Where the money really goes in housing
Posted: March 21, 2018 Filed under: Affordable housing, Help to Buy, Home ownership, Housing benefit, Private renting, Social housing | Tags: UK Housing Review Leave a commentThree 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:
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).
10 things about 2017: part one
Posted: December 22, 2017 Filed under: Grenfell Tower, Homelessness, Housebuilding, Housing benefit, LHA cap, Temporary accommodation Leave a commentOriginally 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.
The real Budget agenda is clear
Posted: November 22, 2017 Filed under: Affordable housing, Budget, Council housing, Land, Local housing allowance, Universal credit | Tags: Philip Hammond Leave a commentPhilip 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.
A look ahead to the Budget part three: welfare and tax
Posted: November 20, 2017 Filed under: Benefit cap, Budget, Local housing allowance, Tax, Universal credit Leave a commentOriginally 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?
The long-term consequences of falling home ownership
Posted: November 12, 2017 Filed under: Home ownership, Housing benefit, Private renting, Welfare state | Tags: Generation Rent 4 CommentsA 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.
The election, housing and poverty
Posted: June 6, 2017 Filed under: Housing benefit, Poverty, Social housing | Tags: General Election 2017 Leave a commentOriginally published on June 6 on my blog for Inside Housing.
What will the main political parties do to improve the housing system for the poorest people?
The answer ranges from something to not much at all, according to a study of their manifestos launched by a group of experts this week.
Academics Stand Against Poverty conducted a poverty audit of the Conservative, Labour and Liberal Democrat plans on their policies on everything from disability to international development and education to health. Each of these was marked out of five, with 5 representing very high confidence that the policies on offer would tackle poverty and 1 very low confidence.
As the graphic shows, Labour came out best overall with an average score of 3.6, including 5 for its plans for disability and 4 for other areas including health, education and social security.
The Lib Dems came a close second with 3.2, matching Labour on education and ranked as the best party on the environment and sustainability.
The Conservatives scored worst on every topic, with no individual mark higher than 2 and an overall mark of 1.5.
That represents a significant improvement for Labour on its score in 2015, when more parties were assessed. Back then the Greens led the way with 3.9, followed by the Lib Dems with 3.2, Labour in third with 2.6, the Conservatives in fourth on 1.7 and UKIP trailing in last with 1.4.
Looking at housing specifically in the 2017 audit, Labour leads with 3, followed by the Lib Dems with 2 and the Tories with 1. That mostly applies to England given that housing policy is largely devolved but the combined score of 6 out of 15 is the lowest for the 11 different policy areas assessed.
