What does ‘good’ look like?
Posted: April 25, 2024 Filed under: Affordable housing Leave a commentOriginally written as a column for Inside Housing.
What should we be aiming for in housing policy? Read just about any government’s green or white paper published over the last 30 years and the answer will be something like ‘decent homes for everyone at a price they can afford’.
If that sounds straightforward, achieving it has proved to be anything but. For every lofty pronouncement like that made over the decades, the housing options available have become less decent, more insecure and more unaffordable.
So what should ‘good’ look like – and how can we get there? Homes for All, a report out this week from the Church of England and Nationwide Foundation sets out to provide some of the answers.
Most of these are not rocket science. The objectives of building more homes, especially more for social rent, making existing homes more energy efficient, increasing the options available for an ageing population and reducing homelessness to a bare minimum would appear in most of our lists of desired outcomes.
But considering them all together as part of one housing system throws up some hard choices that are too often ducked by policy makers.
Read the rest of this entry »Autumn Statement brings good news (for now) on LHA
Posted: November 23, 2023 Filed under: Affordable housing, Local housing allowance, Permitted development, Temporary accommodation | Tags: Autumn Statement Leave a commentOriginally written as a column for Inside Housing.
The good news in Jeremy Hunt’s speech is that the government has finally listened to all the arguments about soaring rents, evictions and homelessness and Local Housing Allowance (LHA) rates will be linked to private rents again from next April.
The bad news buried in the background documents to his Autumn Statement is that rates will be frozen again for the four years after that, recreating the shortfalls between housing benefit and rents for tenants and generating all the costs of homelessness that led to the lifting of the freeze in the first place.
It’s not much of a way to run a benefits system or a housing system but it is entirely in keeping with an Autumn Statement characterised by even more smoke and mirrors than a usual Budget.
That’s amply demonstrated by the most headline-grabbing measure: the cut in National Insurance will not actually mean a tax cut for households hit by a continued freeze in the thresholds for income tax, although it does at least benefit workers (who pay NI and income tax) rather than landlords and shareholders (who only pay income tax).
And the cuts in NI and business tax are made possible in the first place by more sleight of hand: as the accompanying report from the Office for Budget Responsibility reveals, they only add up thanks to unfeasibly large cuts in public services and a freeze (aka significant real terms cut) in capital spending after the next election.
Needless to say that leaves next to no room for investment in new social homes or the decarbonisation of the existing stock even though the real value of both continues to be squeezed by inflation.
Instead, beneath the surface of the statement, there are signs of a desperate search for policies that are not affected by the squeeze on public spending.
Read the rest of this entry »State of the housing nation
Posted: March 28, 2023 Filed under: Affordable housing, Bed and breakfast, Local housing allowance, Social housing | Tags: UK Housing Review Leave a commentOriginally written as a column for Inside Housing.
So where next? The publication of the UK Housing Review this week is a chance to take stock and ask where the housing system may be heading.
The sense is one of considerable flux, for home ownership as the housing market downturn continues, for private renting as the momentum behind increased regulation grows and for social housing as landlords face competing demands for scarce resources.
The paralysis of policy signalled by a Budget that mostly ignored housing could be just a temporary lull ahead of a UK general election.
As ever, the review puts all that into context. For starters, John Perry’s chapter on housing expenditure shows where total government support (in grants, loans and guarantees) for housing is going. The balance between the private market (59 per cent) and affordable housing (41 per cent) may not be quite as skewed as it was in the heyday of Help to Buy but it is still tilted in one direction.
The good news is that public spending on affordable homes has risen in real terms since the dark days of the coalition government. Investment under three Affordable Homes Programmes is set to peak this year – but the looming cliff edge is an indication of the big decisions that lie ahead:
Current spending plans (as in the Budget) rely on eye-watering (and unrealistic) austerity after the next election so that they comply with the chancellor’s fiscal rules. Key decisions lie ahead in the spending review after the next election regardless of who wins.
What is getting built is also skewed. There were 59,175 affordable housing completions in England in 2021/22, the highest for 11 years. However, more than 20,000 of those were for affordable home ownership and 28,000 for affordable rent, leaving just 7,528 for social rent (plus another 3,080 for similar London Affordable Rent).
Contrast that with Scotland, which managed 9,757 affordable completions in 2021/22 including almost as many social rent homes (7,306) despite having a population about a tenth of England’s.
Read the rest of this entry »Downturn is a chance for a reset – but will the politicians take it?
Posted: February 27, 2023 Filed under: Affordable housing, Housing market Leave a commentOriginally written as a column for Inside Housing.
Housing market downturns are often dominated by debates about their consequences – whether they be falling house prices and negative equity, arrears and repossessions or builders going bust – and what to do about them.
