A massive relief to social landlords and tenants, but what now?

Originally posted as a column for Inside Housing on October 26.

So finally even the prime minister accepts that plans to impose a local housing allowance (LHA) cap on supported and social housing are unworkable.

Theresa May’s announcement at prime minister’s questions that the cap will not be implemented represents a massive u-turn that will be an equally massive relief to social landlords and tenants.

Statements from a succession of different ministers over the last few weeks had signalled the move for supported housing in the face of overwhelming evidence of postponed investment and knock-on costs for the health and social care sectors.

The decision to scrap it for social housing too was more of a surprise, though it may have been influenced by the difficulty of distinguishing social from supported homes.

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Starting with the evidence

Originally posted as a column for Inside Housing on October 20. 

Almost everyone agrees there is a housing crisis, that the housing market is broken and dysfunctional and that urgent action is required – but why and what exactly should be done about it?

For most of the last seven years, the answers to these questions seem to been scribbled on the back of a fag packet at Policy Exchange or emerged fully-formed from the brilliant mind of Iain Duncan Smith.

Any idea of evidence-based policy disappeared after 2010, with evaluations of policy published only reluctantly and ignored when their conclusions are inconvenient.

That has begun to change under Theresa May, who became prime minister with a reputation for taking her time over decisions and insisting on looking at the evidence for herself before she took them.

With the Conservatives apparently prepared to consider some ideas that were previously off limits, and even to fund social rent once again, the political consensus about the need to do something about housing is growing.

So the timing could hardly be better for a new initiative dedicated to supplying the evidence to help diagnose the problems with the housing system and come up with solutions.

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The turn of the screw

Originally published as a column for Inside Housing on October 13.

As universal credit understandably took all the headlines, the scale of the threat posed by restrictions on the local housing allowance (LHA) has come into even sharper focus.

The mood music this week suggested that ministers are set to make concessions over their plans to apply LHA caps to supported housing but the rest of social housing is still right in the firing line.

In a packed Westminster Hall debate on Tuesday and at the Communities and Local Government committee, ministers gave strong hints of flexibility to come.

The debate was called by Tory MP Peter Aldous, who called on the government to give ‘full sand serious consideration’ to recommendations made by two select committees for a supported housing allowance rather than LHA plus local top-ups.

Communities minister Marcus Jones said:

‘This matter is a priority for the Government, and we will announce the next steps shortly—later this autumn. I believe that when those proposals are introduced, they will show that we have listened and have understood the important issues at hand and the important situation. What is at stake is helping and supporting some of the most vulnerable people in our society.’

It remains to be seen exactly how much ministers have listened and understood about a system that would create a postcode lottery and has already halted development plans.

But at stake too is the government’s attempt to impose a flawed system originally designed to reflect private rents to control a very different combination of rent and care costs in supported and social housing.

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May dedicates her premiership to fixing housing

Originally posted as a column for Inside Housing on October 4.

You wait a lifetime for a prime minister to make housing their priority and then she gets her P45 while losing her voice with the conference set falling apart behind her.

With all that happening around her it was easy to ignore the substance of Theresa May’s speech.

You may have missed it between coughs but for the first time since the 1950s here was a prime minister promising to put housing at the heart of their premiership.

And here was a Conservative prime minister not just promising an extra £2bn for ‘affordable’ housing but even allowing bids for social rent too.

But as the letters slowly dropped off the conference slogan about ‘BUILDING A COUNTRY THAT WORKS FOR EVERYONE’ you wondered how long she will have a premiership to put anything at the heart of.

And even then it is hard to avoid drawing the obvious conclusions from the comparison between an extra £2bn for affordable housing and an extra £10bn for Help to Buy.

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Ten years after

Originally posted as a column for Inside Housing on September 28.

When I started blogging for Inside Housing in September 2007 I wondered if I’d find enough to write about.

As it turned out there was no need to worry. A week before my first post Northern Rock went bust and the world changed.

What began in the United States as a sub-prime mortgage crisis was transformed by a series of financial acronyms into a Global Financial Crisis.

The connections to housing in this country at first seemed indirect: the UK did not have sub-prime lending on anything like the same scale; we had Northern Rock but there were plenty of other lenders; and the problems at Lehman Brothers and Bear Stearns seemed a long way away.

The direct effects didn’t take long to make themselves felt as credit markets dried up, share prices crashed and politicians panicked at the prospect of cash machines running out of money.

At the time it seemed like we were set for a repeat of the housing market crash of the early 1990s with soaring mortgage arrears and repossessions and families plummeting into negative equity.

One or more of the major housebuilders looked certain to go bust. And the combination of the two would send the banks even further under.

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Sajid Javid’s apparent conversion to social housing

Originally posted as a column for Inside Housing on September 20.

So seven years after all funding ended, three years after the chancellor said it just produces Labour voters and little more than a year after the government legislated to sell a huge chunk of it, social housing is now so ‘treasured’ that it deserves its own green paper.

It’s hard to under-estimate the shift in rhetoric by communities secretary Sajid Javid in his speech to the National Housing Federation (NHF) conference this week but will it be matched by the reality?

He’s not the only one to change his tune. It’s only two years since the same conference saw housing associations rush to endorse the voluntary deal on the Right to Buy.

They did so even though it would be financed by the sale of the most valuable third of council housing and even though replacements for social rented homes sold off could be for shared ownership, part rent-part buy or even starter homes.

That was then. This is now with a weakened government and a context changed utterly by the Grenfell Tower fire.

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What a way to run a housing system

Originally posted on September 14 as a column for Inside Housing.

The balance of funding between government funding for home ownership and affordable housing schemes continues to astonish even after the change in emphasis under Theresa May.

Revised figures prepared for Thursday’s publication of the UK Housing Review Briefing Paper show that total support for the private market up to 2020/21 is set to total £32 bn compared to support for affordable housing investment of just £8.6 bn.

This pie chart really brings it home:

These are revised figures that take account of the extra money for affordable housing announced by chancellor Philip Hammond last November. Even after that, even after adjustments for lower than expected spending on mortgage guarantees, and even including the Right to Buy pilot in the pink part of the graph, we are still spending £4 on support for the private market for every £1 we spend on support for affordable housing.

What really leapt off the page at me in this chart was that the government is set to spend £4.2 bn on Help to Buy and Lifetime Individual Savings Accounts (ISAs) over the same period as it spends £4.3 bn on the main Shared Ownership and Affordable Homes programme.

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