A King’s Speech fit for a government running out of time
Posted: November 7, 2023 Filed under: Energy efficiency, Housebuilding, Leasehold, Private renting, Rough sleeping Leave a commentOriginally written as a column for Inside Housing.
The good news is that the King’s Speech does promise a Leasehold and Freehold Bill. The less good is that this is not yet the end, and maybe not the beginning of the end either, for the tenure that Michael Gove described as ‘indefensible in the 21st century’.
As first reported by the Sunday Times last month, leasehold reform will be part of the legislative programme for the next parliamentary session, confounding fears that it would be left in the pending tray until the next election.
But it will still be a race against time to get a complex piece of legislation through parliament in little over a year and its most far-reaching proposal is only a consultation for now.
The other major housing measure in the speech is confirmation that the government will continue with the Renters (Reform) Bill and abolition of Section 21 after introducing them in the last session.
There was no mention in the speech or the background documents of criminalising tents, despite home secretary Suella Braverman’s controversial comments about rough sleeping being a ‘lifestyle choice’.
Something like it could yet appear in the Criminal Justice Bill as the government looks to replace the Vagrancy Act but for the moment it looks as though the leak over the weekend was designed to kill the idea.
More surprisingly, neither the speech nor the background briefing document mention rules on nutrient neutrality that the government claims are blocking 100,000 new homes. An attempt to do this in the Levelling Up Act foundered in the House of Lords but ministers had vowed they would try again as soon as possible.
There is also a glaring contradiction between comments about the importance of energy efficiency in homes in the briefing on the Offshore Petroleum Licensing Bill and boasts about measures to support landlords by scrapping the requirement to bring their properties up to EPC C in the background to the Renters (Reform) Bill.
Read the rest of this entry »Review – Britain’s housing crisis: What went wrong?
Posted: October 24, 2023 Filed under: Home ownership, Housebuilding, Planning, Television 1 CommentOriginally written as a column for Inside Housing.
Watch a few minutes of the new BBC housing documentary and you’ll get annoyed. Watch an episode and you’ll be full of righteous anger.
Over two hour-long episodes, Britain’s Housing Crisis: What Went Wrong?does a great job of revealing the key episodes along the way and the bad actors at the heart of them.
Interviews with leading politicians, special advisers, financiers and developers are intercut with archive news footage that neatly illustrates the way that things got steadily worse as national politics concentrated on the external crises like the credit crunch, Brexit, Covid and the rest. These are complemented well by interviews with activists who campaigned for action to put things right.
The programme does a great job of telling the story of, as the first episode puts it, ‘how a dream was destroyed by two decades of political and economic failure’ and of putting that in the wider context of house prices inflated by lax mortgage lending to the detriment of the rest of the economy.
It traces what’s gone wrong with the property-owning democracy promised by post-war politicians as house prices have soared to ever more unaffordable levels since New Labour won the election in 1997.
But why just two decades? And why start in 1997 when that edits out key parts of the social housing story: the Right to Buy, the strangulation of council housing and the rise of housing associations and private finance.
For home ownership, it starts after the zenith of the property-owning democracy under Margaret Thatcher. It also ignores the liberalisation of the financial system in the 1980s that led to the demutualisation of building societies, broke the link between savings and lending and opened the UK mortgage market up to international capital flows.
For private renting, it leaves out the ending of security of tenure in 1988 that would later underpin the rise of Buy to Let and landlords pricing out first-time buyers.
That also meant it did not put what’s happened to house prices since 1997 in the context of previous booms. Look back to 1989-1992 and you’ll see the key difference that it was followed by a crash that eventually made prices relatively affordable again. Starting in 1997 gives the slightly misleading impression that prices have almost inevitably gone in one direction.
Read the rest of this entry »Housing confined to the fringes at Conservative conference
Posted: October 5, 2023 Filed under: Housebuilding, Leasehold, Private renting | Tags: Conservatives Leave a commentOriginally written as a column for Inside Housing.
It’s hard to know quite what to make of a Conservative conference at which housing was – quite literally – a fringe issue.
The only mention of housing in the prime minister’s speech was a reference to ‘thousands of homes for the next generation of home owners’ that will be built at the new Euston terminus of HS2.
Thousands of homes were already going to be built under the existing plan but that is now set to be ramped up under a Euston Development Corporation that seems all about maximising developer contributions from luxury flats rather than meeting local housing need.
Even levelling up secretary Michael Gove had little fresh to say about the H part of his portfolio from the main stage and made no reference to plans for renter and leasehold reform.
Read the rest of this entry »Net zero u-turn leaves tenants paying the bills
Posted: September 26, 2023 Filed under: Energy efficiency, Private renting Leave a commentOriginally written as a column for Inside Housing.
The clue is in Rishi Sunak’s language. This is about more than just his claim to be putting ‘the long-term interests of our country before the short-term political needs of the moment’ when he is doing the opposite.
Nor even his pledge to scrap a range of ‘worrying proposals’ on bins, flights and car-sharing that have never actually been proposed.
No, the obfuscation in his speech last week on net zero really becomes clear when you look at the details with the biggest implications for housing.
