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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Bigger questions lie behind public land failure

Originally published on July 24 on my blog for Inside Housing.

The government has wasted a ‘once-in-a generation opportunity’ to tackle the housing crisis by failing to develop a strategy for disposing of public land.

That’s the damning verdict on the much-vaunted Public Land for Housing Programme from the Public Accounts Committee (PAC) this morning (Wednesday).

The MPs find that by 2020 the government will have sold land for just 69,000 of the 160,000 homes it promised in England between 2015 and 2020 – and even that estimate relies on some heroic assumptions about progress over the next 12 months.

A second target to deliver £5 billion of receipts from the sale of surplus public land over the same period will be met – but only because of the £1.5 bn sale of Network Rail’s railway arches in February that was not part of the original programme.

When you consider that is happening in the middle of a housing crisis and in the wake of an austerity drive that has been closing public services around the country, that is an abject failure.

And those headline figures only tell part of a story that has an ever bigger failure to deliver affordable housing at the heart of it.

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The betrayal of the Addison Act

Originally published on July 22 as a blog for Inside Housing. 

As we celebrate the centenary of what was effectively the birth of council housing in 1919, it’s also worth remembering what happened just two years later.

Christopher Addison was the minister of health in the post-war coalition government of 1919 and it fell to him to deliver on the promise made by the prime minister, David Lloyd George of ‘a country fit for heroes to live in’.

The Housing and Town Planning (or Addison) Act that received Royal Assent 100 years ago this month (I started the celebrations early) was the landmark legislation that established the principles of council housing and also set out housing’s role in the wider health and wellbeing of the country.

As the King’s Speech put it in April 1919: ‘It is not too much to say that an adequate solution of the housing question is the foundation of all social progress.’

As seen at the time, especially by Addison himself as a surgeon before he became an MP, that housing question started with the consequences for health of the insanitary conditions and overcrowding suffered by millions of people.

The Addison Act provided generous subsidies for new council homes but it also set a framework that ensured that slum landlords did not profit from slum clearance.

Yet just two years later, in July 1921, the housing programme was abruptly scrapped. Only 213,000 of the promised 500,000 homes were delivered and central government assistance to replace and improve slums was reduced to a grant of just £200,000 (around £11m in today’s money) for the whole of Great Britain.

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Housing in the Tory leadership contest

Originally posted as a blog for Inside Housing on June 19 – updated June 21. 

Beneath the surface of a Conservative leadership battle dominated by Brexit and Boris Johnson there is a battle of ideas about the future direction of Conservative housing policy.

Put at its simplest, the battle is about whether to continue in the pragmatic direction signalled by Theresa May since 2016 or go back to the more ideological one taken by David Cameron before then.

But scratch a little deeper there are more fundamental debates going on about how far to go in fixing a housing market that most Tories agree has turned into an electoral liability for them.

Key questions such as how far the government should go in borrowing to invest in new homes and intervening in the private rented sector and the land market are back on the Conservative agenda.

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