Is there a landlord exodus?

Posted: August 10, 2023 | Author: | Filed under: Private renting | Leave a comment

Originally 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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Neither long term, nor a plan

Posted: July 27, 2023 | Author: | Filed under: Housebuilding, Planning, Social housing | Tags: , | Leave a comment

Originally written as a column for Inside Housing.

Where to start with the government’s new ‘long-term plan for housing’ presented by Rishi Sunak.

If the opinion polls and by-election results are anything like accurate, the long term will only be a maximum of 17 months, but let’s assume that Rishi Sunak returns in triumph as prime minister at the next general election with the faithful Michael Gove as his housing secretary.

Together, they trumpet their achievement of delivering a million new homes over the course of the last parliament and say they are still committed to their target of 300,000 new homes a year without specifying exactly when.

But then what? The politics of ‘the right homes in the right places’ (aka non-Tory constituencies in inner cities) has worked out nicely, with the Conservatives keeping a swathe of suburban and rural seats thanks in part to their attacks on Labour plans to ‘concrete over the countryside’.

The reality on the ground is rather different. The housebuilding industry has scaled back its output in the wake of the housing market downturn even if fears of a full-blown crash were not realised.

In any case, that million new homes in the previous parliament was not much more than in the one that came before. Help to Buy to deliver 387,000 of the completions between 2013 and 2023 but has finished.

Some are calling for the scheme to be revived but the Treasury will need some convincing after what looked like a one-way bet on rising house prices turned into losses on many of the most recent equity loans.

Negative press coverage about Help to Buyers who need more ‘help’ is becoming a major headache that is only accentuated by problems that continue to dog leaseholders despite Gove’s Building Safety Act.

So much for the (possible) future, but look a little closer in the present and it is hard to ignore the echoes from the past.

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Housing by numbers

Posted: July 12, 2023 | Author: | Filed under: Affordable housing, Housebuilding, Social housing | Tags: | Leave a comment

Originally written as a column for Inside Housing.

Achievements may be thin on the ground but, six months into her job as housing and planning minister, Rachel Maclean does at least seem to have grasped one of the fundamentals of the role.

The manipulation of numbers by ministers is part of a proud tradition that dates back years but makes me remember fondly the days when Grant Shapps would routinely obfuscate between ‘social’ and ‘affordable’ housing and Iain Duncan Smith would use ‘statrickstics’ to back up his bogus claims about welfare cuts.

In her speech to Housing 2023 earlier this month, Maclean harked back to the glory days of the social/affordable shuffle with a claim that ‘we’ve got record numbers of social rent homes that have been built’.

Asked by Inside Housing how she squared that with the fall in social rent completions from almost 39,562 a year in 2010 to 7,644 last year, she went full Nelson to claim ‘that’s not a figure I recognise’. And she doubled down to boast that ‘we’ve delivered more social rented homes than under the last Labour government’. The actual number is, of course, less than half – and most of them were funded by the investment programme the coalition inherited from Labour.

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30 years after – part 2

Posted: July 3, 2023 | Author: | Filed under: Help to Buy, Housing associations, Housing market | Leave a comment

Originally written as a column for Inside Housing.

Kylie Minogue is riding high in the charts, Frankie Dettori wins the Ascot Gold Cup and the housing market looks to be in deep trouble.

In 1992, as in 2023, the more some things change, the more they stay the same.

Part 1 of this column looked at the similarities and the differences between the situation now and 30 years ago. This second part looks at the potential consequences for the housing system as a whole and what the government can do about it.

Arrears and repossessions: This is the issue burnt into the collective memory from the crash of the early 1990s, with repossessions peaking at 75,000 in 1992 and more than 400,000 owners losing their home in the decade as a whole.

The political impact was huge: the economic doom and gloom may well have contributed to the surprise Conservative victory at the general election in April 1992 but Black Wednesday that September ruined the party’s reputation for economic competence for years to come.

Partly thanks to that experience, and the losses made by lenders then, we are going into this downturn with arrears around half and repossessions about a quarter of the level at the equivalent stage in the 1990s cycle when prices were just beginning to fall.

A repeat currently looks unlikely unless we see second-round effects of sustained rate rises including a recession and large-scale job losses – but the odds on those are shortening.

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30 years after – part 1

Posted: June 22, 2023 | Author: | Filed under: Buy to let, Housing market, Mortgages | Leave a comment

Originally written as a column for Inside Housing.

Interest rates rising to tame inflation. Home owners worrying about how they will pay their mortgage. Politicians panicking about the economic and electoral impact.

Prospects for the housing market arguably look bleaker than at any time since the spectacular crash of the early 1990s (unless you are a renter waiting for prices to fall, of course).

Ultra-low interest rates helped the economy out of the downturn that followed the financial crisis in 2008 and have underpinned rising house prices over the last 13 years. But that whole era now seems to be over and the escape route looks blocked.

So how does the situation now compare to what happened 30 years ago? This first part of a two-part column looks at the similarities – and some significant differences.

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A turning point for social housing?

