What’s gone wrong with our housing – and what could go right
Posted: April 4, 2023 Filed under: Private renting, Right to buy, Social housing | Tags: Barcelona, Singapore, Vienna Leave a commentAs symbols of failure, take a former council house in south London chopped up into six bedsits, housing association tenants waiting in vain for repairs and private renters searching non-stop for homes
As a symbols of success, take Vienna’s century of genuinely affordable rents, Barcelona’s long-term housing strategy and Singapore’s melding of the market and public ownership.
The Rental Health series stretching across BBC radio and television had all of that and more, from lots of jobs but no homes in the Highlands to the dire state of the rental market in Yorkshire to the mechanics of local housing allowance and Section 21 to people looking for housing alternatives in vans, co-housing and boats.
Those symbols of failure don’t come much starker than the three-bedroom council house on the Bampton estate in Forest Hill featured in the brilliantly appalling BBC Panorama documentary What’s Gone Wrong With Our Housing?
The first tenant moved into the home in 1971, bought it under the right to buy for £15,000 in 1984 and sold it for £85,000 in 1988. It is now owned by a private landlord who has converted it into six bedsits rented out for £960 a month each.
Most of what amounts to £60,000 a year in rent is paid in housing benefit by the government that sold it for a quarter of that.
As if that was not enough to make the point, the same private landlord has done the same thing to three other houses in the same terrace and is pocketing £250,000 a year.
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 »Gove’s admission begs more questions
Posted: January 30, 2023 Filed under: Fire safety, Leasehold, Planning, Private renting Leave a commentOriginally written as a column for Inside Housing.
Michael Gove’s admission that ‘faulty and ambiguous’ building regulations set by central government were partly to blame for the Grenfell Tower fire will come as no surprise to anyone who has taken even passing notice of the evidence at the public inquiry.
That a statement so blindingly obvious should be enough to prompt a worried look from one of the levelling up secretary’s media minders speaks volumes about the government’s stance up to now. It also begs significant questions about the administration’s approach to housing going forward.
The admission (and the look) came in an interview with the Sunday Times trailing the announcement on Monday that developers have six weeks to sign legally binding contracts to repair unsafe buildings or, in effect, lose the ability to build anything else.
As the levelling up secretary told Sophy Ridge on Sunday on Sky News: ‘The people who were responsible for erecting buildings which we now know are unsafe have to pay the costs of making sure those buildings are safe.’
Except that making UK-registered developers liable for fixing the blocks they built themselves via the contracts but for paying to fix other buildings via the Building Safety Levy does not really capture all of those responsible.
As the inquiry has revealed, that list includes just about every part of the construction industry, and especially product manufacturers. Mr Gove’s written statement on Monday does say that contractors and manufacturers are among those whose conduct is being investigated by his department’s Recovery Strategy Unit.
The list now also includes a government that Mr Gove says ‘collectively has to take some responsibility’ (meaning current and previous governments).
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 »The state of the (housing) nation
Posted: November 1, 2022 Filed under: Bed and breakfast, Decarbonisation, Homelessness, Housing market, Levelling up, Private renting, Social housing Leave a commentOriginally written as a column for Inside Housing.
The UK Housing Review Autumn Briefing Paper is published this week and as usual provides an invaluable guide to the state of the housing nation. Here are five graphs that illustrate key points about five different parts of the housing system:
Shifting rules on rents
What everyone wants to know, of course, is what will come in place of that purple line on the right but the graph is a reminder that so-called long-term deals on social housing rents can quickly disappear. The four-year rent reduction at the end of the 2020s that ended the previous one is now set to be succeeded by an annual increase significantly below the 11.1 per cent implied by the CPI plus 1 formula.
The decision is finely balanced between cost of living considerations and housing investment, with the existence of housing benefit making it much more complex than it was in the famous case of Clay Cross 50 years ago.
The Briefing Paper quotes estimates by Savills that a 5 per cent cap on rents in England (the government’s favoured option) would cost councils £500 million and housing associations up to £1 billion. One association says that even a 7 per cent cap would mean a 21 per cent reduction in new build and there are also major concerns about the impact on investment in existing stock and on supported housing.
A cap would help tenants not on housing benefit but the major beneficiary would be the Department for Work and Pensions unless its savings are reinvested in housing.
That point was really brought home to me when I interviewed the Welsh housing minister recently. She was only too aware that the more she restricts next year’s rent increase, as might be her instinct, the more savings will go straight back to Westminster, with zero chance of them coming back to Wales.
Read the rest of this entry »The decline and fall of Trussonomics
Posted: October 18, 2022 Filed under: Affordable housing, Economics, Levelling up, Planning, Section 21 Leave a commentOriginally written on Tuesday October 18 (before the resignation of Liz Truss) as a column for Inside Housing.
Growth, growth, growth? Little survives of Trussonomics after a series of astonishing u-turns but in housing at least is still seems to be half-steam ahead.
Just two of the tax cuts announced by former chancellor Kwasi Kwarteng in his statement last month and only because the legislation for them had already gone through parliament.
The scrapping of the health and social care levy obviously begs big questions about funding for both but the increase in stamp duty thresholds now looks even more of a spare part than it did at the time.
While stamp duty is fundamentally a bad tax because it inhibits transactions, cutting it without wider reform of property taxation benefits sellers more than buyers as savings are capitalised into higher prices.
Cutting it permanently now rules out what has always been the first lever the Treasury pulls in a housing market downturn: a stamp duty holiday.
Even on the Treasury’s own figures, it will only generate an extra 29,000 house moves a year. But the limited growth in the wider property sector this generates will come at a cost to the taxpayer of £7 billion over the next five years.
New chancellor Jeremy Hunt has signalled that ‘eye-watering decisions’ about spending cuts and tax rises are on the way, mortgage costs have soared since the not a Budget and the energy price guarantee is now only guaranteed until April.
With even the pensions triple lock not guaranteed, the battle that was already looming over the uprating of benefits next year will now be even more intense.
Further freezes in the benefit cap and – despite rising rents – local housing allowance look more likely with devastating consequences for poverty and homelessness.
All this will be the acid test of Hunt’s promised return to ‘core compassionate Conservative values’.
The implication of the fiscal position for the Department of Levelling Up, Housing and Communities must be that any budget that is not already nailed down is up for grabs.
Read the rest of this entry »How short-term lets have hollowed out the rental market
Posted: September 21, 2022 Filed under: Affordable housing, Cornwall, Private renting, Short-term lets Leave a commentOriginally written as a column for Inside Housing.
It’s the end of summer and the tourists are going home but the housing problems they leave behind are here to stay.
This time last year I write about the momentum behind moves to tackle the blight of second homes in Wales and in parts of England like Devon and Cornwall.
Second homes are not new in themselves but combine them with the rise of Airbnb and short-term lets and in many areas the problem for local people has become less finding an affordable rented home than finding a rented home at all.
Anecdotal evidence I’m hearing where I live in Cornwall suggests that these trends have got far worse in the last 12 months. In the process, more assumptions about housing are being turned on their head.
Just down the road from me, the landlord of a large house converted into flats has just given all the tenants two months’ notice. One has been there 17 years, a couple in their 70s have lived there more than 20 years, and they have always paid their rent on time, but none of that matters. The house is being converted into short-term holiday lets.
A seaside town in Cornwall is possibly an extreme example of the trend but problems with short-term lets are being reported all around the country and I can think of many more villages nearby where the situation is far worse, with communities full of second homes and Airbnbs and second homes and few full-time residents.
Read the rest of this entry »
Jules Birch 