The levelling up of MHCLG
Posted: September 23, 2021 Filed under: Housebuilding, Levelling up, Planning | Tags: DLUHC, MHCLG 1 CommentOriginally published as a column for Inside Housing on September 23.
So it’s farewell to the Ministry for Housing, Communities and Local Government and hello to the Department of Levelling Up, Housing and Communities.
As rumoured last week, we have new brass plates and stationery to go with new secretary of state Michael Gove at Marsham Street and its new office in Wolverhampton.
So what’s the difference between MHCLG and DLUHC? First, and most obvious, is that top billing for levelling up, as DLUHC becomes the unpronounceable in pursuit of the undefinable.
Second, it’s worth remembering why the rebranding to MHCLG seemed so significant when it happened three and a half years and three secretaries of state ago.
It was not just the H in the title, it was the way it was a deliberate echo of the 1950s and 1960s, when the two main parties competed with each other to build more council houses, and Macmillan rather than Thatcher seemed the reference point for the Tories on housing.
Third, an important caveat to that: although relegated to second billing, housing is still there in the name, which is more than can be said for its predecessors since the 1970s.
Within a department with significant extra responsibilities (not just levelling up but preserving the union as well) housing is at least still a priority of sorts. Local government has disappeared.
Read the rest of this entry »New secretary of state, same old problems
Posted: September 16, 2021 Filed under: Fire safety, Levelling up, Planning | Tags: Robert Jenrick 1 CommentOriginally written as a column for Inside Housing.
So it’s farewell to Robert Jenrick and time to ‘welcome’ a new housing secretary in Michael Gove.
The removal of Mr Jenrick is not a great surprise given a record that includes Westferry, failure to fix the building safety crisis and a flagship policy on planning reform that seems to be sinking.
Still more so when he ranked third bottom in Conservative Home’s survey of grassroots Tories on how they see members of the Cabinet. Only Gavin Williamson (sacked) and Amanda Milling (demoted) were less popular than him.
But he also got more money out of the Treasury for building safety than either of his two predecessors and that unpopularity may deserve more respect if it was based on nimby opposition to his planning reform agenda to deliver more homes
The former housing secretary was an early supporter of Boris Johnson and was loyal to the point of defending government policies on the Sunday morning talk shows that were scrapped in u-turns an hour later.
But loyalty is not always what counts in politics and as if to prove the point he is replaced by Michael Gove, the man who famously stabbed Johnson in the back in the 2016 Tory leadership contest.
The former Chancellor of the Duchy of Lancaster is the longest-serving current cabinet minister and brings with him cross-departmental clout that will include driving forward the manifesto commitments to deliver 300,000 new homes a year by the mid-2020s and end rough sleeping by the end of this parliament
He was the shadow housing minister before Grant Shapps so he will be familiar with the issues and the main players and he will get an early reminder today of the biggest new issue in his in-tray when leaseholders and building safety campaigners hold a rally in Westminster.
However, such an apparently known quantity still leaves plenty of questions about what his priorities will be and he retains a capacity to surprise (not least on the dance floor).
He comes with a reputation for delivery forged in the Cabinet Office but while some of this morning’s papers see his new job as central to the government’s mission to level up, others see it as a demotion or disappointment compared to his hopes of higher office.
Read the rest of this entry »Tackling the blight of second homes
Posted: September 1, 2021 Filed under: Cornwall, Planning, Second homes, Tax, Wales Leave a commentOriginally published as a column for Inside Housing
As the staycation summer starts to draw to a close, spare a thought for everyone living in the places where the rest of us have been on holiday.
Coastal areas and beauty spots in the countryside are well used to tourists but this year has really brought home the impact of second homes, holiday lets and relocating buyers on housing for locals.
On the beach on the Llyn peninsula in North Wales, the message is Hawl i Fyw Adra (the Right to Live at Home) while demonstrators have scaled the country’s highest mountains to protest that Nid yw Cymru ar Werth (Wales is not for Sale).
In the South West of England, there are persistent reports of Londoners snapping up homes they’ve seen online without even viewing them in person and of tenants being evicted to make way for lucrative holiday lets.
House prices beyond the reach of local wages and rents inflated by holiday lets have long been features of the market but a new development this year is an acute shortage of any homes for rent, let alone affordable ones.
A quick search on Rightmove for my home town in Cornwall reveals just four rentals listed all summer – a studio flat, two bedsits in an HMO and a retirement flat.
Read the rest of this entry »Why are house prices rising around the world?
Posted: August 20, 2021 Filed under: Coronavirus, Germany, Housing market, Inequality, Netherlands, USA Leave a commentOriginally written as a column for insidehousing.co.uk
News that house prices are rising at their fastest rate since 2004 highlights both the perverse effects of the pandemic and long-term problems with affordability.
Average prices across the UK rose by 13.2 per cent in the year to June according to the official UK House Price Index with Wales and the North of England leading the way.
