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 »Political chaos leaves big housing questions
Posted: July 8, 2022 Filed under: Fire safety, Levelling up, Mortgages, Private renting, Right to buy | Tags: Conservatives, Michael Gove Leave a commentOriginally published as a column for Inside Housing.
So it’s back to the future and all change at the Department for Levelling Up, Housing and Communities (DLUHC) as the dust begins to settle from the political chaos of the last two weeks.
It was a scandal involving one ex-housing minister (Chris Pincher) that triggered the revolt against Boris Johnson. Many Tories want another (Dominic Raab) to take over as temporary prime minister. And two more (Grant Shapps and ex-housing secretary Sajid Javid) could run as candidates for the permanent job.
Over at the department that keeps changing its name, Michael Gove has been sacked as ‘a snake’ and most of the more junior ministers have resigned. Stuart Andrew set a new record for a housing minister with just 148 days in the job and no time even for an Inside Housing interview to be published.
Coming in as temporary secretary of state is the familiar figure of Greg Clark, who according to some reports this morning has told civil servants that Gove will be back soon.
Confused? Significant new policy announcements are by convention ruled out until there is a new permanent leader and cabinet – but this did not stop Theresa May enshrining the net zero by 2050 commitment in law before she left office and Boris Johnson is not noted for following convention.
Read the rest of this entry »White paper reverses Tory orthodoxy on renting
Posted: June 17, 2022 Filed under: Private renting, Section 21 Leave a commentOriginally written as a column for Inside Housing.
The fairer renting white paper could mark a turning point for tenants and landlords but there is still a long road ahead.
If enacted by this Conservative government, the proposals will mean the abolition of the Section 21 no-fault evictions and assured shorthold tenancies that were at the heart of the 1988 framework designed by the Thatcher administration to bring the market back into the private rented sector.
The damning verdict of the white paper is that this has led to a sector ‘that offers the most expensive, least secure, and lowest quality housing to 4.4 million households, including 1.3 million households with children and 382,000 households over 65. This is driving unacceptable outcomes and holding back some of the most deprived parts of the country.’
In future, all tenancies will be periodic tenancies that can be ended by the tenant with two months’ notice or by the landlord only with a valid ground for possession.
The new system will also see a reversal of more recent trends towards less security in the social rented sector. Probationary, fixed term and demoted tenancies are now set to be abolished on the grounds that there should be parity between sectors.
Contrast that with what happened in the 2010s under David Cameron. The government enabled social landlords to offer fixed-term tenancies in 2011 and legislated to make them mandatory for new council tenants in 2016 (although this was later dropped). Ministers regularly implied that ‘tenancies for life’ were somehow part of a ‘dependency culture’.
Read the rest of this entry »The tide turns on deregulation and the private sector
Posted: February 17, 2022 Filed under: Fire safety, Housebuilding, Legal, Private renting | Tags: Michael Gove Leave a commentThe package of building safety changes announced this week by Michael Gove represents an extraordinary shift on any number of different levels.
Whether it’s effectively banning developers from building anything if they fail to cooperate or rewriting the terms of tens of thousands of leasehold contracts, the amendments to the Building Safety Bill will fundamentally change the way that flats (at least those over 11m) are maintained and managed.
The package inevitably raises a whole series of questions that I’ll return to in a future column but for now I want to concentrate on what it says about the extent of the change in the government’s attitude towards the private sector in housing.
Read the rest of this entry »
Jules Birch 