Loans, homes and infrastructure

Originally posted on October 25 on my blog for Inside Housing.

The row over the hike in the interest rate for borrowing from the Public Works Loans Board (PWLB) is important in itself but it also raises a more fundamental point about social housing investment.

The rate increase imposed by the Treasury earlier this month seems to have been sparked by concern about councils investing in shopping centres rather than homes, which is ironic given that their rationale is to find new revenue streams to compensate for Treasury-imposed austerity.

However, it reinforces the impression that the government still does not trust councils to invest wisely in housing or anything else.

That view goes way back to 1979, of course, and the borrowing and spending controls that the Thatcher government imposed on council housing along with the right to buy.

But it also recalls the way that the government finally introduced self-financing in April 2012 but accompanied it with caps on borrowing and then undermined their business plans by imposing the 1% a year rent cut from April 2016.

Now, just at the point when research by Inside Housing reveals that councils are ready to scale up their housebuilding, the beancounters have struck again.

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The big switch

Ed Miliband has ended three decades of political consensus that it’s better to subsidise rents than new homes but changing course will not be easy.

The Labour leader’s speech in Newham this morning is significant in all kinds of ways: for the party’s positioning ahead of the next election; for the implied switch to contributory benefits and ‘something for something’; for tackling low pay; and for the careful use of ‘social security’ to avoid the loaded term ‘welfare’.

Even the setting – Newham Dockside – is significant since it looks very much like an endorsement of the more proactive but harsher approach to benefit claimants adopted by its mayor Sir Robin Wales.

All of those things could have major implications for housing but none so much as the plan to shift spending back from housing benefit to bricks and mortar – the end of ‘letting housing benefit take the strain’ and admitting the failure over decades to build enough homes.

Read the rest of this post on Inside Edge, my post for Inside Housing


Waiting game

This week’s move by Prudential into the private rented sector one is highly significant for reasons that go far beyond the 500 or so homes involved in the deal.

First reported by the Financial Times on Monday, official confirmation of the Pru’s £105 million deal with Berkeley Homes is extensively covered in today’s papers. See Inside Housing’s story here.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Osborne’s choice

Here’s my take on the four key questions for housing coming out of the Budget so far.

1) Is Osborne just blowing bubbles? There are sound reasons why the government might want to help people buy new homes or help first-time buyers get mortgages. The equity loan and mortgage guarantee schemes under Help to Buy are extensions of the existing FirstBuy and NewBuy schemes.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Economic ally

Housing has gained an unexpected new ally in the battle to convince the government to fund more affordable new homes.

City broker Tullett Prebon is better known for its warnings of financial Armageddon and for shoot-from-the-hip appearances on the Today programme by its chief executive Terry Smith. It has even argued that financial austerity and severe cuts in public spending are a myth spun by the government to the bond markets.

But now a report by its global head of research Tim Morgan argues not only that a house building programme is one the few options left for the government, but also that it must be social housing funded by public investment.

Read the rest of this post at Inside Edge, my blog for Inside Housing


The road home

If the government can change the public borrowing rules for roads, why not for council housing?

The papers this morning (see here and here) have been briefed that the government growth package to be launched when parliament returns next month will include not just a housebuilding stimulus but a radical new plan to boost road building.

Read the rest of this post at Inside Edge, my blog for Inside Housing


Easing does it?

There’s been a real change in the way the government is talking about housing investment over the last week. Is it just talk or more than that?

Several days out of news and twitter contact have left me catching up with what seems a noticeable change in tone from the Lib Dem side of the government.

Read the rest of this post on Inside Edge, my blog for Inside Housing