That was the (housing) week that wasn’t

Originally posted on August 20 on my blog for Inside Housing. 

An open letter to James Brokenshire on Monday puts a lacklustre Housing Week into true perspective.

Organised by the Conservative think tank Onward, the letter calls for a change in the law to allow local authorities to buy land for housing at fair market value rather than a price that includes the ‘hope value’ that includes planning permission.

The call for a change to the 1961 Land Compensation Act is supported by a wide range of organisations including think tanks from across the political spectrum as well as Shelter, Crisis, the Joseph Rowntree Foundation, National Housing Federation, National Landlords Association and Generation Rent and even the Campaign to Protect Rural England.

And it is also signed by former Downing Street insiders Will Tanner and Neil O’Brien MP, now director and an advisory board member at Onward.

Reform to allow councils to buy land at close to existing use value would go much further that tentative government moves on land value capture and open up the possibility of a new generation of new towns or urban extensions with funding for infrastructure and affordable housing.

There are caveats to this. First, any such measure would have to withstand resistance by powerful landed interests inside the Conservative party with pockets deep enough to fund a legal challenge like the one that overturned compulsory purchase powers in the original New Towns Act and led to the 1961 Act.

Second, while few would disagree that up to £9 billion a year in land value gains could be put to better use than lining the pockets of landowners, there might be less agreement about what to do next: a report by Onwardin June argued for a programme of discounted rent homes for young people to buy and appeared to argue for less, rather than more, social housing.

However, the contrast between this week’s call for reform and last week’s highlights is still a striking one.

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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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May dedicates her premiership to fixing housing

Originally posted as a column for Inside Housing on October 4.

You wait a lifetime for a prime minister to make housing their priority and then she gets her P45 while losing her voice with the conference set falling apart behind her.

With all that happening around her it was easy to ignore the substance of Theresa May’s speech.

You may have missed it between coughs but for the first time since the 1950s here was a prime minister promising to put housing at the heart of their premiership.

And here was a Conservative prime minister not just promising an extra £2bn for ‘affordable’ housing but even allowing bids for social rent too.

But as the letters slowly dropped off the conference slogan about ‘BUILDING A COUNTRY THAT WORKS FOR EVERYONE’ you wondered how long she will have a premiership to put anything at the heart of.

And even then it is hard to avoid drawing the obvious conclusions from the comparison between an extra £2bn for affordable housing and an extra £10bn for Help to Buy.

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What a way to run a housing system

Originally posted on September 14 as a column for Inside Housing.

The balance of funding between government funding for home ownership and affordable housing schemes continues to astonish even after the change in emphasis under Theresa May.

Revised figures prepared for Thursday’s publication of the UK Housing Review Briefing Paper show that total support for the private market up to 2020/21 is set to total £32 bn compared to support for affordable housing investment of just £8.6 bn.

This pie chart really brings it home:

These are revised figures that take account of the extra money for affordable housing announced by chancellor Philip Hammond last November. Even after that, even after adjustments for lower than expected spending on mortgage guarantees, and even including the Right to Buy pilot in the pink part of the graph, we are still spending £4 on support for the private market for every £1 we spend on support for affordable housing.

What really leapt off the page at me in this chart was that the government is set to spend £4.2 bn on Help to Buy and Lifetime Individual Savings Accounts (ISAs) over the same period as it spends £4.3 bn on the main Shared Ownership and Affordable Homes programme.

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Time for cross-party co-operation on housing?

Originally published on July 11 as a column for Inside Housing.

If we need to ‘invest in good work’ what about good homes?

Theresa May was speaking at the launch of the Taylor review of the gig economy on Tuesday exactly a year after she became prime minister.

In the wake of her failed election gamble, she needs non-Tory support to address the challenges identified in the report.

And her plea to the other parties to ‘come forward with your own views and ideas about how we can tackle these challenges as a country’ is being interpreted as being about more than just the labour market.

So if the challenge of precarious work requires cross-party co-operation what about that of precarious housing?

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Off target

Originally posted on August 24 on Inside Edge 2, my blog for Inside Housing

A million new homes by 2020? The latest housebuilding statistics for England suggest little progress towards the government’s target or aspiration or ambition. I forget which it is this week.

There’s the usual mix of good news (starts up slightly on the previous quarter and last year) and bad (completions up on the previous quarter, down a bit on last year).

But is this graph shows there are few signs of a step change in output. After an uptick in 2013/14, starts have now been stuck on just over 140,000 for the last nine quarters. Completions have now caught up.

start comp

And this is before any real impact from the Brexit referendum. Projections by Capital Economics in a report by Shelter yesterday suggest that housebuilding will fall by 8% over the next year because of uncertainty following the vote and that output will be down 66,000 homes as a result.

So a year into that five-year non-target, it seems perfect timing for chancellor Philip Hammond to launch his much-touted fiscal stimulus in the Autumn.

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