Time to end the freeze

Originally published on August 29 on my blog for Inside Housing. 

The freeze on the Local Housing Allowance (LHA) is a £1.2 billion question for which the answer seems obvious.

The problems detailed in analysis by the Chartered Institute of Housing (CIH) published on Wednesday are severe and they are getting worse.

LHA rates are midway through a four-year freeze that is the culmination of seven years of austerity. The result is that they have completely lost touch with the rents they were meant to cover.

The CIH analysis shows that 90% of LHA rates now fail to cover the rent of the cheapest 30% of private rented homes (bear in mind that this was itself a cut from the 50th percentile and that LHA was originally designed to enable tenants to ‘shop around’ for cheaper rents).

That leaves tenants facing rent shortfalls that grow larger with each year of austerity: outside London, two out of every three LHA shared accommodation rates have a weekly shortfall of £4 or more and half of other LHA rates are short by £10 or more; in London, the shortfalls for shared accommodation are more than £10 a week in every LHA area and at least £30 for all other homes.

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‘Housing week’ off to an uncertain start

For once this is a silly season that has some substance. If you can tear yourself away from the sun lounger or the latest pronouncement by the Etonian Katie Hopkins, mid-August sees a trio of government announcements that are crucial for housing and homelessness.

Last week featured another big benefits u-turn: confirmation that housing benefit will continue for supported accommodation removes a cloud that has been hanging over projects including homeless hostels and women’s refuges.

Monday saw the launch of the strategy that the government says will enable it to meet its target of halving rough sleeping in England by 2022 and ending it by 2027.

And what is billed as ‘housing week’ is set to continue on Tuesday with the launch of the social housing green paper – originally promised in the Spring, then before the parliamentary recess last month, but now appearing while most MPs are on holiday.

The timing does at least ensure some media attention, including an uncertain performance by James Brokenshire in the TV and radio studios on Monday morning.

After a lively appearance on Good Morning Britain, the housing secretary struggled on the Today programme when asked whether government policies are to blame for the relentless rise in rough sleeping and floundered when asked how much of the promised ‘£100 million plan’ is new money. (Somewhere between none and not much was the eventual answer).

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April arrives with some rare good news

Originally published on March 29 on my blog for Inside Housing.

Sometimes it feels like I’ve written a blog at this time every year with the headline ‘April is the cruellest month’.

It’s not that I have a TS Eliot fixation nor (I hope) that I endlessly repeat myself but because ever since 2010 the start of the financial year seems to have meant yet another benefit cut or housing policy change to cope with.

This year is a bit different not so much because there is no bad news but because there is some good news as well. Here are some examples:

  • The u-turn on the withdrawal of support for housing costs for 18-21 year olds under universal credit announced on Thursday. This was a cumbersome policy that required significant exemptions and barely saved any money but it’s still a significant change to the original pledge to make young people ‘earn or learn’.
  • The Homelessness Reduction Act passed in 2017 applies from April 3. The legislation should be a big step forward in ensuring that more people get help earlier but despite a recent announcement on funding there are still well-founded concerns about whether councils have the money to implement it.
  • Claimants already getting housing benefit who move on to universal credit will from April be paid an additional two weeks of housing benefit. That may not be much consolation for the (in theory) five-week wait for their first universal credit but the payment (worth an average of £233) should ease the transition a bit –and it is not recoverable.
  • It will be unlawful for landlords to give new tenancies on the least energy efficient property from April 1 – all rented property will have to qualify for at least an Energy Performance Certificate rating of E so (in theory) tenants will no longer be stuck paying high heating bills for the worst F and G property.
  • More measures introduced against rogue landlords in the Housing and Planning Act 2016 come into force, including powers for councils to issue banning orders against the worst offenders and implementation of a database of landlords and letting agents convicted of some offences.

Bear in mind too that it’s not so long ago that I would have been writing about plans to apply a Local Housing Allowance (LHA) cap to social and supported housing from…April 2018.

For all that good news, though, the suspicion remains that it will at best mitigate the impact of policies already implemented and still in the pipeline.

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Where the money really goes in housing

Three comparisons leap out from the latest edition of the indispensable UK Housing Review published on Wednesday.

The first two are not new in themselves and the third is only a crude estimate but all three need repeating again and again for a real appreciation of where spending on housing goes and exactly who is subsidising who.

First comes the main one highlighted by the Chartered Institute of Housing (CIH): the shift from bricks and mortar to personal subsidies, or from grants for new homes and repairs to old ones to housing benefit.

This series of pie charts from the Review shows the change over the last 40 years and the total amount of housing subsidies in real terms:

Chapters tables charts 2018

Note first that supply subsidies have sunk to just 4.3 per cent of the total pie – this despite all the cuts in housing benefit seen since 2010 and the fact that the figures to not include continuing tax reliefs for home owners (see below for more on that).

Second, note that this does not save money. Total subsidies are now 48 per cent higher in real terms than at the turn of the century (when admittedly social housing investment was very low) but they are also approaching the levels of 30 years ago (when investment was significantly higher and the unemployment rate was three times what it is now).

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10 things about 2017: part one

Originally posted as a column for Inside Housing on December 22.

As in 2016, it seemed like nothing would ever be the same again after a momentous event halfway through the year.

The horrific Grenfell Tower fire on June 14 means that the headline on this column should really have read ‘nine other things about 2017’. Just as the Brexit voted has changed everything in politics, so it is almost impossible to see anything in housing except through the prism of that awful night.

That said, 2017 was another year of momentous change for housing, one that brought a few signs of hope too. Here’s the first of my two-part review of what I was writing about.

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The real Budget agenda is clear

Philip Hammond’s Budget contains some big numbers and ambitious promises on housing but you don’t have to delve very far to find the real priorities.

Contrast, for example, what’s happening with housing, tax and welfare, two different measures that were heavily predicted and one that was desperately needed.

Stamp duty is being cut, but the chancellor has gone further than the expected holiday by abolishing it completely for first-time buyers of homes worth up to £300,000 or the first £300,000 of homes worth up to £500,000. The cut applies from now and will cost £3bn by the end of 2022/23.

Problems with universal credit are being addressed with measures including the scrapping of the seven-day waiting period, making advances easier to get and allowing continued payment of housing benefit for two weeks after a universal credit claim. The total cost is £1.5bn by 2022/23 and there is another delay to the rollout.

The universal credit changes are welcome but will still leave claimants potentially facing destitution and people in work thousands of pounds a year worse off than they would have been under the previous system.

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A look ahead to the Budget part three: welfare and tax

Originally published as a column for Inside Housing on May 20. 

Some very big questions on housing, welfare and tax are looming ahead of this Budget.

If there is not the same sense of raised expectations that surrounds the prospects for land and investment, the answers given by Philip Hammond on November 22 will still go a long way to determining what type of housing system we will have going into the 2020s.

I’ve written many times before about the way that the aftermath of the financial crisis in 2008 and the policies adopted under George Osborne since 2010 have combined to create a system in which older and better-off home owners have gained at the expense of younger and poorer renters.

A piece in the Financial Times last week used figures from the Resolution Foundation to quantify just how much: housing costs for households below average incomes rose by £714 between 2007/08 while they fell by £271 for those on above average incomes. The biggest gains went to the richest 10% of households, whose average housing costs fell by £1,206.

And that these figures do not include substantial increases in housing wealth over the same period as house prices have risen.

Many factors have driven this including falling rates of home ownership and rock bottom mortgage rates but policies on tax and welfare set by central government have also played a part.

So what could Hammond do to redress the balance?

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