Behind the Spending Review’s smoke and mirrors
Posted: October 28, 2021 Filed under: Affordable housing, Fire safety, Homelessness, Housebuilding | Tags: Spending Review 2021 Leave a commentOriginally published as a column for Inside Housing.
This was a spending review that didn’t really feel like a spending review as far as housing is concerned.
It’s the first multi-year review since 2015 but compare it to the austerity seen then and in 2010, the cuts of 1998 and even the relative largesse of 2007 and it seems to contain little that is really new.
Aside from what is claimed to be an additional £1.8 billion for brownfield land, almost everything in it has already been announced, in some cases several times.
The 2021 spending review (SR21) ‘confirms’ £5 billion for cladding removal and ‘reconfirms’ £11.5 billion for the Affordable Homes Programme alongside an existing £10 billion for housing supply but the numbers in it play fast and loose with the difference between the five years of this parliament and the three covered by the review (2022/23 to 2024/25).
A classic example is the claim in the Red Book that: ‘SR21 demonstrates the government’s commitment to investing in safe and affordable housing by confirming a settlement of nearly £24 billion for housing, up to 2025-26.’ Rishi Sunak also used this impressively large number in his Budget speech.
Read the rest of this entry »New secretary of state, same old problems
Posted: September 16, 2021 Filed under: Fire safety, Levelling up, Planning | Tags: Robert Jenrick 1 CommentOriginally written as a column for Inside Housing.
So it’s farewell to Robert Jenrick and time to ‘welcome’ a new housing secretary in Michael Gove.
The removal of Mr Jenrick is not a great surprise given a record that includes Westferry, failure to fix the building safety crisis and a flagship policy on planning reform that seems to be sinking.
Still more so when he ranked third bottom in Conservative Home’s survey of grassroots Tories on how they see members of the Cabinet. Only Gavin Williamson (sacked) and Amanda Milling (demoted) were less popular than him.
But he also got more money out of the Treasury for building safety than either of his two predecessors and that unpopularity may deserve more respect if it was based on nimby opposition to his planning reform agenda to deliver more homes
The former housing secretary was an early supporter of Boris Johnson and was loyal to the point of defending government policies on the Sunday morning talk shows that were scrapped in u-turns an hour later.
But loyalty is not always what counts in politics and as if to prove the point he is replaced by Michael Gove, the man who famously stabbed Johnson in the back in the 2016 Tory leadership contest.
The former Chancellor of the Duchy of Lancaster is the longest-serving current cabinet minister and brings with him cross-departmental clout that will include driving forward the manifesto commitments to deliver 300,000 new homes a year by the mid-2020s and end rough sleeping by the end of this parliament
He was the shadow housing minister before Grant Shapps so he will be familiar with the issues and the main players and he will get an early reminder today of the biggest new issue in his in-tray when leaseholders and building safety campaigners hold a rally in Westminster.
However, such an apparently known quantity still leaves plenty of questions about what his priorities will be and he retains a capacity to surprise (not least on the dance floor).
He comes with a reputation for delivery forged in the Cabinet Office but while some of this morning’s papers see his new job as central to the government’s mission to level up, others see it as a demotion or disappointment compared to his hopes of higher office.
Read the rest of this entry »Latest attempt to end fire safety crisis leaves more questions than answers
Posted: July 30, 2021 Filed under: Fire safety, Leasehold | Tags: Robert Jenrick 1 CommentOriginally 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.
Read the rest of this entry »Four years of broken promises
Posted: June 16, 2021 Filed under: Construction industry, Fire safety, Housebuilding, Leasehold Leave a commentOriginally published as a column for Inside Housing.
Four years on from Grenfell and a solution to the fire safety crisis looks further away than ever.
The litany of broken ministerial promises highlighted by Pete Apps in his analysis this week only adds to the impression of abject government failure and of a crisis that continues to escalate faster than its fumbling attempts to tackle it.
From James Brokenshire’s ‘expectation’ of ACM remediation by June 2020 to Lord Greenhalgh’s ‘ambition’ that it should be completed this year, even the programme most directly related to Grenfell keeps slipping into the future.
And despite Theresa May’s pledge that ‘we cannot and will not ask people to live in unsafe homes’ to Boris Johnson’s promise that ‘no leaseholder should have to pay’, thousands are doing and facing exactly that.
In mitigation they could plead that in June 2017 hardly anyone expected things to escalate to the stage where it seems that virtually any residential block built in the last 25 years has come under suspicion.
The public inquiry has rightly concentrated on the causes of the fire and the run-up to that night in June 2017 but it was clear even at the time that the problems went well beyond the refurbishment of one tower block and the actions of one landlord and council.
Evidence revealed at the public inquiry has amplified those wider concerns many times over – but so far the government has not even kept its promises to implement the inquiry’s initial recommendations.
Read the rest of this entry »A not so humble address
Posted: May 27, 2021 Filed under: Fire safety, Home ownership, Planning, Private renting, Section 21 Leave a commentOriginally a column for Inside Housing.
Affordable and safe housing for all’. Who could argue with that?
Pretty much everyone, funnily enough, because this was the title of the housing part of the House of Commons debate on the humble address following the Queen’s Speech.
Catching up with last week’s debate, two things struck me really powerfully: first, just how much politics has been turned on its head; and second just how riddled with contradictions the government’s position on housing really is.
