10 things about 2017: part two

Originally published as a column for Inside Housing on December 27.

This second part of my look back at the year in housing starts with the return of the S word and asks how much has really changed. Part one is here.

6) The year of social housing?

The Grenfell fire intensified a debate about the future of social housing that was already underway.

Under David Cameron and George Osborne, the government had relentlessly boosted the right to buy and pursue ‘affordable’ rather than the social housing they saw as a breeding ground for Labour voters.

The year began with an announcement of first wave of part of their legacy, the starter homes that critics warned would displace other affordable homes.

However, the tide was turning against that type of politics. Away from Westminster, protests about estate regeneration (and loss of social housing) had spawned Dispossession, a documentary shown in cinemas across the country.

But the impact was evident inside the village too. When Theresa May called a snap election her manifesto featured plans for ‘a new generation of social housing’. The reality has never quite matched the rhetoric but to hear a Conservative prime minister mention the S word was a change in itself.

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Who owns Britain?

Originally posted as a column for Inside Housing on November 29.

What happens to the huge wealth generated by soaring house prices is a crucial issue not just for housing but also for the future of Britain.

The Office for National Statistics puts the value of unmortgaged housing equity at just under £4 trillion and second only to pension wealth of £4.5 trillion in total personal wealth of £11.1 trillion.

Savills estimates unmortgaged equity at over £5 trillion and says housing is now the single biggest source of wealth in the country and a report today by the Halifax says the total value of the UK housing stock has passed £6 trillion for the first time.

Whatever the number you put in front of those 12 zeros that is a serious amount of money- the UK’s national debt is currently worth £1.8 trillion.

As by far the most visible divide between baby boomers like me lucky enough to have been born and buy houses at the right time and millennials born at the wrong time and stuck in the wrong housing tenure, housing dominated an event on wealth inequality that I went to in Bristol recently.

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The long-term consequences of falling home ownership

A report today from Generation Rent predicts that the number of pensioner private renters will increase by 169% in England over the next 20 years at a cost of an extra £3.5bn in housing benefit.

The increase will come as a result of trends already hard-baked into the housing system and they have nothing to do with the people in their 20s and 30s that we are used to thinking of as Generation Rent.

Successive editions of the English Housing Survey (EHS) have shown that falls in home ownership are rippling up through the age bands as existing private renters get older and find themselves unable to buy.

The report by David Adler of Oxford University and Dan Wilson-Craw of Generation Rent looks at the current EHS, Office for National Statistics and housing benefit data to forecast what will happen by 2035/36.

There are currently 1.1 million private renter households aged between 45 and 64 who will reach retirement age in the next 20 years. Some of them will still be able to buy but on current trends 947,000 will be private renters into retirement.

Add another 50,000 current retiree households who will live into their 80s and you have a million who could be reliant on insecure short-term tenancies and potentially dependent on housing benefit. That could translate into an extra £3.5bn on top of the current housing benefit bill.

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May dedicates her premiership to fixing housing

Originally posted as a column for Inside Housing on October 4.

You wait a lifetime for a prime minister to make housing their priority and then she gets her P45 while losing her voice with the conference set falling apart behind her.

With all that happening around her it was easy to ignore the substance of Theresa May’s speech.

You may have missed it between coughs but for the first time since the 1950s here was a prime minister promising to put housing at the heart of their premiership.

And here was a Conservative prime minister not just promising an extra £2bn for ‘affordable’ housing but even allowing bids for social rent too.

But as the letters slowly dropped off the conference slogan about ‘BUILDING A COUNTRY THAT WORKS FOR EVERYONE’ you wondered how long she will have a premiership to put anything at the heart of.

And even then it is hard to avoid drawing the obvious conclusions from the comparison between an extra £2bn for affordable housing and an extra £10bn for Help to Buy.

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The state of owner-occupation

Originally published as a column for Inside Housing on September 5.

The decline of owner-occupation in England resumed in 2015/16 after a brief uptick in the previous year.

The English Housing Survey shows that owner-occupation as a whole fell below 63% to return it to levels last seen in 1985, when the Right to Buy and Margaret Thatcher’s drive for a property-owning democracy were in full flow. The ownership rate is now down eight percentage points on its peak in 2003.

However, even that conceals the full scale of the decline. Owner-occupation is made up of two very different groups – people who own their home outright and those who are buying with a mortgage – and the split between them has changed radically over time.

Here are some key points that I picked out from the English Housing Survey for 2015/16:

1) Owning’s rise…

Outright ownership is still rising as people who first took out a mortgage 25 years or more ago pay it off. From 25% of households (4.5 million) in Mrs Thatcher’s heyday, it has grown to overtake mortgaged ownership two years ago and reach 34% (7.7 million) in 2015/16.

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Simple ‘solutions’ plague our thinking about housing

Originally published as a column for Inside Housing on August 29. 

‘What makes the housing crisis so maddening is that there is a simple solution: Britain needs to get building.’

So ran a tweet a couple of weeks ago from The Economist about an article on How to Solve Britain’s Crisis. Unleash the market, build on the green belt and, hey presto, the housing crisis is over.

In fairness, the article’s proposition was a bit more complicated than the tweet implied – it also proposed reform of stamp duty and council tax – but it is still an illustration of the way that ‘simple solutions’ plague our thinking about housing.

What I mean by that is that there may well be good arguments that can be made for building on the green belt, or rent control, or building a million council houses, or prefabrication or any of the other quick fixes that are routinely trotted out.

It’s certainly hard to see a solution that does not involve more homes, better conditions for private renters, a greater role for local authorities and innovations in construction.

However, it’s quite different when one of them is proposed as the solution. Usually this is by one of the ‘unleash the market’ brigade who believe that the housing crisis is all down to planning.

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A system under strain

Originally published as a column for Inside Housing on August 17.

Beneath the immediate crisis about a lack of new homes lies a long-running one about the homes that we have already built.

It’s hard to look much beyond the stat in a report published on Friday by the Local Government Association (LGA) that new homes built today will have to last 2,000 years at current rates of demolition and replacement.

Unless the output of the likes of Barratt and Taylor Wimpey is really going to stand for as long as some of the glories of Ancient Rome, something clearly does not add up. This graph shows the age of the stock broken down by tenure:

The report by Residential Analysts finds that large numbers of homes across all tenures are not of appropriate quality, with the private rented sector representing the biggest cause for concern, with problems such as damp and poor energy efficiency concentrated in the oldest stock.

The number of homes failing to meet the Decent Homes standard has been improving in recent years total cost of bringing them up to scratch is still estimated at £27 billion, of which just £2 billlion is for social housing.

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