Latest attempt to end fire safety crisis leaves more questions than answers

Originally published as a column for Inside Housing.

While everyone will be hoping that Robert Jenrick has finally found a way through some of the worst aspects of the fire safety crisis, it’s hard not to be a bit sceptical.

The housing secretary issued a dramatic written statement just as MPs were preparing for the Second Reading debate on the Building Safety Bill last week. An accompanying press release from the Ministry for Housing, Communities and Local Government said that: ‘Leaseholders in blocks of flats with cladding should be supported to buy, sell or re-mortgage their homes after the government agreed with major lenders to pave the way to ending the need for EWS1 forms. It comes following expert advice that the forms should no longer be needed on buildings below 18 metres.’

However, that use of ‘should’ is telling because the announcement will achieve nothing if mortgage valuers and lenders do not accept it and if potential buyers are not convinced that the flats are risk-free. The banks quoted as supporting the agreement have only promised to review their practices so far.

Previous attempts to reform the EWS1 process have failed and – even though the small print of this announcement contains the potentially significant addition of a government-backed indemnity insurance scheme for external wall system assessors. This one has already hit a significant obstacle as the Royal Institution of Chartered Surveyors (RICS) says it cannot change its advice to valuers and banks saying they will not change their policies the government changes its own fire safety guidance.

Even if we assume that this is a chicken and egg problem that can be resolved, there are still grounds for scepticism about Jenrick’s attempt to close Pandora’s Box.

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Social housing as business opportunity

Originally published as a column for Inside Housing.

Sometimes a news story stops you in your tracks. A report in The Times that former chancellor Philip Hammond is teaming up with Tory election guru Sir Lynton Crosby in a social housing business certainly did it for me.

After checking that it really was July and not April 1, I read that the plan is to lease homes to local authorities where there is a shortage of social housing. Municipal Partners, a company formed last year, is a ‘for-profit social impact business to acquire, refurbish and lease residential property’.

Seen from the perspective of the Labour leader of Barking and Dagenham Council, Darren Rodwell, this makes some kind of sense in an area where 30 per cent of properties are owned by buy-to-let landlords, including many sold under the Right to Buy. Municipal Partners would instead fund the purchase of the homes, the council would charge affordable rents and pay an income to the company before taking back possession at the end of an agreed period.

Cllr Rodwell says that ‘we can’t fund it via government, so we’re talking to different private pension funds, other organisations and seeing what’s out there’. While he has political differences with Philip, now Lord, Hammond, ‘if he and the company he represents gives us the deal that works for us, and the due diligence all plays out, then obviously we would do business with them because it would benefit my residents’.

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The pandemic and wealth inequality

Originally published as a column for Inside Housing.

Three numbers from a report published this week sum up the financial impact of the pandemic on households – and housing is at the heart of it.

First, £50,000. That’s the average increase in the wealth per adult of the richest 10 per cent of households, says the report by the Resolution Foundation think tank.

Second, £7,800. The increase in the wealth per adult of households in the fifth decile, those right in the middle of the wealth distribution.

Third, £86. That’s the average gain per adult in the poorest 30 per cent of the population.

In part, these numbers reflect the pattern established in the 1980s and then accelerated after the financial crisis whereby wealth begets wealth.

But they also represent something new: the Resolution Foundation estimates that total household wealth has increased by £900 billion since the start of the pandemic, making the period we have just lived through the first recession since the end of the Second World War in which we have got richer.

Some of that is down to spending less (£125 billion) and getting into less consumer debt (£10 billion) but over 80 per cent of it is due to rising asset prices (£750 billion). 

Some of that is driven by rising share values but most of it is due to increases in house prices, which are now up by more than 10 per cent since the start of the pandemic, fuelled in part by the stamp duty holiday.

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Ominous signs ahead of the spending review

Originally published as a column for Inside Housing.

The government’s refusal to extend the £20 a week uplift in Universal Credit has ominous overtones for housing’s prospects in the spending review to come in the Autumn.

