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 »Budget leaves housing frozen out
Posted: March 15, 2023 Filed under: Budget, Devolution, Energy efficiency, Local housing allowance Leave a commentOriginally written as a column for Inside Housing.
In a Budget where everything had to begin with E there was little hope for housing.
Neither Rishi Sunak’s economic priorities nor Jeremy Hunt’s e-list (enterprise, employment, education and everywhere) left much room for an issue on which the Conservatives appear to have given up.
On energy, there was good news for tenants on pre-payment meters and for everyone with the extension of the price guarantee.
However, there was no more support for a policy that would do more than anything else to reduce dependence on unreliable overseas energy supplies and Vladimir Putin.
Investment in the decarbonisation of existing homes would cut energy demand at the same time as it cut carbon emissions and bills for tenants and home owners and delivered on the government’s new priority of energy security.
Energy efficiency even begins with the right letters but that either counts as a double negative or was quietly forgotten.
Read the rest of this entry »Waiting for renter reform
Posted: February 9, 2023 Filed under: Local housing allowance, Private renting, Section 21 Leave a commentOriginally written as a column for Inside Housing.
Take your pick. Section 21, housing benefit, tax, net zero, standards, Covid, the courts, mortgage rates, tenants.
All of them reasons why there will be an exodus of landlords and homes from the private rented sector if you believe what you read in certain newspapers. All of them are one more nail in the coffin of buy to let.
One or more of those reasons will be quoted in every article about landlords selling up but, though there may be an element of truth to some of them, few will stop to point out that the party lasted for years. I don’t remember many landlords cutting their rents when mortgage rates fell to record lows after 2009 or complaining about the capital gains they’ve made since.
What matters, as MPs on the all-party Levelling Up, Housing and Communities Committee points out in a report published today [Thursday] is who buys the homes that landlords are selling.
Properties sold to another private landlord, or perhaps to a local authority or social landlord, are still available for rent. Those sold into owner-occupation will reduce demand for rentals if the new owner was previously a renter.
The really damaging destination is when homes for rent are sold, or converted, into short-term holiday lets and that means that the Westminster government must go further than tentative plans for registration.
That’s a powerful reminder that reforming the private rented sector is about much more than ‘greedy landlords’ or a ‘war on buy to let’ and that any new system has to balance different interests and demand from different groups for decent homes to rent.
Read the rest of this entry »Four decades of failure
Posted: January 19, 2023 Filed under: Housing benefit, Rent control, Social housing Leave a commentOriginally written as a column for Inside Housing.
Why has housing become so unaffordable over the last 40 years?
The answer, according to new report for the Joseph Rowntree Foundation (JRF), is cuts in housing subsidy that represent ‘a massive shift in who pays market housing costs, from government and landlords onto tenant’ since 1979.
It’s the scale of the shift, rather than the shift itself, that is striking.
Back at the start of Margaret Thatcher’s first term, social and private renters alike were paying around 10 per cent of their incomes on rent. By 2020 that had risen to 25 per cent for social renters and 30 per cent for private renters.
The shift is represented in a graph that Ian Mulheirn, who co-authored the report with colleagues James Browne and Christos Tsoukalis from the Tony Blair Institute for Global Change, calls ‘one of the most striking’ in public policy:
They calculate that if housing subsidies had been maintained at 1979 levels as a share of total housing costs they would have been worth £45 billion 2019/20 rather than the actual £31 billion.
This ‘generational housing costs squeeze’ is the result of massive change in three elements of housing subsidy: social housing; housing benefit; and rent controls.
That is the result of the accumulation of many different policies over time: cuts in investment in council housing and higher council rents; private finance and higher housing association rents; the deregulation of the private rented sector; and rapid increases in housing benefit to ‘take the strain’ of all that followed by the cuts imposed under austerity.
Read the rest of this entry »Johnson’s lame cover version
Posted: June 10, 2022 Filed under: Home ownership, Housing associations, Housing benefit, Mortgages, Right to buy 1 CommentOriginally published as a column for Inside Housing.
How exactly should we take Boris Johnson’s plans to ‘bring back Right to Buy’ and ‘turn Generation Rent into Generation Own’?
Many housing association tenants will welcome the chance to own their own home and private renters may welcome official recognition that they are stuck paying more in rent than for the mortgage they can’t get.
Equally, most social landlords will feel that they have no choice but to take very seriously a major change for housing associations and what could be yet another threat to council housing.
And anyone with even the vaguest interest in seeing more genuinely affordable homes will greet the latest guff about one for one replacements with a groan.
But it’s also very hard not to be cynical about this latest cover version of Margaret Thatcher’s number one from the 1980s. The suspicion is that this is all about a lame duck prime minister having something catchy to announce regardless of how – or even if – it will work out in practice.
Even so it’s impossible not to wonder about the practicalities of a plan to finance mortgages from housing benefit in the middle of a cost of living crisis, with interest rates about to rise at the peak of a housing market bubble that could be about to burst.