In the post-Brexit and (hopefully) post-Covid world, the more that the blanks in the empty slogan of levelling up are filled up, the clearer the first becomes.
Read the rest of this entry »Guarantees, cladding and the housing market
Posted: April 20, 2021 Filed under: Fire safety, Housing market, Mortgages, Stamp duty Leave a commentOriginally published on April 20 on www.insidehousing.co.uk.
The housing market is at a frenzied record high as house prices rise by more than 2 per cent in a single month.
Just the moment then for the government to step in with a scheme to guarantee 95 per cent mortgages for anyone who thinks they have to climb the ladder before it disappears out of reach.
The house prices in question are only asking prices as recorded by Rightmove but the £6,733 average increase between March and April reflects a rush to beat the end of the stamp duty holiday and demand for more space from people who have done well during the pandemic.
It’s now 13 months since the start of the pandemic and, to pick another measure, house prices are up by around £16,000 or more than 7 per cent since then, according to the Nationwide.
Prices initially fell amid the economic uncertainty but surged again on the back of the stamp duty holiday introduced by chancellor Rishi Sunak last July and then extended in March.
The overwhelming beneficiaries are people who already own homes who have been able to sell them for higher prices that now wipe out the stamp duty savings for most buyers. For all the rhetoric about helping people on to the housing ladder, few first-time buyers saved much in stamp duty and all now face having to spend considerably more in total.
The mortgage guarantee scheme, essentially a rehash of one part of Help to Buy, should help them by addressing a genuine problem with the supply of high loan-to-value mortgages.
However, lenders are cautious. The Financial Times reported on Saturday that the largest banks are refusing to lend on new builds under the scheme and that they may also charge higher rates and apply stricter affordability criteria.
From their point of view that makes sense to guard against falling prices, especially when they factor in the new-build premium that adds around 10 per cent to the cost of a new home. .
And the benefits look dubious for first-time buyers too. Based on the Nationwide index, a 95 per cent loan on home at the current average price would be £220,000 – more than the total price was when the stamp duty holiday was first announced.
None of this makes any sense and yet, in an under-supplied and under-taxed housing market fuelled by credit and low interest rates, somehow it does.
As memories fade of the housing market crash of the early 1990s and the downturn after the financial crisis, the logical next step would be a relaxation in affordability checks on mortgages to allow loans at larger income multiples, ignoring the lessons of the 2000s and the economic headwinds that could lie ahead as furlough ends.
But all of this is happening at the same time as the entire market for recently built flats remains mired in the continuing fall-out from the fire safety crisis.
Inside Housing reported on Friday on cases of leaseholders buying flats on the basis of External Wall System (EWS) form declaring that their cladding was safe only for new inspections to decide that it must be removed.
One buyer purchased a £350,000 flat rated A1 and safe in February only for the EWS to be downgraded to B2 just 34 days later. That made her flat worthless and left her facing costs for waking watch and cladding remediation.
If the EWS rating can be changed at the drop of a hat like this, why would anyone risk buying a recently built flat?
The government has grudgingly and in stages committed a total of £5.1 billion to fixing the cladding crisis so far and it has announced some welcome reforms to leasehold.
But leaseholders in buildings below 18m are only eligible for loans and help does not apply to other fire safety problems, leaving a significant chunk of the housing market in limbo.
The fact that at the same time the government has spent £5.4 billion on the stamp duty holiday says it all about where its priorities really lie.
The problems with Johnson’s housing priorities
Posted: October 6, 2020 Filed under: Decarbonisation, Fire safety, Mortgages, Stamp duty Leave a commentOriginally written as a column for Inside Housing on October 6.
You are prime minister. You have £5.8 billion to spend on housing. What do you do?
Before you answer there is a catch. You are a Tory prime minister. So this has to be all about home ownership.
This is not about the Affordable Homes Programme either – although the modest increase in that is tilted towards home ownership too.
You may have guessed by now that this is about decisions already taken by Boris Johnson’s chancellor Rishi Sunak, decisions that are looking worse and worse the more time goes on.
That thought was prompted by the only ‘new’ idea that I’ve seen emerging from the Conservative Party conference: a plan to create ‘Generation Buy’ by encouraging low-deposit mortgages to help young people on to the housing ladder.
The idea revealed by Mr Johnson in a Telegraph interview on Saturday is not especially new – essentially it’s a rehash of the mortgage guarantee part of Help to Buy and it harks back to the days when Gordon Brown wanted to encourage long-term, fixed-rate mortgages – and it seems to be inspired by a report published by the Centre for Policy Studies last month.
Read the rest of this entry »Facing up to the cladding crisis
Posted: September 7, 2020 Filed under: Construction industry, Fire safety, Leasehold Leave a commentOriginally published on September 7 as a column for Inside Housing.
All through the cladding saga, the government has dragged its feet and resisted spending money before finally being forced to act.
Think back to the way ministers resisted any kind of fund for replacement of Grenfell-style ACM cladding, then insisted private building owners should pay, then denied the need for any help for non-ACM cladding and you see a pattern repeating itself.
It took the government almost a year after Grenfell to announce a £400m fund for the removal of ACM on social housing blocks, almost two years to find £200m for private blocks and almost three years to announce the £1bn Building Safety Fund for the removal of non-ACM cladding.
All this while the cladding scandal continued to escalate, dragging in more and more blocks and more and more residents and eventually wrecking the whole market in recently built flats.
Read the rest of this entry »
Jules Birch 