The country that works a lot better for some

Originally published on March 6 on my blog for Inside Housing.

If you are under 22 and you need help with your housing it all depends on who your parents are.

Three measures from George Osborne Budgets apply from next month: the cut in housing support for 18-21 year olds; the Lifetime ISA; and the cut in inheritance tax on main residences.

This time last week hopes were high that the government would row back on the first of these. A government source told The Observer that ministers and civil servants dealing with the cut in housing support ‘hate the policy’. Despite this the regulations implementing it were laid on Friday, a day when parliament was not sitting.

There is no official explanation of the move on the DWP website but a spokesman repeats previous lines about ensuring that 18-21 year olds ‘do not slip straight into a life on benefits’.

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The taxing problem of property

If you think the row over business rates is bad, imagine for a moment what would happen if council tax went through a revaluation.

As I’m writing this, some sort of government climbdown seems inevitable after weeks of press coverage of the rates increases faced by shops and other small businesses.

Some of the furore seems justified. The business rates system seems stuck in the past, unable to cope with out-of-town supermarkets let alone internet retailers and almost seems designed to destroy High Street businesses. There are cliff edges built into the system, especially at the bottom end. It’s not clear why farms are exempt but hospitals are not. Exemptions for empty and unused property create incentives to keep it empty.

Much of it is not. The journalists reporting from the mean streets of Maidenhead and Weybridge seem much less inclined to travel to Merthyr or Wakefield to talk to people whose business rates will be cut. The government maintains that this is a revaluation with no net increase in the tax (though some Tory MPs dispute this). That means the benefits will be felt where they should be: in less affluent areas.

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Marks out of 10 for the housing white paper

Originally published on February 10 on my blog for Inside Housing.

So have Gavin Barwell and Sajid Javid finally grapsed the nettle on the housing crisis?

Critics lined up to call the white paper a damp squib, a white flag and (my personal favourite) like a wet Tuesday in Bognor. Some had even read it first.

Supporters called it a pragmatic shift away from policy under David Cameron and ‘a blueprint for change’. And there was the inevitable ‘cautious welcome’ from housing organisations.

In some ways, the responses of two of the architects of previous Conservative housing policies were the most interesting ones. Former housing minister Grant Shapps said previous plans had not made much difference and this one probably wouldn’t either. Former No 10 adviser Alex Morton revealed the cynical political calculation at the heart of previous policy when he warned that ‘if you get dragged into an argument about renting versus owning, it will quickly become about the need for more council homes’.

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An unambitious ambition

Originally posted on January 19 on my blog for Inside Housing.

A new overview of housing in England from the National Audit Office (NAO) provides some revealing insights on the state of the nation ahead of the Housing White Paper. Here are some highlights.

Moving the goalposts

The NAO estimates that 174,000 net additional homes a year are needed to meet the government’s target of a million new homes by 2020.

That’s fewer than the 190,000 delivered in 2015/16, the first of the five years covered by the target.

Confused? How on earth can the government meet such an ambitious target by building fewer homes? The answer is that it has moved the goalposts twice.

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12 tests for the Housing White Paper

This is an updated version of a post originally published on January 12 on my blog for Inside Housing. 

The moment is finally here but will radical plans to boost housing supply live up to their advance billing? Here are my tests.

  1. How half-baked is it?

In one very important way, ministers have already passed my first test. Publication of a White Paper seems to mark a return to an earlier era of government when policies went through consultation and scrutiny before they were enacted.

Contrast that with the way that half-baked ideas from thinktanks were turned into equally half-baked legislation in the back of a fag packet Housing and Planning Act.

Speaking of which, how much will we hear about the loose ends that still need tying up from the act? Pay to Stay may be dead in its compulsory form, and the extension of the Right to Buy delayed by another pilot, but we still don’t know what’s happening with forced sales of higher-value council houses or to the receipts they raise.

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Going lower

Originally posted on August 4 on Inside Edge 2, my blog for Inside Housing

Record low interest rates have been great for people with mortgages but terrible for the housing system as a whole.

Like the Bank of England’s decision in March 2009 to cut the base rate to 0.5%, Thursday’s further reduction to 0.25% is motivated by concern about the economy as a whole. But nobody imagined in 2009 that seven and a half years later interest rates would still be as low, still less even lower.

The result has been severe distortion in the housing market. What was only meant to be a temporary fix has instead become a semi-permanent feature of the system that has benefitted home owners and landlords at the expense of everyone else. The effect of Thursday’s small cut will be limited in itself but it means that effects of the low rate regime will be with us for much longer.

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Peer review

Originally published on July 15 on Inside Edge 2, my blog for Inside Housing

Take your pick: targets for new homes are much too low; the private sector cannot deliver them; and policy is too focussed on home ownership.

A report published on Friday by the all-party economic affairs select committee of the House of Lords does not so much criticise the government’s approach to building more homes as skewer it.

And one of the clearest explanations I’ve yet read of why current policy cannot, and will not, work does not come from just any old committee. The group of Conservative, Labour, Lib Dem and Crossbench peers includes two former chancellors of the exchequer (Lords Lamont and Darling) and two former permanent secretaries of the Treasury (Lord Burns and Lord Turnbull) with more cabinet ministers, senior mandarins, special advisors and business people also in the mix. They are drawing on decades of experience of previous failures in housing policy.

The report is also brilliantly timed, just at the point when Theresa May’s new government is getting down to work and preparing for life after the referendum and George Osborne’s budget surplus targets.

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