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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Watching the benefit cap

Originally posted on April 6 on my blog for Inside Housing.

What did see when you watched last night’s Panorama on the benefit cap?

Most people reading this here will, I think, have seen the impact of an arbitrary policy that leaves thousands of people with 50p a week towards their rent.

But outside my timeline on Twitter the view was very different. Roughly 95 per cent of tweets with the hashtag #benefitcap were hostile, but to the people featured in the programme rather than the policy.

There is nothing new in this divide of course – exactly the same thing happened with Benefits Street and How to Get a Council House and a Dispatches documentary on the cap last month– but this was an hour on BBC One on primetime.

Part of the problem lay with the way that Panorama framed the issue. This was clear in the first two minutes.

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Tax and the self-employed

For all the sound and fury over national insurance and the self-employed, it is still a sideshow in wider debates about tax, employment status and rights at work.

Philip Hammond’s unraveling Budget matters politically and it signals both the strength and the weakness of the government. Only a chancellor facing the worst opposition in decades could even consider a measure that breaks four separate commitments in the 2015 Conservative manifesto. Only a prime minister with a small majority could be forced to retreat at the first sign of Tory dissent and newspaper headlines about white vans.

hammond

Much of the blame lies with the ex-chancellor now trousering £1m a year on top of his MP’s salary for his advice and speeches. It makes you wonder how George Osborne is being paid for all that hard work and hope that he’s about to get clobbered for tax because it’s through a personal service company.

It was Osborne who in 2015 abolished Class 2 national insurance contributions (NICs) for the self-employed (from 2018) and gave them access to the higher state pension via Class 4. If he had introduced an increase in Class 4 contributions at the same time, few people would have complained. Instead he posed as the great reforming chancellor, agreed the manifesto pledge and left Hammond to fill the holes in his spreadsheet.

Combine these different measures and the treatment of the self-employed looks (reasonably) fair: most of the lowest paid will pay less, there’s a better state pension than before, and the burden falls heaviest on people earning more. But try and defend this week’s Budget announcement using that argument and you look like a shifty betrayer of ‘ordinary working families’ and ‘entrepreneurs’.

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Prevention and cure

Originally posted on January 30 on my blog for Inside Housing. 

As the Homelessness Reduction Bill passes its final stages in the House of Commons, it is time to mix celebration with realism.

The cause for celebration is that, once the bill has passed through the Lords, more people facing homelessness are entitled to help and that they will get it earlier. A landmark piece of legislation will make it on to the statute book 40 years after the Housing (Homeless Persons) Act 1977.

Conservative MP Bob Blackmandeserves great credit for leading the way but the bill was backed by Crisis, drew support from the government and MPs of all parties and has also had extensive input from Shelter and local authorities. Poppy Terry has a useful summary of how the bill has evolved on the Shelter policy blog.

Crucially, the bill was not just backed by the all-party Communities and Local Government Committee, it also went through extensive scrutiny. The issues are fiendishly complex but the comparison with the ‘back of a fag packet’ Housing and Planning Act could hardly be more marked.

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