A great leap backwards

Originally published on October 1 on my blog for Inside Housing.

The first two days of the Conservative Party conference make this look like a government that is scraping the barrel for ideas.

Boris Johnson might still have a surprise in store on Wednesday but speeches by housing secretary Robert Jenrick and housing minister Esther McVey were underwhelming at best while chancellor Sajid Javid did not even mention housing in his check-the-small-print bonanza of infrastructure investment.

Jenrick’s big new idea of a right to shared ownership for housing association tenants is not that big and not that new either but it could still have a damaging impact on people who need an affordable home.

Read the rest of this entry »

Advertisements

Home ownership gimmicks won’t change much

Originally published on August 28 on my blog for Inside Housing.

The first big announcement on housing since regime change at Westminster confirms the expected change of emphasis but still leaves some big unanswered questions.

The emphasis is firmly on home ownership in plans widely reported this morning to make it easier for shared owners to buy an increased share in their homes.

The government will consult on plans to make it easier to staircase up by allowing them to buy an extra 1% at a time rather than the current 10%.

That may be attractive to some shared owners but it will do very little to tackle other longstanding problems with the tenure – rising service charges, repair bills, problems selling – and the government will have to find a way to stop transaction costs such as mortgage fees and surveys making it unaffordable.

This isn’t a new idea for shared ownership – Thames Valley already has a scheme called Shared Ownership Plus that allows people to buy an extra 1% of their home each year without paying those extra costs.

However, in terms of a big idea to fix the housing crisis it is hard to disagree with the Labour verdict that this is ‘tinkering’.

At the same time the government will make it easier for people buying under Help to Buy to take out a mortgage that runs for 35 years rather than the current 25.

That is in line with developments elsewhere in the mortgage market and it will reduce monthly repayments but it could lead to increased prices and will cost more in the long run.

However, it seems clear that these could be just the first in a series of measures aimed at boosting home ownership.

Writing in the Times this morning, housing secretary Robert Jenrick hints at more more radical plans to revive what he sees as the ‘moral mission’ of a property owning democracy.

Part of that could be a ‘homes for locals’ scheme:

‘I want local young people, whether growing up in Cornwall or Cumbria, to be able to stay in their communities and build a family where they feel at home. It’s not right that people on low incomes risk being forced out, and I will be tackling this challenge head on. And to get Britain building, I want communities to feel that new housing brings real benefits to local people. What a difference it might make to the planning system if existing residents knew that a good proportion of new homes would be sold at discounted prices to people from that area trying to get on a foot on the ladder.’

The Times reports that ministers are considering a scheme to give first-time buyers a 20% discount to buy in the area where they grew up with the cost to be ‘borne by developers’.

It sounds like a revival of David Cameron’s starter homes plan and it will raise exactly the same issues plus some new ones.

What happens to the discount? Will it remain in perpetuity or be pocketed by the first buyer?

Who really bears the costs? As things stand, the developer will simply cut its other planning contributions, making the discounted homes a ‘cuckoo in the nest’ as people who need other forms of affordable housing will lose out.

And how will they decide whether someone is a local – some people grow up in one place, but many others move around a lot before their 20s and 30s.

All of these ideas sound like gimmicks that will not change very much but this is all about sending out the right signals ahead of the election that everyone assumes is coming, whether or not the government’s plan to suspend parliament until a new Queen’s Speech on October 14 goes through.

Preparations for an election are already underway, with departmental special advisors told to draw up plans for their sections of the next Tory manifesto.

It seems unlikely, therefore, that the Ministry of Housing Communities and Local Government would use up its best (or worst) ideas at this stage.

As Inside Housing has already reported, they could include a new part rent-part buy programme – and in the Spring the government issued a call for proposals for private shared ownership.

So what price a rehash of the failed manifesto from 2015 and a lurch back to the ownership-at-all-costs agenda of David Cameron and George Osborne?

First, though, there is the small matter of the spending review for next year that chancellor Sajid Javid has just announced will be next Wednesday (September 4).

