Look beyond the rate rise for the real housing squeeze

Originally posted as a column for Inside Housing on November 2.

Today’s first rise in interest rates for a decade is an important symbolic moment but it will make little or no immediate difference to the housing costs of millions of home owners with a mortgage.

The increase from 0.25% to 0.5% could see average mortgage payments rise by around £15 a month but it will not apply straight away to people with fixed rate mortgages and in any case it only restores the base rate to what was a record low between 2009 and the aftermath of the referendum.

Compare that with the continuing squeeze on benefits and tax credits/universal credit that the Institute for Fiscal Studies forecasts today will help to increase the percentage of children in relative poverty after housing costs from 30% now to 37% by 2022.

And contrast it with the latest overall benefit cap statistics also published today: as at August 68,000 families were hit by the lower cap that came into effect a year ago and nearly a third of them are losing between £50 and £100 a week. The cap is now £26,000 in London and £20,000 elsewhere.

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Are things moving at last on housing?

Originally published as a column for Inside Housing on October 23.

Two of the many things about housing that have been obvious since 2010 could be set to change at last.

First, at a time when interest rates are at a record low, it makes sense to borrow to invest in homes and the infrastructure for them.

Sajid Javid committed this heresy against austerity when he told the Marr Show on Sunday that: ‘Investing for the future, taking advantage of record low interest rates, can be the right thing if done sensibly.’

Second, private housebuilders will build homes only as fast as they can sell them, so if we want more homes the state needs to intervene.

As I’ve argued many times before, it makes financial sense even for a government committed to austerity to commission homes directly, rent them at first and then sell them to recoup the money.

Ministers have taken tentative steps towards this position in the last few Budgets but according to a report in The Sunday Times a giant leap towards it is under consideration for November 22.

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Another new minister steps through housing’s revolving door

Originally posted on June 15 on my blog for Inside Housing.

Theresa May said it herself. Twice. Polling since the election signals it. Housing matters.

Except that it doesn’t really. The delay in naming Alok Sharma as the sixth housing minister in seven years and the 15th in this century said it all.

As John Healey tweeted on Monday, if Labour had won, it would already have started creating a new housing department with a minister of cabinet rank.

Instead we are left with Sajid Javid still at the DCLG despite the apparent determination of Theresa May’s team to move him and a new man taking his Buggins’ turn in the housing job.

And in place of Nick Timothy and Fiona Hill, the joint chiefs of staff to Theresa May who took the rap for the disastrous Tory campaign and manifesto, we have the ex-housing minister and (thanks to those three) ex-MP Gavin Barwell.

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The limits of consensus

Originally posted on February 21 on my blog for Inside Housing.

Two weeks on from the Housing White Paper and a consensus is developing around many of its recommendations – but how long will it survive contact with the real world?

A big test for Gavin Barwell came on Monday at the annual lecture for the Campaign to Protect Rural England (CPRE). While it would be unfair to characterise the organisation as England’s nimbys-in-chief, its members are not shy in holding politicians and developers to account, especially when it comes to the green belt.

The housing minister was joined on a panel by Shaun Spiers of the CPRE, Kate Henderson of the Town and Country Planning Association (TCPA) and Toby Lloyd of Shelter. If that did not quite represent all sides of the debate – a house builder would surely have proved too much for the blood pressure of many in the audience – it certainly brought many of them together in one place. Full marks to the CPRE for opening the event up to a wider audience via Facebook (housing organisations, please take note).

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In the bag

Originally posted on June 7 on Inside Edge 2, my blog for Inside Housing

With the Housing and Planning Act safely in the bag, ministers must be feeling pretty pleased with themselves – and it shows.

Complaints about controversial parts of the act were swatted away again and again at Communities and Local Government (CLG) questions on Monday with a mix of barely concealed contempt and dodgy statistics. But there were also some reminders of issues that may prove more intractable than the legislation assumes and of one big problem that is about to come to a head.

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Decline and fall

Coalition ministers rarely fail to taunt Labour with the fact that the number of affordable homes fell under the last government.

Conservative housing minister Mark Prisk and Lib Dem junior communities minister Don Foster deployed it yet again at DCLG questions yesterday.

Labour’s Jack Dromey attacked the government’s record on housebuilding and called for a rejection of the ‘economic illiteracy of austerity, which is pushing up the costs of failure through additional borrowing and soaring housing benefit bills’. He asked: ‘Does the housing minister agree that the time has come to invest in badly needed social and affordable homes to rent or buy, creating jobs and apprenticeships, bringing down the costs of failure and getting our economy moving?’

In response Foster was quick to deploy the favourite stat:

‘I think that the whole House will have been somewhat amused by the cheek of the hon. Gentleman, given that under his party’s administration we saw a reduction of 421,000 in the number of affordable homes. This government have introduced measures to reverse that trend, and we hope to announce further measures in the near future.’

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Second half

The coalition’s Mid-Term Review is as coy about what was billed as ‘the most radical reform of social housing in a generation’ as it is about what else will be done to tackle the biggest shortage of new homes in four generations.

The section of The Coalition: together in the national interest on Communities and Local Government is one of the shortest in the whole document. The five claims on what’s been done in the first half of the coalition may be many things but none of them involve housing.

Read the rest of this post on Inside Edge, my blog for Inside Housing