The Housing Question

If you follow my blog here, you might be interested in my new newsletter published on Substack.

The Housing Question is a newsletter about housing, but not just housing… politics, social policy, economics, history and anything else that helps makes sense of how we got here.

I’ll still be posting blogs here but mainly as an archive of articles I’ve published elsewhere. The Housing Question will explore issues in more depth, with more of a sideways look and with a bit more context and evolve over time.

You can read the first issue of The Housing Question here and more about the thinking behind it here. If you’d like to subscribe (it’s free for now) go here.


Crazy lending v insane housing system

Originally written as a column for Inside Housing.

It sounds crazy and it is. New mortgages at up to seven times a person’s income look like a reminder of the excessively loose lending seen before the financial crisis and the collapse of Northern Rock.

At the end of a year in which house prices have risen at their fastest rate since 2006 and interest rates began to rise from record lows, and at the start of one in which household incomes face a squeeze, the timing of the new deal from online broker Habito looks, shall we say, interesting.

Take that seven times income and add five times a partner’s salary and a couple each earning £25,000 could borrow £300,000 to buy a £330,000 home, well above the Nationwide’s new UK average of £255,000. Take out the loan for 40 years rather than the traditional 25 and they can reduce their monthly payments too.

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Ominous signs ahead of the spending review

Originally published as a column for Inside Housing.

The government’s refusal to extend the £20 a week uplift in Universal Credit has ominous overtones for housing’s prospects in the spending review to come in the Autumn.

Consider the evidence. Unemployment-related benefits in the UK are among the least generous in Europe, not least because of cuts made in the original plans for Universal Credit. Removing the uplift means benefits will fall to their lowest ever level as a proportion of earnings.

For all the government’s arguments about levelling up, the cut will hit a third or more of working age households in Wales, the North and Midlands against a fifth in the South East.

For all the government’s arguments about work being the route out of poverty,  almost as many people on Universal Credit (2.2m) are in work as unemployed and looking for work (2.3m). The remaining 1.6m are not required to work because of ill-health or having a child under 1. All will become £1,000 a year poorer. 

Of course there is still time for ministers to change their mind, but for the moment they look set to go ahead despite lobbying from the last six Conservative work and pensions secretaries to keep the uplift.

But can you imagine the last six housing ministers, or communities secretaries, doing the same as their colleagues at the Department of Work and Pensions? And, even if they did, do you think that the chancellor would be more or less likely to listen to them?

So Matthew Bailes is surely right to warn that the housing sector should be on a ‘war footing’ ahead of a spending review being conducted in the context of long-term structural pressures on the public finances.

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Conservative backbenchers are listening but are ministers?

Originally written as a column for Inside Housing on July 27.

Today’s report from the all-party Housing, Communities and Local Government (HCLG) Committee feels like the political fruit machine has finally come up with three social rented homes in a row.

That a committee with a Conservative majority should come out in full support of 90,000 social rented homes a year is significant enough in itself. That it should give its full backing to the case that such a programme will pay itself back in full to the Exchequer over the long term should feel like a vindication for those who conducted the sometimes lonely campaign for social housing.

That it should do so now, and argue that a social housebuilding programme should be ‘top of the government’s agenda to rebuild the country from the impact of COVID-19’, makes it feel like an idea whose time really has come round again.

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MPs call for action on rough sleeping and renting

The government will miss a ‘golden opportunity’ to end rough sleeping once and for all if it fails to turn temporary measures into something more permanent.

And ministers must beef up ‘toothless’ plans to protect renters in the wake of the Coronavirus crisis or risk a new wave of homelessness.

Those are the top-line messages from an all-party group of MPs today. But an interim report on protecting rough sleepers and renters from the Housing, Communities and Local Government Committee also goes much further in endorsing calls by campaigners for wider changes to the housing system.

They recommend:

  • A dedicated funding stream to end rough sleeping, likely to be at least £100 million a year
  • Improved support for councils to help people with no recourse to public funds who will otherwise end up back on the streets
  • Boosting the supply of suitable housing by re-establishing the National Clearing House Scheme set up after the financial crisis for unsold homes and giving councils more flexibility to buy them
  • Turning the increase in the Local Housing Allowance to the 30th percentile from a temporary into a long-term measure and looking at the impact of raising rents further.

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‘Stay alert’ proves to be good advice

Originally published as a column for Inside Housing on May 14.

So it turns out that the change in prime ministerial messaging was more finely tuned than we thought.

When Boris Johnson told us to ‘stay alert’ rather than ‘stay at home’ in his broadcast on Sunday, the sense was of a change of emphasis that signalled a slow release from the lockdown in England.

Most immediately that seemed to mean builders returning to work on construction sites on Monday, which it then turned out meant Wednesday.