Posted: June 13, 2023 | Author: | Filed under: Cost of living, Council housing, Housing associations, Housing finance, Social housing | Leave a comment

Originally written as a column for Inside Housing.

For as long as I can remember the social housing business model seems to have been at a turning point.

From private finance to stock transfer, from affordable rent to welfare reform and from austerity to the rent cut, the policy changes have kept coming against a wider backdrop of financial crisis, Grenfell, Covid, Rochdale and the cost of living crisis.

For years it’s seemed that something has to give – until it does and landlords have to do more with less and tenants get less for more and apparent turning points become spinning in ever-decreasing circles.

This time around, though, you really get the sense that things can’t simply continue as they are and as they have been.  

That was what came across quite powerfully both from this week’s first hearing of the Levelling Up, Housing and Communities Committee’s inquiry into the finances and sustainability if the social housing sector and from the written evidence submitted in advance. The inquiry continues with a new set of witnesses on Monday.

This is not just about the impossibility of squaring the circle between competing priorities, of continuing to deliver new homes at the same time as fixing unsafe buildings, regenerating ageing estates and decarbonising existing homes.

And it’s no longer just about doing more with less either. The return of inflation, and even larger increases in construction prices, mean delivering the same with much less.

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Wales consults on right to housing and fair rents

Posted: June 8, 2023 | Author: | Filed under: Private renting, Rent control, Wales | Leave a comment

Originally written as a column for Inside Housing.

The right to housing. Rent regulation. Two of the most prominent big ideas for fixing the housing system have just gone out for consultation in Wales.

There is still a long way to go after publication of what amounts to the lightest of green papers and there is a big difference between proposing something and implementing it. However, taken together they represent a big challenge to current orthodoxy.

The green paper on housing adequacy and fair rents is the result of the cooperation agreement between Welsh Labour and Plaid Cymru. A white paper will follow but this is more of a call for evidence than a definite commitment to action or legislation.

The right to adequate housing is part of a United Nations covenant on economic, social and cultural rights that the UK signed up to almost 50 years ago. However, turning a vague aspiration to ‘housing as a human right’ into something more meaningful means incorporating it into national law, a move with strong support in the housing sector in Wales.

At the same time, as in the rest of the UK, support has been growing on the left and among private renters for some form of rent regulation.

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The long wait for meaningful reform of leasehold

Posted: May 29, 2023 | Author: | Filed under: Leasehold, Legal | Tags: | Leave a comment

Originally written as a column for Inside Housing.

Churchill was in no doubt that leasehold needs fundamental reform.

‘Who was more likely to be a contented citizen, the man who was a freeholder and who was in his property, or the man who was at the mercy of a colossal landowner?’ he asked in a Commons debate.

It says everything about the snail’s pace of progress on leasehold reform that the speaker was not Winston Churchill, the wartime leader and Conservative prime minister in the 1950s, nor even the more youthful Winston Churchill who was a radical land reformer as a Liberal MP in the 1910s.

Instead it was his father, Randolph Churchill, backing one of the first meaningful attempts at leasehold reform way back in 1884. Needless to say, the leasehold enfranchisement bill was blocked by a Conservative government full of property owners.

Flash forward 139 years and the same argument applies to almost five million leaseholders in England and Wales, the only two countries in the world that have still not abolished or radically reformed an archaic system that dates back to the Domesday Book.

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Modern methods, same old problems

Posted: May 10, 2023 | Author: | Filed under: Modern Methods of Construction | Tags: | Comments Off on Modern methods, same old problems

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The parties start to set out their general election stall

Posted: May 4, 2023 | Author: | Filed under: Help to Buy, Home ownership, Housebuilding, Planning | Leave a comment

Originally written as a column for Inside Housing.

If this week was a preview of what the main parties will be offering on housing at the next general election then it is probably best to look away now.

Perhaps the best that can be said is that, just as Thursday’s local elections only offer clues as to the outcome of next year’s big event, so the policies announced in the run-up to them may only be a taster of what’s still to come.

But that is being optimistic: otherwise we got some standard tropes from Labour about

home ownership and signals that the Conservatives could be about to reach back into their collection of greatest misses.

In a series of interviews on Sunday, Keir Starmer set out his ambition for Labour to be ‘the party of home ownership’:

This standard appeal to aspirational voters begs some obvious questions about how and what else.

Restoring targets for housebuilding recently scrapped by the Conservatives would be a good start and would come alongside existing Labour policies of ‘first dibs’ for local first-time buyers and a block on overseas buyers.

But whether that will be enough to generate 300,000 new homes a year (the targets hadn’t done that before they were scrapped) and whether even that will make homes more affordable must both be doubtful.

The following day (coincidence?) The Times reported that Rishi Sunak is putting Help to Buy ‘back on the table’ as a key plank in the campaign for a potential Conservative fifth term.

Government sources told the paper that the move could come in the Autumn Statement or the Spring Budget. ‘We cannot go into the next election without an offer for first-time buyers,’ said a minister. ‘We all know that homeowners are more likely to vote Conservative and we cannot cede this ground to Labour.’

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