But an important new report from the Joseph Rowntree Foundation argues that we should be thinking less about house prices and the immediate response to the downturn and more about the housing system as a whole and the long-term opportunities for a reboot.
We are already in a downturn even if the shape of it remains unclear. Toby Lloyd, Rose Grayston and Neal Hudson consider different scenarios ranging from back to normal (rising prices) to an outright crash but think market stagnation is the most likely outcome.
That may sound mild when seen in terms of house prices alone but the consequences would be dire: home ownership would remain inaccessible, driving up private rents and making it even more of a struggle for low-income households to keep a roof over their heads.
Arguably we are already seeing stagnation in housebuildling as the big developers slow down development and the industry as a whole warns that completions could fall to less than half their pre-pandemic peak while blaming government regulations.
The conventional response would be to support supply and boost demand but that would be very much like a rehash of what happened after 2010, when various forms of Help to Buy did increase housebuilding but also produced a boom in housebuilders’ profits, share prices and bonsues without much quid pro quo.
For all the efforts to boost the home ownership chances of first-time buyers, the private rented sector continued to grow. And millions of people in housing need were the losers as austerity put the squeeze on social rent and forced housing associations into affordable rent and market sales.
Read the rest of this entry »How would a robot fix the housing crisis?
Posted: February 16, 2023 Filed under: Affordable housing | Tags: ChatGPT, Housing crisis Leave a commentOriginally written as a column for Inside Housing.
Question: Is there a housing crisis in the UK?
‘Yes, there is a housing crisis in the UK. The housing crisis in the UK is characterized by a shortage of affordable housing, high house prices, and a lack of social housing. This has led to an increase in homelessness and people being unable to afford to buy or rent a home. The crisis is driven by a number of factors including population growth, lack of new home building, and government policies that have favored homeownership over renting.’
As you may have guessed, it wasn’t me that wrote the last paragraph. The clues are, I hope, there in the plodding prose style and the American spellings.
The author was actually ChatGPT, the artificial intelligence chatbot that has workers anxious for their jobs and schools and universities fearing that essays will be written by robots rather than students in future.
The bot goes on: ‘The crisis has been exacerbated by the COVID-19 pandemic, which has led to job losses and economic uncertainty, making it harder for people to afford housing. The situation is particularly dire in London and other major cities, where housing is in high demand and prices are particularly high. The crisis is not only affecting low-income households, but also the middle-class families and young people. This is making it harder for them to access decent and stable housing.’
If that feels a bit out of date (the pandemic has arguably contributed to the opposite problem of labour shortages), it seems a reasonable summary if you accept that longstanding structural issues that we have done next to nothing to address can reasonably be described as a ‘crisis’. ChatGPT does at least get that the problem goes across incomes.
But what would the robot do about this, I wondered.
Read the rest of this entry »The decline and fall of Trussonomics
Posted: October 18, 2022 Filed under: Affordable housing, Economics, Levelling up, Planning, Section 21 Leave a commentOriginally written on Tuesday October 18 (before the resignation of Liz Truss) as a column for Inside Housing.
Growth, growth, growth? Little survives of Trussonomics after a series of astonishing u-turns but in housing at least is still seems to be half-steam ahead.
Just two of the tax cuts announced by former chancellor Kwasi Kwarteng in his statement last month and only because the legislation for them had already gone through parliament.
The scrapping of the health and social care levy obviously begs big questions about funding for both but the increase in stamp duty thresholds now looks even more of a spare part than it did at the time.
While stamp duty is fundamentally a bad tax because it inhibits transactions, cutting it without wider reform of property taxation benefits sellers more than buyers as savings are capitalised into higher prices.
Cutting it permanently now rules out what has always been the first lever the Treasury pulls in a housing market downturn: a stamp duty holiday.
Even on the Treasury’s own figures, it will only generate an extra 29,000 house moves a year. But the limited growth in the wider property sector this generates will come at a cost to the taxpayer of £7 billion over the next five years.
New chancellor Jeremy Hunt has signalled that ‘eye-watering decisions’ about spending cuts and tax rises are on the way, mortgage costs have soared since the not a Budget and the energy price guarantee is now only guaranteed until April.
With even the pensions triple lock not guaranteed, the battle that was already looming over the uprating of benefits next year will now be even more intense.
Further freezes in the benefit cap and – despite rising rents – local housing allowance look more likely with devastating consequences for poverty and homelessness.
All this will be the acid test of Hunt’s promised return to ‘core compassionate Conservative values’.
The implication of the fiscal position for the Department of Levelling Up, Housing and Communities must be that any budget that is not already nailed down is up for grabs.
Read the rest of this entry »
Jules Birch 