By Wednesday, with only a few hours’ notice, the government was reopening the housing market in England with profound implications for anyone buying, selling or renting a home.

In a country in which we are still prevented from visiting our elderly parents or friends there was detailed guidance for any number of strangers working in other people’s homes.

In a sales market caught on the hop, we will now start to find out the impact of the crisis on prices as buyers decide whether to go ahead with deals they agreed before March 23, lenders decide whether to revise their mortgage offers and developers find out whether they can sell stock they can now work till 9pm to complete.

The sense in housing secretary Robert Jenrick’s statement to parliament on Wednesday was of a government desperate to restart a key part of the economy, as home sales feed into construction and all the other industries that follow in its wake.

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Tories out on a limb at housing hustings

Originally published on December 5 on my blog for Inside Housing.

The most illuminating answer in Wednesday night’s housing hustings came with the final question.

Politicians at the event organised by a coalition of different housing organisations were asked: ‘How much of your income do you think it’s reasonable and right to spend on housing?’

They were asked for a quickfire answer to an affordability question that covers lots of complicated issues. What counts as income and what as housing costs? Do you include housing benefit? Do you account for differences in incomes and tenures?

The standard answer is a maximum of a third – and that was the one given by John Healey for Labour, Sian Berry for the Greens and Tom Brake (who said 30%) for the Lib Dems.

But Luke Hall, junior housing minister in the last Conservative government, went first and went out on a limb with 50%.

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Beyond the good news on new homes

Originally posted on my blog for Inside Housing on November 14.

There was good news and bad news for the government in a new housing statistics out this week that illustrate the scale of the issues it still needs to address.

The good news is that housebuilding in England is up again: there were 241,000 net additional dwellings in 2018/19, an increase of 9% in the last 12 months and 93% in the last six years.

Net additional dwellings make up the government’s preferred measure of housing output and add together new build completions, conversions and change of use less demolitions.

That total is not just higher than at the previous peak of output before the financial crisis and credit crunch – it is also the highest total recorded since the government started collecting the data in this way in 1991/92.

Significantly, for the first time total net additions are higher than the 240,000 a year target that the last Labour government set in the wake of Kate Barker’s landmark review of housing supply in 2004

True, the big increase over the last six years also reflects just how low output had sunk in the wake of the credit crunch, and true a housing market downturn and recession in the building industry could yet derail progress.

However, with more recent council tax data indicating that annual output may now be over 250,000, the government’s target of 300,000 new homes a year by the mid-2020s no longer looks completely outlandish.

Indeed, a separate report from the Home Builders Federation (HBF) estimates that planning permissions were issued for 380,000 new homes in England in the year to June.

Housing secretary Robert Jenrick was quick to welcome the figures and make a campaigning point for the general election:

One more bit of good news is that the bulk of the net additions came from new build completions (213,660) rather than conversions of questionable quality (14,107 were delivered via permitted development, which was only a slight increase on 2017/18).

However, focussing purely on how many new homes were delivered does not tell us much about how the government is doing on other housing issues.

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Loans, homes and infrastructure

Originally posted on October 25 on my blog for Inside Housing.

The row over the hike in the interest rate for borrowing from the Public Works Loans Board (PWLB) is important in itself but it also raises a more fundamental point about social housing investment.

The rate increase imposed by the Treasury earlier this month seems to have been sparked by concern about councils investing in shopping centres rather than homes, which is ironic given that their rationale is to find new revenue streams to compensate for Treasury-imposed austerity.

However, it reinforces the impression that the government still does not trust councils to invest wisely in housing or anything else.

That view goes way back to 1979, of course, and the borrowing and spending controls that the Thatcher government imposed on council housing along with the right to buy.

But it also recalls the way that the government finally introduced self-financing in April 2012 but accompanied it with caps on borrowing and then undermined their business plans by imposing the 1% a year rent cut from April 2016.

Now, just at the point when research by Inside Housing reveals that councils are ready to scale up their housebuilding, the beancounters have struck again.

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Help to Buy and wider housing policy

Originally posted as a blog for Inside Housing.

So much has been written about Help to Buy that by now everyone knows what they think.

If you’re a housebuilder the equity loan scheme introduced in 2013 has meant more new homes and more buyers.

If you unable to get a mortgage, the scheme may have offered a first step on to the housing ladder that would not otherwise have been available but you may be wondering about the quality of your new build.

If you’re a critic, even if you concede the first two points, the biggest impact has been on housebuilder share prices, dividends and executive bonuses.

Evaluations published so far have provided evidence to back up both sides of the argument. On the positive side, 37% of borrowers said they could not have afforded to buy without it; on the negative, that could also mean 63% did not need help.

The new feature of a report published yesterday by the Commons Public Accounts Committee (PAC) is that it takes a step back and considers the impact on the government and on wider housing policy.

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