Consider the evidence. Unemployment-related benefits in the UK are among the least generous in Europe, not least because of cuts made in the original plans for Universal Credit. Removing the uplift means benefits will fall to their lowest ever level as a proportion of earnings.

For all the government’s arguments about levelling up, the cut will hit a third or more of working age households in Wales, the North and Midlands against a fifth in the South East.

For all the government’s arguments about work being the route out of poverty,  almost as many people on Universal Credit (2.2m) are in work as unemployed and looking for work (2.3m). The remaining 1.6m are not required to work because of ill-health or having a child under 1. All will become £1,000 a year poorer. 

Of course there is still time for ministers to change their mind, but for the moment they look set to go ahead despite lobbying from the last six Conservative work and pensions secretaries to keep the uplift.

But can you imagine the last six housing ministers, or communities secretaries, doing the same as their colleagues at the Department of Work and Pensions? And, even if they did, do you think that the chancellor would be more or less likely to listen to them?

So Matthew Bailes is surely right to warn that the housing sector should be on a ‘war footing’ ahead of a spending review being conducted in the context of long-term structural pressures on the public finances.

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Falling short on climate change

Originally published as a column for Inside Housing.

With just four months to go until the COP26 UN Climate Change Conference in Glasgow, the government is long on ‘historic’ targets but woefully short on credible policies to implement them.

That was the verdict from the government’s own adviser last week in reports that identify housing as a key sector where action fails to match the lofty and legally binding target of achieving net zero by 2050.

The Committee on Climate Change says a ‘step change’ is required but it is hard to discern any comprehensive strategy in climate plans announced in the last 12 months and statements of ambition have been undermined by delays to essential legislation and plans to decarbonise buildings.

The Ministry for Housing, Communities and Local Government (MHCLG) is accused of falling short on ensuring that building standards are fit for purpose and properly enforced and overseen ‘almost none of the necessary progress in upgrading the building stock’.

Meanwhile the Planning Bill misses ‘the powerful opportunity to ensure that developments and infrastructure are compliant with Net Zero and appropriately resilient to climate change’.

Delivery rates on key retrofit measures have ‘continued to stagnate’. On the vital issue of how homes are heated, the number of heat pumps installed in new and existing homes rose from 33,000 in 2019 to 36,000 in 3020. The CCC says 900,000 installations a year are needed by 2028. 

We are even falling short in new homes. Heat pumps were installed in just 5 per cent of them in 2020 against a requirement for 20 per cent by this year.

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Politics trumps planning

Originally published as a column for Inside Housing.

Two by-elections, two widely predicted Conservative victories that did not quite turn out that way.

Labour holding a seat and the Lib Dems winning one against a government that has been in power for 11 years would never have been seen as surprise results in previous parliaments but they could signal politics beginning to return to normal after Brexit, the 2019 election and the pandemic.

If Batley and Spen shows that the Tories can no longer be confident in Labour seats in the North, then Chesham and Amersham shows a worrying vulnerability to the Lib Dems in the South.

And the upshot is a depressing one for anyone who believes in the case for new homes. Trouble was always likely when planning reform met politics, but I wasn’t expecting it to happen so quickly.

Planning is, of course, always contentious – even in a Batley and Spen by-election dominated by other issues it still featured in the letters pages of the local press.

But it was front and centre in Chesham and Amersham. While HS2 was also seen as a factor, the victorious candidate made heavy play of planning and housebuilding in her leaflets, quoting extensively from Tory critics of the plans who say they will mean ‘the wrong homes being built in the wrong places’.

This was deeply cynical of the Lib Dems, who support both the new high-speed train line and 300,000 new homes a year at a national level but said the opposite locally.

However, they were not the only ones. The losing Conservative candidate proposed turning much of the constituency into a national park during the campaign. This surely foreshadows likely tactics by local Tories in getting as much of their land as possible designated as ‘protect’ against new homes under the new system proposed in the Planning Bill.

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