30 years after – part 2

Posted: July 3, 2023 | Author: | Filed under: Help to Buy, Housing associations, Housing market | Leave a comment

Originally written as a column for Inside Housing.

Kylie Minogue is riding high in the charts, Frankie Dettori wins the Ascot Gold Cup and the housing market looks to be in deep trouble.

In 1992, as in 2023, the more some things change, the more they stay the same.

Part 1 of this column looked at the similarities and the differences between the situation now and 30 years ago. This second part looks at the potential consequences for the housing system as a whole and what the government can do about it.

Arrears and repossessions: This is the issue burnt into the collective memory from the crash of the early 1990s, with repossessions peaking at 75,000 in 1992 and more than 400,000 owners losing their home in the decade as a whole.

The political impact was huge: the economic doom and gloom may well have contributed to the surprise Conservative victory at the general election in April 1992 but Black Wednesday that September ruined the party’s reputation for economic competence for years to come.

Partly thanks to that experience, and the losses made by lenders then, we are going into this downturn with arrears around half and repossessions about a quarter of the level at the equivalent stage in the 1990s cycle when prices were just beginning to fall.

A repeat currently looks unlikely unless we see second-round effects of sustained rate rises including a recession and large-scale job losses – but the odds on those are shortening.

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30 years after – part 1

Posted: June 22, 2023 | Author: | Filed under: Buy to let, Housing market, Mortgages | Leave a comment

Originally written as a column for Inside Housing.

Interest rates rising to tame inflation. Home owners worrying about how they will pay their mortgage. Politicians panicking about the economic and electoral impact.

Prospects for the housing market arguably look bleaker than at any time since the spectacular crash of the early 1990s (unless you are a renter waiting for prices to fall, of course).

Ultra-low interest rates helped the economy out of the downturn that followed the financial crisis in 2008 and have underpinned rising house prices over the last 13 years. But that whole era now seems to be over and the escape route looks blocked.

So how does the situation now compare to what happened 30 years ago? This first part of a two-part column looks at the similarities – and some significant differences.

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A turning point for social housing?

Posted: June 13, 2023 | Author: | Filed under: Cost of living, Council housing, Housing associations, Housing finance, Social housing | Leave a comment

Originally written as a column for Inside Housing.

For as long as I can remember the social housing business model seems to have been at a turning point.

From private finance to stock transfer, from affordable rent to welfare reform and from austerity to the rent cut, the policy changes have kept coming against a wider backdrop of financial crisis, Grenfell, Covid, Rochdale and the cost of living crisis.

For years it’s seemed that something has to give – until it does and landlords have to do more with less and tenants get less for more and apparent turning points become spinning in ever-decreasing circles.

This time around, though, you really get the sense that things can’t simply continue as they are and as they have been.  

That was what came across quite powerfully both from this week’s first hearing of the Levelling Up, Housing and Communities Committee’s inquiry into the finances and sustainability if the social housing sector and from the written evidence submitted in advance. The inquiry continues with a new set of witnesses on Monday.

This is not just about the impossibility of squaring the circle between competing priorities, of continuing to deliver new homes at the same time as fixing unsafe buildings, regenerating ageing estates and decarbonising existing homes.

And it’s no longer just about doing more with less either. The return of inflation, and even larger increases in construction prices, mean delivering the same with much less.

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Wales consults on right to housing and fair rents

Posted: June 8, 2023 | Author: | Filed under: Private renting, Rent control, Wales | Leave a comment

Originally written as a column for Inside Housing.

The right to housing. Rent regulation. Two of the most prominent big ideas for fixing the housing system have just gone out for consultation in Wales.

There is still a long way to go after publication of what amounts to the lightest of green papers and there is a big difference between proposing something and implementing it. However, taken together they represent a big challenge to current orthodoxy.

The green paper on housing adequacy and fair rents is the result of the cooperation agreement between Welsh Labour and Plaid Cymru. A white paper will follow but this is more of a call for evidence than a definite commitment to action or legislation.