While a low level of transactions suggests a need for some caution in interpretation, the same pattern has emerged in other house price surveys of double digit inflation led by regions outside London and the South East.
That confounds expectations at the start of the pandemic of recession about a declining market. The stamp duty holiday announced last Summer looks like an expensive mistake that has just helped fuel house price inflation.
In normal circumstances a bust might well follow the boom but continued support for the market will come from the estimated £180 billion in savings that households have built up during the pandemic and the wealth gap between housing haves and have-nots seems set to widen still further.
There is evidence of the same pattern emerging in housing markets around the world: annual house price growth across the 38 richest nations has more than doubled during the pandemic to hit 9.4 per cent, according to the OECD.
Read the rest of this entry »Shopping for homes
Posted: August 12, 2021 Filed under: Coronavirus, Local government, Permitted development, Planning Leave a commentOriginally published on August 12 as a column for Inside Housing.
Walk down most High Streets in the country and you’ll see empty shops and offices. What’s the best way to turn them into homes?
That’s the question this month’s extension of permitted development rights (PDR) in England attempts to address but is the answer as simple as the government makes out?
PDR for residential conversion has applied to some commercial buildings since 2013. But the regime has now been significantly expanded to more types of property and in some cases its demolition and replacement as well as conversion.
The results look they will be significant. Enthusiastic analysis by Nimbus Maps, which advises developers, says that around 31,000 properties and more than 8m sq m of floor space could be converted into 135,000 two-bedroom flats. The combined value of the buildings would almost double from £23 billion with commercial use to £43 billion as residential, it says.
A much more sceptical, but equally dramatic, view comes in research by University College London for the Town and Country Planning Association: based on case studies of Barnet, Crawley, Huntingdonshire and Leicester, it concludes that the total floorspace eligible for residential conversion will double under the new regime.
In terms of housing, the issues may seem straightforward. What’s the problem if the policy could create so many extra homes in buildings that would otherwise lie empty or under-utilised?
Read the rest of this entry »Latest attempt to end fire safety crisis leaves more questions than answers
Posted: July 30, 2021 Filed under: Fire safety, Leasehold | Tags: Robert Jenrick 1 CommentOriginally published as a column for Inside Housing.
While everyone will be hoping that Robert Jenrick has finally found a way through some of the worst aspects of the fire safety crisis, it’s hard not to be a bit sceptical.
The housing secretary issued a dramatic written statement just as MPs were preparing for the Second Reading debate on the Building Safety Bill last week. An accompanying press release from the Ministry for Housing, Communities and Local Government said that: ‘Leaseholders in blocks of flats with cladding should be supported to buy, sell or re-mortgage their homes after the government agreed with major lenders to pave the way to ending the need for EWS1 forms. It comes following expert advice that the forms should no longer be needed on buildings below 18 metres.’
However, that use of ‘should’ is telling because the announcement will achieve nothing if mortgage valuers and lenders do not accept it and if potential buyers are not convinced that the flats are risk-free. The banks quoted as supporting the agreement have only promised to review their practices so far.
Previous attempts to reform the EWS1 process have failed and – even though the small print of this announcement contains the potentially significant addition of a government-backed indemnity insurance scheme for external wall system assessors. This one has already hit a significant obstacle as the Royal Institution of Chartered Surveyors (RICS) says it cannot change its advice to valuers and banks saying they will not change their policies the government changes its own fire safety guidance.
Even if we assume that this is a chicken and egg problem that can be resolved, there are still grounds for scepticism about Jenrick’s attempt to close Pandora’s Box.
Read the rest of this entry »The pandemic and wealth inequality
Posted: July 15, 2021 Filed under: Coronavirus, Home ownership, Inequality 1 CommentOriginally published as a column for Inside Housing.
Three numbers from a report published this week sum up the financial impact of the pandemic on households – and housing is at the heart of it.
First, £50,000. That’s the average increase in the wealth per adult of the richest 10 per cent of households, says the report by the Resolution Foundation think tank.
Second, £7,800. The increase in the wealth per adult of households in the fifth decile, those right in the middle of the wealth distribution.
Third, £86. That’s the average gain per adult in the poorest 30 per cent of the population.
In part, these numbers reflect the pattern established in the 1980s and then accelerated after the financial crisis whereby wealth begets wealth.
But they also represent something new: the Resolution Foundation estimates that total household wealth has increased by £900 billion since the start of the pandemic, making the period we have just lived through the first recession since the end of the Second World War in which we have got richer.
Some of that is down to spending less (£125 billion) and getting into less consumer debt (£10 billion) but over 80 per cent of it is due to rising asset prices (£750 billion).
Some of that is driven by rising share values but most of it is due to increases in house prices, which are now up by more than 10 per cent since the start of the pandemic, fuelled in part by the stamp duty holiday.
Read the rest of this entry »Ominous signs ahead of the spending review
Posted: July 9, 2021 Filed under: Uncategorized Leave a commentOriginally 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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Jules Birch 