10 things about 2016: part one
Posted: December 23, 2016 Filed under: Brexit, Europe, Home ownership, Housebuilding, Housing associations | Tags: Housing and Planning Bill Leave a commentOriginally published on December 23 on my blog for Inside Housing
It was a year that fell neatly into two halves: before and after everything was turned upside down. The vote for Brexit on 23 June transformed politics, and the complete change of government and ministers has shifted priorities that had seemed set in stone until 2020.
But as some things change, others remain very much the same. Here’s the first of my two-part look back on the things I was blogging about in 2016.
1. Ambitions for new homes
The year began with what David Cameron hailed as a “radical new policy shift for housing”. The prime minister said that “for the first time in more than three decades” the government would directly commission homes itself on public land, giving priority to small builders. It was a welcome move but it was hard not to think of previous housing strategies that turned out not to be as “radical and unashamedly ambitious” as he claimed.
Cameron’s commitment to a million new homes by 2020 – or 200,000 a year for five years – seemed to be exactly that when the government’s own housebuilding figures showed completions running at around 140,000 a year. However, in May I questioned whether the target was really as ambitious as it seemed. It was already becoming clear that ministers were using higher figures for the net additional supply of homes as their yardstick. The total for 2015/16, the first of the five years, was just 10,000 short of the 200,000 a year benchmark.
An influential House of Lords committee gave short shrift to a claim by Brandon Lewis that the housing plans were “very ambitious”. It called instead for 300,000 new homes a year, backed by a series of radical changes to policy on investment, planning and tax.
2016 ends with Lewis in a different job, Cameron out of a job and the promise of yet another housing plan. The White Paper will no doubt be equally as ‘ambitious’ when it is finally published but the signs are that this one will have fewer adjectives and more substance.
Homes and votes
Posted: September 5, 2016 Filed under: Home ownership, Rent to buy | Tags: Renewal, Rent to buy 2 CommentsOriginally posted on September 5 on Inside Edge 2, my blog for Inside Housing
Could rent to buy be the basis of a housing policy that helps deliver Theresa May’s ‘country that works for everyone’?
That’s the bold claim in a new report from Conservative think tank Renewal that calls for a radical reset of the Tories’ ambitions.
The aim is overtly political. As author David Skelton explains on Conservative Home, it is to broaden the appeal of the Conservatives to working class voters and voters outside of the South East. In a nutshell it is to capture the votes of people on low incomes by offering a housing counterpart to the national living wage.
However, while Homes for All (PDF here) is presented as being in the Tory tradition of Macmillan and Thatcher, it is also an admission that current Conservative plans do not work ‘for everyone’. Starter homes and shared ownership, the big winners from the spending review and Housing and Planning Act, are unaffordable for people on low incomes in most of the country.
Going lower
Posted: August 4, 2016 Filed under: Home ownership, Mortgages, Tax | Tags: Bank of England, Interest rates, Theresa May Leave a commentOriginally posted on August 4 on Inside Edge 2, my blog for Inside Housing
Record low interest rates have been great for people with mortgages but terrible for the housing system as a whole.
Like the Bank of England’s decision in March 2009 to cut the base rate to 0.5%, Thursday’s further reduction to 0.25% is motivated by concern about the economy as a whole. But nobody imagined in 2009 that seven and a half years later interest rates would still be as low, still less even lower.
The result has been severe distortion in the housing market. What was only meant to be a temporary fix has instead become a semi-permanent feature of the system that has benefitted home owners and landlords at the expense of everyone else. The effect of Thursday’s small cut will be limited in itself but it means that effects of the low rate regime will be with us for much longer.
Peer review
Posted: July 15, 2016 Filed under: Council housing, Home ownership, Housebuilding, Tax | Tags: House of Lords Leave a commentOriginally published on July 15 on Inside Edge 2, my blog for Inside Housing
Take your pick: targets for new homes are much too low; the private sector cannot deliver them; and policy is too focussed on home ownership.
A report published on Friday by the all-party economic affairs select committee of the House of Lords does not so much criticise the government’s approach to building more homes as skewer it.
And one of the clearest explanations I’ve yet read of why current policy cannot, and will not, work does not come from just any old committee. The group of Conservative, Labour, Lib Dem and Crossbench peers includes two former chancellors of the exchequer (Lords Lamont and Darling) and two former permanent secretaries of the Treasury (Lord Burns and Lord Turnbull) with more cabinet ministers, senior mandarins, special advisors and business people also in the mix. They are drawing on decades of experience of previous failures in housing policy.
The report is also brilliantly timed, just at the point when Theresa May’s new government is getting down to work and preparing for life after the referendum and George Osborne’s budget surplus targets.
May day
Posted: July 12, 2016 Filed under: Home ownership Leave a commentOriginally published on July 12 on Inside Edge 2, my blog for Inside Housing
Where does housing fit into Theresa May’s vision of ‘a country that works for everyone’.
The home secretary launched her campaign for the Conservative leadership with a speech in Birmingham on Monday. Within two hours she was certain to be prime minister. And by Wednesday night she will be in Downing Street.
Whether Monday’s events were choreographed with Andrea Leadsom or not, May’s speech sounded like one made by a leader in waiting. So much so that, as many people have noted, the bits about predatory capitalism and the cost of living read like they were lifted from one of Ed Miliband’s speeches before the 2015 general election.
After six years at the Home Office, May is still something of an unknown quantity on housing. A speech from 2013 that was widely seen as positioning herself to run for leader did not even mention the word.
The Birmingham speech fills in some but not all of the blanks – and once you strip away the rhetoric it begs all sorts of questions about how much she will really change.
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Jules Birch 