And it’s hard not to contrast Boris Johnson’s tired old rhetoric about social tenants on housing benefit being ‘dependent on the state’ with the plans announced just 24 hours earlier for a Social Housing Regulation Bill that will ‘mean more people living in decent, well looked-after homes enjoying the quality of life they deserve’.
Calling the plan ‘benefits to bricks’ looks like trolling of those who have genuinely attempted to find ways to shift subsidy to new homes.
And all of these reactions are subject to the politics of a wounded prime minister desperate to send the right signals to his party after 41 per cent of his own MPs said they have no confidence in him.
Read the rest of this entry »Action for now, solutions not yet
Posted: May 26, 2022 Filed under: Benefit cap, Cost of living, Energy efficiency, Local housing allowance Leave a commentThe £15 billion energy cost support package announced by Rishi Sunak rightly benefits the poorest households most but it remains to be seen what it will do about the cost of living in general and the cost of housing in particular.
Under the package announced by the chancellor on Thursday, 8 million households on benefits will get a one-off payment of £650 paid in two lump sums in July and the Autumn. Add that to the £400 energy support payment (rather than a loan) that will go to everyone and the £150 payment already made (at least in theory) to those in Bands A-D for the council tax, and the Treasury says this amounts to £1,200 help towards the cost of living for the most vulnerable.
Background documents confirm the one-off payment will not count towards the benefit cap, unlike the £20 a week uplift to universal credit during the pandemic. That should avoid many more households seeing the help disappear as fast as it arrives.
Sunak had been under pressure to do more on benefits not just because of energy costs but also because of the large gap between the 3.1 per cent uprating of benefits in April (based on last September’s inflation rate) and the current 9 per cent rate of CPI inflation.
He said his one-off payment would be worth more than bringing forward next year’s uprating of benefits, as some had suggested.
And he also confirmed that the April 2023 uprating will be based on next September’s inflation rate, which could easily be more than 10 per cent, rather than retaining the option of declaring it to be unaffordable.
So far, so good, then and this is probably the package that the chancellor should have delivered in a Spring Statementthat looked inadequate at the time and has seemed even weeker with each passing week. This package looks to be both more generous and more redistributive than many people were expecting.
However, that also reflects the scale of the cost of living crisis. Add the £800 increase in the energy price cap expected in October to the £700 increase already seen in April and that is already more than the chancellor’s £1,200 for the most vulnerable and that is before you get to large increases in the price of food, fuel and other essentials.
And there was one major cost that was as absent from Sunak’s statement this week as it was from the one he made in March and the Queen’s Speech earlier this month. No prizes for guessing it must be housing.
Read the rest of this entry »An encore all over again for Right to Buy
Posted: May 3, 2022 Filed under: Housing associations, Housing benefit, Right to buy Leave a commentOriginally written as a column for Inside Housing.
It is the idea that is so superficially attractive that Conservatives cannot help forgetting all the other times it proved to be hopelessly impractical.
In a story helpfully briefed to the Telegraph a few days before the local elections, Boris Johnson is planning to ‘bring back Right to Buy’.
The prime minister has reportedly ordered officials to draw up plans to give the Right to Buy to housing association tenants ‘in a major shake-up inspired by Margaret Thatcher’.
Coming just over a week after levelling up secretary Michael Gove appealed to ‘Thatcher worshipping’ Tories to want more homes for social rent, the timing does not look like a total coincidence.
Read the rest of this entry »A statement of lack of intent from Sunak
Posted: March 28, 2022 Filed under: Housing benefit, Poverty, Welfare state | Tags: Rishi Sunak, Spring Statement Leave a commentRishi Sunak was always going to have to tackle the cost of living crisis in his Spring Statement and the big questions were how and who would benefit.
Faced with a choice between measures that would benefit the well-off, those on middle incomes and the least well-off, the chancellor did a bit for the first and second groups but more or less ignored the third.
He chose to increase the threshold for National Insurance at a cost of around £25bn over the next five years and followed that up with a 1p cut in the standard rate of income tax at a cost of more than £17bn over the three years from just before the next election in 2024 – though his previous decisions to freeze the tax thresholds and increase NI rates mean these tax ‘cuts’ were really tax rises.
Of the three new measures that he billed as ‘helping families with the cost of living’, the temporary 5p cut in fuel duty (£2.4bn next year) and cut in VAT on energy efficiency materials (£280m over the next five years) are good news if you can afford a car or improvements to your home but not much use otherwise.
The £500m increase in the Household Support Fund in 2022/23 will enable local authorities to help the most vulnerable households with the cost of essentials but it is a drop in the ocean compared to his action (or lack of it) on benefits in general.
To put this in perspective, the Office for Budget Responsibility (OBR) forecasts that average real disposable incomes will fall by 2.2 per cent next year, the most since records began.
However, the squeeze on benefits will be much greater than that.
Read the rest of this entry »
Jules Birch 