As 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
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.
Originally written as a column for Inside Housing.
‘Making things right’ is the government’s theme of the month for housing and two new pieces of legislation represent significant steps in that direction.
Unfortunately they also beg some real questions about what’s happening, and not happening, elsewhere.
The Social Housing (Regulation) Bill passed its final hurdle before Royal Assent with its third reading in the Commons on March 1. The proactive consumer regulation regime and inspections that were dropped in 2010 will now be restored.
While its long-term impact remains to be seen, the Bill was considerably strengthened by last-minute government amendments to implement ‘Awaab’s Law’ time limits for landlords to investigate and fix damp and mould problems and to mandate professional standards for social housing staff.
The private member’s bill introduced by Conservative MP Bob Blackman (also the architect of the Homelessness Reduction Act in 2017) aims to stop the exploitation of vulnerable tenants by rogue landlords in the exempt accommodation sector.
The two Bills, and the spirt of cooperation in the debates on them, highlight a significant change in attitudes within government since Grenfell.
Originally 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.
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.
Originally 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).
Originally 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.
Originally 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 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.
Originally 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.
Originally 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.
Originally published as a column for Inside Housing.
The rent cap proposed for social housing may not have come as a huge surprise but the consequences will play out in very different ways for different parties.
It says it all about the cost of living crisis that whether rents are capped or not could be well down social tenants’ list of worries over the next few months.
The energy price cap has already almost doubled in the last 12 months to £1,971 a year. Next month that will rise to £3,549 and the worst forecasts suggest that could double again by next April unless the new government takes radical action.
Effectively, therefore, tenants in social housing could be paying double rent next year unless they take drastic steps to cut their bills.
But many are already doing this and finding that even turning the boiler off does not go far enough – they may be asking why the consultation does not include an option to freeze rents.
The problem is that, while supply has to be part of the solution, it takes time to have an effect and people who need affordable homes do not have time.
Even if we built 300,000 new homes a year in England (an even bigger if as Tory leadership candidates pander to their MPs and members) that would have to be sustained for years to have an impact on prices. Even if that included the 90,000 social rent homes a year advocated by campaigners, and even if no more were sold off, it would take more than a decade to house families on council waiting lists that significantly understate demand.
So why not look instead at the 25 million homes that already exist? As Darren Baxter-Clow, Joseph Elliott and Rachelle Earwalker argue in the paper, recent history shows that rapid changes are possible.