April arrives with some rare good news

Originally published on March 29 on my blog for Inside Housing.

Sometimes it feels like I’ve written a blog at this time every year with the headline ‘April is the cruellest month’.

It’s not that I have a TS Eliot fixation nor (I hope) that I endlessly repeat myself but because ever since 2010 the start of the financial year seems to have meant yet another benefit cut or housing policy change to cope with.

This year is a bit different not so much because there is no bad news but because there is some good news as well. Here are some examples:

  • The u-turn on the withdrawal of support for housing costs for 18-21 year olds under universal credit announced on Thursday. This was a cumbersome policy that required significant exemptions and barely saved any money but it’s still a significant change to the original pledge to make young people ‘earn or learn’.
  • The Homelessness Reduction Act passed in 2017 applies from April 3. The legislation should be a big step forward in ensuring that more people get help earlier but despite a recent announcement on funding there are still well-founded concerns about whether councils have the money to implement it.
  • Claimants already getting housing benefit who move on to universal credit will from April be paid an additional two weeks of housing benefit. That may not be much consolation for the (in theory) five-week wait for their first universal credit but the payment (worth an average of £233) should ease the transition a bit –and it is not recoverable.
  • It will be unlawful for landlords to give new tenancies on the least energy efficient property from April 1 – all rented property will have to qualify for at least an Energy Performance Certificate rating of E so (in theory) tenants will no longer be stuck paying high heating bills for the worst F and G property.
  • More measures introduced against rogue landlords in the Housing and Planning Act 2016 come into force, including powers for councils to issue banning orders against the worst offenders and implementation of a database of landlords and letting agents convicted of some offences.

Bear in mind too that it’s not so long ago that I would have been writing about plans to apply a Local Housing Allowance (LHA) cap to social and supported housing from…April 2018.

For all that good news, though, the suspicion remains that it will at best mitigate the impact of policies already implemented and still in the pipeline.

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The real Budget agenda is clear

Philip Hammond’s Budget contains some big numbers and ambitious promises on housing but you don’t have to delve very far to find the real priorities.

Contrast, for example, what’s happening with housing, tax and welfare, two different measures that were heavily predicted and one that was desperately needed.

Stamp duty is being cut, but the chancellor has gone further than the expected holiday by abolishing it completely for first-time buyers of homes worth up to £300,000 or the first £300,000 of homes worth up to £500,000. The cut applies from now and will cost £3bn by the end of 2022/23.

Problems with universal credit are being addressed with measures including the scrapping of the seven-day waiting period, making advances easier to get and allowing continued payment of housing benefit for two weeks after a universal credit claim. The total cost is £1.5bn by 2022/23 and there is another delay to the rollout.

The universal credit changes are welcome but will still leave claimants potentially facing destitution and people in work thousands of pounds a year worse off than they would have been under the previous system.

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A look ahead to the Budget part three: welfare and tax

Originally published as a column for Inside Housing on May 20. 

Some very big questions on housing, welfare and tax are looming ahead of this Budget.

If there is not the same sense of raised expectations that surrounds the prospects for land and investment, the answers given by Philip Hammond on November 22 will still go a long way to determining what type of housing system we will have going into the 2020s.

I’ve written many times before about the way that the aftermath of the financial crisis in 2008 and the policies adopted under George Osborne since 2010 have combined to create a system in which older and better-off home owners have gained at the expense of younger and poorer renters.

A piece in the Financial Times last week used figures from the Resolution Foundation to quantify just how much: housing costs for households below average incomes rose by £714 between 2007/08 while they fell by £271 for those on above average incomes. The biggest gains went to the richest 10% of households, whose average housing costs fell by £1,206.

And that these figures do not include substantial increases in housing wealth over the same period as house prices have risen.

Many factors have driven this including falling rates of home ownership and rock bottom mortgage rates but policies on tax and welfare set by central government have also played a part.

So what could Hammond do to redress the balance?

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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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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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Crisis warns of surge in homelessness

Originally posted as a column for Inside Housing on August 10. 

If the true scale of homelessness revealed in a report for Crisis is shocking enough now, try looking at the projections for the future.

The report by Professor Glen Bramley of Heriot Watt University estimates that what it calls ‘core homelessness’ affected 160,000 households in 2016, an increase of a third since 2011.

That means that at any one time:

  • 9,100 people were sleeping rough
  • 68,300 households were sofa surfing
  • 19,300 households were living in unsuitable temporary accommodation
  • 37,200 households were living in hostels
  • 26,000 households were living in other circumstances, including:
    • 8,900 households sleeping in tents, cars or on public transport
    • 12,100 households living in squats
    • 5,000 households in women’s refuges or winter night shelters.

The report estimates that these include 57,000 families including 82,000 adults and 50,000 children, so that the total core homeless population is 236,000.

However, the total is forecast to rise by 76% in the next decade. After a steady rise to 167,000 households by 2021 the total is expected to accelerate over the to 238,000 by 2031 and 392,000 by 2041.

As the graph shows, the increases are expected to be especially sharp in unsuitable temporary accommodation, which includes bed and breakfast accommodation and out of area placements.

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Housing insecurity takes centre stage

Originally published as a column for Inside Housing on July 24.

Two reports over the weekend put housing insecurity firmly under the spotlight.

On Saturday the Local Government Association (LGA) made all the headlines when it highlighted the 120,000 children currently in temporary accommodation.

That’s not a new figure (it comes from homelessness statistics published a month ago) but that does not make it any less shocking. And the LGA puts it into real perspective by pointing out that the increase since 2014 is the equivalent of one secondary school full of children every month.

On Sunday, the Joseph Rowntree Foundation (JRF) published research looking at where much of that demand for temporary accommodation is coming from: evictions and forced moves from rented homes.

The report found that 40,000 tenants were evicted from their homes by landlords in 2015 and that private landlords are now carrying out more evictions than councils and housing associations.

That may not be much of a claim to fame for ‘social’ landlords but the rise in evictions reflects both the growth of the private rented sector and increasing use of Section 21 ‘no fault’ evictions by private landlords.

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