‘Under current plans, some property owners would’ve been forced to make expensive upgrades in just two years’ time,’ he said.
Some property owners? Who could he mean? The prime minister cannot bring himself to say private landlords because they simply do not fit in with his narrative of Westminster imposing ‘significant costs on working people especially those who are already struggling to make ends meet’.
Because his announcement actually does the complete opposite. The plan to tighten Minimum Energy Efficiency Standards (MEES) for private rented homes would have saved millions of tenants £220 a year on average according to the government’s own impact assessment.
Read the rest of this entry »Housing and the cost of living
Posted: September 20, 2023 Filed under: Cost of living, Housing market, Private renting, Rents, Social housing Leave a commentOriginally written as a column for Inside Housing.
Inflation is starting to fall at last but the chances are what you pay for your housing has gone up along with the cost of everything else.
But this week’s inflation figures got me thinking about what we really mean by ‘inflation’ and how rising prices work differently in different tenures.
For starters, it all depends on the measure you use. The Consumer Price Index (CPI) is the one in the Bank of England’s inflation mandate so it matters most to its decisions on whether to raise interest rates or not.
CPI inflation affects the Bank’s decisions on interest rates which in turn drives mortgage rates so it is good news that it fell to 6.7 per cent in the year to August. However, CPI does not include owner-occupiers’ housing costs and it is not the index favoured by the Office for National Statistics (ONS).
If you’re not confused yet, on the ONS’s favoured measure of CPIH (which includes owner-occupier housing costs and council tax) inflation fell to 6.3 per cent in the year to August.
However, those costs are based on an estimate of the equivalent rents that owner-occupiers would be paying. There may be sound economic arguments for excluding rising asset values from the inflation calculation but rising house prices still mean rising housing costs for home owners that are ignored.
Old-style Retail Price Index (RPI) inflation – also falling but still considerably higher at 9.1 per cent – is the only measure that directly includes mortgage interest payments but is seen as less accurate than CPI and is no longer treated as on official statistic by the ONS. Despite that, RPI is still used to set price increases in some leases.
For all the differences between the three measures, it does seem clear that rising costs for renters and owners are playing an increasingly important role in inflation in household costs as the impact of the huge hikes in gas and electricity prices starts to recede. This ONS graph illustrates that only too clearly:
But what is really happening to house prices and rents? It all depends on who you believe.
Read the rest of this entry »Housebuilding assumptions about to be tested again
Posted: August 31, 2023 Filed under: Environment, Housebuilding Leave a commentOriginally written as a column for Inside Housing.
Is what’s good for housebuilders still what’s good for housebuilding?
That headline was the assumption that underpinned policy through the 2010s: first in the elimination of ‘red tape’ and then in the creation of Help to Buy. But it’s one that has been severely shaken by the building safety and leasehold scandals.
But two announcements made in the last week could provide some important signals about how things will play out in future.
The relaxation of the rules on nutrient neutrality seems at first glance confirmation of the traditional assumption: housebuilders have long lobbied against what is effectively a block on the construction of new homes in many river catchment areas and now they seem to have got what they wanted.
And in this case they have a point: this is a real issue that affects housing associations and local authorities prevented from building affordable homes as well as developers developing homes for sale.
But the issue with polluted rivers and seas is equally real and it very much remains to be seen whether what is being spun as ‘using our Brexit freedoms’ can address both.
Visit the Wye Valley, for example, and you will find no new homes being built on the grounds they will add to nitrate pollution but around 20 million chickens being raised in enormous sheds that are a much bigger source of it.
This looks to be more about agriculture and the state of the water industry than it is about housebuilding, even though it’s hard to hear Michael Gove arguing that ‘the way EU rules are being applied has held us back’ without wondering why in that case virtually every other EU country builds more homes per head than we do.
The second announcement potentially has even profound implications for the future of housebuilding and housebuilders.
The Competition and Markets Authority (CMA) launched a housebuilding market study six months ago but on the Friday before the bank holiday it published an update that reveals the issues that will be its main focus.
Read the rest of this entry »Is there a landlord exodus?
Posted: August 10, 2023 Filed under: Private renting Leave a commentOriginally written as a column for Inside Housing.
More pain for renters as landlords look to sell up. Renters compete with 20 others in battle to find a home.
Take even a casual glance at headlines about the dire state of the private rented sector and you come away with the impression that there is an exodus of landlords and that something, anything, must be done to persuade them to stay put.
The reality is more nuanced and confusing. While tenants are facing a shortage of properties to let and rapidly rising rents in many parts of the country, it is difficult to say why with any certainty.
Landlords face increased costs from rising mortgage rates, reduced tax reliefs and new requirements on the condition of their properties – even if it’s hard to remember them cutting their rents when interest rates fell close to zero after the financial crisis.
But the bigger picture is obscured both by a lack of reliable data and by claims that are either anecdotal or reek of self-interest.
Much of the data that does exist runs counter to the ‘landlord exodus’ narrative (so far, anyway, and there are time lags in the data). Government dwelling stock statistics estimate that the private rented sector grew by 123,000 homes between 2019 and 2022 but the sector has been pretty static since the middle of the last decade.
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Jules Birch 