when it came to Inside Housing’s annual survey of chief executive salaries.
4. The Housing and Planning Bill
The crisis in homeownership was also the motivating force behind the subject I blogged about most in 2016. The Housing and Planning Bill continued the reforms of social housing that began under the coalition, including making Pay to Stay and fixed-term tenancies mandatory for council tenants. However, it was also about delivering the manifesto promises that had helped the Conservatives win in 2015: the extension of the Right to Buy to housing association tenants, paid for by the sale of vacant council homes, and the construction of 200,000 Starter Homes to be sold at a 20% discount to first-time buyers.
Plans essentially written on the back of a fag packet were exposed to forensic scrutiny in the Commons and the Lords. The bill came in for scathing criticism from MPs and peers and from the all-party Communities and Local Government and Public Accounts Committees over the lack of detail. Tory MP Stephen Phillips accused the Department for Communities and Local Government of “treating parliamentarians with contempt”. At first this seemed to make little difference as the bill passed all its parliamentary stages. However, the cracks began to show in a series of government defeats and concessions in the Lords and they were to grow wider as the year wore on.
5. The Brexit earthquake
Speaking of Stephen Phillips, who would have guessed when he made that outburst at the Public Accounts Committee in May that by December he would not just be on the winning side in the referendum but also an ex-MP? Certainly not me: it seemed about as unlikely as the prime minister being on the losing side, an ex-MP and earning his former annual salary in an hour or so on the US lecture circuit.
Ahead of the referendum, I blogged on the way that a Treasury prediction of gently falling house prices was hyped up as a forecast of a big fall and the consequences of Brexit that we are still working through. My blog in the immediate aftermath was too gloomy (at least so far) and hopelessly wrong about the identity of the new prime minister and chancellor but also raised the disconnect between the views of housing professionals and tenants.
Later I put forward the case for post-Brexit investment in social housing. Similar arguments about pro-cyclical investment in rented homes and training for young workers were made in a government-sponsored review of the future of the construction industry. One key recommendation was investment in ‘pre-manufacturing’ and by the end of the year that was becoming reality with the announcement of a £2.5bn investment by an international consortium working with Your Housing Group.