The right to adequate housing is part of a United Nations covenant on economic, social and cultural rights that the UK signed up to almost 50 years ago. However, turning a vague aspiration to ‘housing as a human right’ into something more meaningful means incorporating it into national law, a move with strong support in the housing sector in Wales.

At the same time, as in the rest of the UK, support has been growing on the left and among private renters for some form of rent regulation.

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The long wait for meaningful reform of leasehold

Posted: May 29, 2023 | Author: | Filed under: Leasehold, Legal | Tags: | Leave a comment

Originally written as a column for Inside Housing.

Churchill was in no doubt that leasehold needs fundamental reform.

‘Who was more likely to be a contented citizen, the man who was a freeholder and who was in his property, or the man who was at the mercy of a colossal landowner?’ he asked in a Commons debate.

It says everything about the snail’s pace of progress on leasehold reform that the speaker was not Winston Churchill, the wartime leader and Conservative prime minister in the 1950s, nor even the more youthful Winston Churchill who was a radical land reformer as a Liberal MP in the 1910s.

Instead it was his father, Randolph Churchill, backing one of the first meaningful attempts at leasehold reform way back in 1884. Needless to say, the leasehold enfranchisement bill was blocked by a Conservative government full of property owners.

Flash forward 139 years and the same argument applies to almost five million leaseholders in England and Wales, the only two countries in the world that have still not abolished or radically reformed an archaic system that dates back to the Domesday Book.

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Modern methods, same old problems

Posted: May 10, 2023 | Author: | Filed under: Modern Methods of Construction | Tags: | Comments Off on Modern methods, same old problems

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The parties start to set out their general election stall

Posted: May 4, 2023 | Author: | Filed under: Help to Buy, Home ownership, Housebuilding, Planning | Leave a comment

Originally written as a column for Inside Housing.

If this week was a preview of what the main parties will be offering on housing at the next general election then it is probably best to look away now.

Perhaps the best that can be said is that, just as Thursday’s local elections only offer clues as to the outcome of next year’s big event, so the policies announced in the run-up to them may only be a taster of what’s still to come.

But that is being optimistic: otherwise we got some standard tropes from Labour about

home ownership and signals that the Conservatives could be about to reach back into their collection of greatest misses.

In a series of interviews on Sunday, Keir Starmer set out his ambition for Labour to be ‘the party of home ownership’:

This standard appeal to aspirational voters begs some obvious questions about how and what else.

Restoring targets for housebuilding recently scrapped by the Conservatives would be a good start and would come alongside existing Labour policies of ‘first dibs’ for local first-time buyers and a block on overseas buyers.

But whether that will be enough to generate 300,000 new homes a year (the targets hadn’t done that before they were scrapped) and whether even that will make homes more affordable must both be doubtful.

The following day (coincidence?) The Times reported that Rishi Sunak is putting Help to Buy ‘back on the table’ as a key plank in the campaign for a potential Conservative fifth term.

Government sources told the paper that the move could come in the Autumn Statement or the Spring Budget. ‘We cannot go into the next election without an offer for first-time buyers,’ said a minister. ‘We all know that homeowners are more likely to vote Conservative and we cannot cede this ground to Labour.’

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Fine words on social housing only go so far

Posted: April 27, 2023 | Author: | Filed under: Affordable housing, Council housing, Levelling up, Social housing | Leave a comment

Originally written as a column for Inside Housing.

‘Homes for social rent are a fundamental part of our housing stock—a lifeline for those who would struggle to obtain a home at market rates.’

It’s a sign of how much has changed in the last six years that statements like that from Conservative politicians (in this case housing minister Rachel Maclean in a Commons debate last week) have become almost routine. For good measure, she also reaffirmed  ‘the unshakeable commitment of the government to drive up both the quality and the quantity of this nation’s housing stock’.

The comments are part of a steady conversion by ministers to the merits of a tenure that not so long ago they seemed intent on dismantling. Since Grenfell, there has been a steady softening in tone and relaxation in policy, with Theresa May as prime minister and Michael Gove as housing secretary prominent among the converts.

