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.
Originally published on August 28 on my blog for Inside Housing.
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.
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.’
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.
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.
Originally posted on July 13 on Inside Edge 2, my blog for Inside Housing
It may have important new provisions on housing and planning but the name of the government’s new productivity strategy rather gives the game away.
Described as ‘the second half of the Budget’, Fixing the Foundations was published by the Department for Business Innovation and Skills but includes chapters on housing and planning and welfare that amplify decisions taken in the first half.
But does the name remind you of anything? Go back four years and David Cameron himself was launching a ‘radical and unashamedly ambitious’ housing strategy. The title? Laying the Foundations.
Once they’ve stopped sucking air through their teeth, any builder will tell you that once you’ve laid the foundations and built on top of them, it’s enormously expensive to start to fix them. It’s also a pretty good indication that the foundations were pretty rocky to begin with.
First posted on Inside Edge 2, my blog for Inside Housing on July 6
What’s stopping shared ownership from fulfilling its potential as the fourth housing option?
Ever since it was launched, shared ownership has seemed to promise more than it delivers to people who can’t afford full ownership, want something better and more affordable than private renting and want something more or don’t qualify for social housing. Its part-rent, part-buy status and the fact that it requires less grant than social housing have ensured support from both Conservative and Labour governments and it’s become increasingly important to the finances of the providers that offer it. Yet somehow something is missing.
It’s a conundrum the government is trying to resolve through changes introduced in April and a review of longer term options out this summer. It would do well to take heed of a new report from Bristol, Kent and York universities and the Leverhulme Trust launched at an event at the House of Lords last week that I chaired.
From a wider policy perspective, shared ownership has huge potential. As Lord Best put it at the launch, we could create three to four times more home owners through shared ownership than through the Right to Buy.