The prospects for housing are already looking ominous ahead of that. Writing in The Telegraph, the chancellor singles out Brexit preparations, the NHS and education as his priorities but warns that spending departments cannot expect a blank cheque.

According to the Financial Times:

‘While the spending review will be billed as an “end to austerity” for schools, hospitals and the police, other departments will face a continued squeeze. Housing and defence are among those likely to face a tough settlement.’


What’s in the Budget small print?

Originally published on November 30 on my blog for Inside Housing. 

If you listened to the chancellor’s speech you may have thought this was a Budget that did not mean much for housing. As ever you may think again after reading the small print.

As I live blogged for Inside Housing yesterday, the big news in the speech was the extra money for universal credit that makes up for many of the cuts imposed in universal credit and delays the roll-out yet again and sounds like it will be enough to avoid a backbench Tory rebellion.

Elsewhere, Philip Hammond found £2.8 bn to bring forward cuts in income tax allowances by a year but he failed to find roughly half that to scrap the final year of the freeze in most working age benefits including the local housing allowance.

This was a clear political choice to go for tax cuts that overwhelmingly benefit the better-off over benefits that go to the poorest households.

Ahead of the next spending review, numbers crunched by the Resolution Foundation overnight suggest that the squeeze on everything apart from health will continue well into the 2020s.

However, the most interesting developments for housing came in the background documents published as Mr Hammond sat down.

Read the rest of this entry »


Owning the future

Originally published on June 30 on Inside Edge 2, my blog for Inside Housing

The shift in subsidy from renting to owning under this government may be obvious but it’s only when you see it laid out in total that you appreciate its scale.

This year’s UK Housing Review Briefing, published at the CIH conference on Thursday, sets out total government support for different kinds of housing from 2015/16 onwards. The total for social and affordable rent is just over £2 bn. The total for home ownership and the private market is a cool 21 times bigger than that: £42.7 bn.

Read the rest of this entry »


Keep your friends close – Part 1

Originally posted on November 30 on Inside Edge 2, my blog for Inside Housing

For some reason, George Osborne made me think back to the school playground as he set out his spending plans for the next five years.

As the sidekick and heir apparent to the head boy, the chancellor has the power to get what he wants. First he had to correct his mistake from the Summer Budget when he was caught redhanded trying to steal the dinner money of most of the poor kids. He has now handed it back to the Strivers but will be waiting for them in the bushes to claim it back after school.

With that out of the way, he was free to get the gang together to build some homes, by which he means almost exclusively homes to buy. First in line were his main allies the housebuilders.

When you’ve already benefited from billions of pounds worth of loans, guarantees and relaxations in the rules on planning and energy efficiency, what’s another £2.3bn between friends? Yet this was different: the first time that I can remember that grant (presumably it is grant) has gone to pay for something that will not be recycled into more homes.

Read the rest of this entry »


Good cop, bad cop and mad cop

Originally posted on November 13 on Inside Edge 2, my blog for Inside Housing

Inside Housing: ‘Clark promises deregulation package’. FT: ‘Osborne eyes social housing stake sale.’ Daily Mail: ‘Duncan Smith’s great council house giveaway.’

Three rival visions for housing in England from three rival politicians who all think they know best.

Let’s assume some of this is the result of private disputes about budgets (especially between Osborne and IDS) playing out in public. The run-up to any spending review features media briefings designed to promote pet projects or scupper those of others. But this is still different: it’s not pet projects at stake here but potentially the entire future of housing. And the rival visions directly contradict each other.

Read the rest of this entry »


Home stretch

Originally posted on September 11 on Inside Edge 2, my blog for Inside Housing

With 11 weeks to go until the spending review, final efforts are being made to convince George Osborne of the case for housing.

The trouble is he’s already made it pretty clear he’s only interested in home ownership, may cannibalise what’s left of the housing budget to pay for it and he doesn’t seem to like housing associations much.

What we know so far is that the chancellor wants to cut departmental spending by £20bn and that departments have been told to model for two different scenarios: real terms cuts of 25% and 40%. If that is not bad enough, housing is an unprotected area and so bound to suffer when Osborne announces the details in November, potentially in multiple ways.

Read the rest of this entry »