But all the fine words and tweaks to policy are not yet matched by results. As MPs from both sides of the house pointed out in the debate, the current output of 7,500 social rent homes a year fails to match the 21,600 a year lost to the Right to Buy and demolition, let alone the 90,000 a year that the all-party Levelling Up, Housing and Communities Committee has consistently argued are needed.

All this in the same week as research by the National Housing Federation (NHF) showed that two million children are living in overcrowded homes with no personal space because they cannot access a suitable and affordable home.

Much of this is obviously down to the fact that the Treasury remains unconvinced about these arguments. True, £11.4 billion for the Affordable Homes Programme (AHP) over four years represents huge progress on the days when it seemed like there would be no AHP at all. True, the government has titled the balance slightly more towards social rent and Right to Buy replacements. But this is still a fraction of what is required and the AHP been badly eroded by inflation.

And so much of the baleful legacy of 2010 to 2016 is still in operation and yet to be unravelled. As Inside Housing reported last week, affordable rent is now generating rents at double social rent levels in some areas. Pointedly, the biggest gap of all is in the Surrey Heath constituency of Michael Gove, where the rent on a three-bed affordable rent home is £1,125 a month compared to £557 a month at social rent.

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Gove’s confession only goes so far

Posted: April 12, 2023 | Author: | Filed under: Housing associations, Planning, Regulation, Social housing, Tenants | Leave a comment

Originally written as a column for Inside Housing.

If it’s broken, who broke it? If there were mistakes and errors, who made them?

It was quite an Easter week for Michael Gove as he moved into confessional mode first in a think tank report and then in a Today programme interview.

‘That the current housing model– from supply to standards and the mortgage market – is broken, we can all agree,’ the housing secretary wrote in an introduction to the report from Bright Blue and Shelter. ‘That change is necessary is undeniable. We are bringing about change – and we are determined to see it through.’

And, asked on the Today programme on Thursday (listen from 08:12), if he had gone through ‘an awakening’ on housing, he said that: ‘The thing that affected me most was the Grenfell fire. What the Grenfell inquiry, in particular, has subsequently brought to light were a chain of errors. I’m very happy to reiterate that there were some mistakes and errors that were made not just by the coalition government but by governments before which contributed to social tenants not getting the support that they deserve, not having their voices heard. And so change had to come and we are delivering that change.’

Note that Mr Gove leaves us with the same key message: others made the mistakes that broke the housing model and now he is here to fix things.

Some of what he’s saying is quite true – he has reversed much of the deregulation of the past – but the interview still begged more questions.

What exactly was he admitting to – and how much of the blame was he really taking for himself and his Conservative colleagues?

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What’s gone wrong with our housing – and what could go right

Posted: April 4, 2023 | Author: | Filed under: Private renting, Right to buy, Social housing | Tags: , , | Leave a comment

As symbols of failure, take a former council house in south London chopped up into six bedsits, housing association tenants waiting in vain for repairs and private renters searching non-stop for homes

As a symbols of success, take Vienna’s century of genuinely affordable rents, Barcelona’s long-term housing strategy and Singapore’s melding of the market and public ownership.

The Rental Health series stretching across BBC radio and television had all of that and more, from lots of jobs but no homes in the Highlands to the dire state of the rental market in Yorkshire to the mechanics of local housing allowance and Section 21 to people looking for housing alternatives in vans, co-housing and boats.

Those symbols of failure don’t come much starker than the three-bedroom council house on the Bampton estate in Forest Hill featured in the brilliantly appalling BBC Panorama documentary What’s Gone Wrong With Our Housing?

The first tenant moved into the home in 1971, bought it under the right to buy for £15,000 in 1984 and sold it for £85,000 in 1988. It is now owned by a private landlord who has converted it into six bedsits rented out for £960 a month each.

Most of what amounts to £60,000 a year in rent is paid in housing benefit by the government that sold it for a quarter of that.

As if that was not enough to make the point, the same private landlord has done the same thing to three other houses in the same terrace and is pocketing £250,000 a year.

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