Stable door

Originally published on Inside Edge 2, my blog for Inside Housing

Back in 2010 a Conservative housing minister mused that a period of stable house prices would be a good thing. Six years later – and in the context of the European referendum – it would apparently be a disaster.

A report today from the Treasury warns that prices could be 10%-18% lower by 2018 if we vote for Brexit next month. It’s part of a message that a leave vote would trigger what David Cameron calls a DIY recession that would cost hundreds of thousands of jobs.

I’ll leave the wider economic arguments to others (though note this would be quite a mild recession by comparison with the recent past) and concentrate here on house prices. This may seem a minor point by comparison with the more general impact on the economy but it’s interesting that this was the aspect of today’s Treasury analysis that George Osborne chose to trail last week.

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Keep your friends close – Part 2

Originally posted on November 30 on Inside Edge 2, my blog for Inside Housing

Part 1 of this blog looked at the apparent winners and the big losers from George Osborne’s announcements last week. But there is one more group lurking on the edges of the playground, ostracised by virtually everyone. What happened to George’s well-heeled former chums should be a warning to everyone else.

Buy-to-let landlords and second home owners thought they had worked hard, done the right thing, bought a house and then another (and another). Contrary to what everyone said about them driving up house prices and destroying local communities, they thought they were providing desperately needed homes and helping pay for local services. They thought the Conservatives were on their side after they blocked a Labour tax rise on second homes in 2010 and kept buy to let out of European mortgage regulation in 2013.

They thought George was ‘one of us’. After all, he made £450,000 profit on his taxpayer-funded second home and rents out his main home for £10,000 a month while he lives in Downing Street. And they voted Conservative in May when those horrible Labour oiks planned rent regulation and a mansion tax.

Their thanks for all this? Sand kicked in their faces with cuts in tax relief in July and the Chinese Burn of hikes in stamp duty and capital gains tax in November. The fate of these entrepreneurs and investors turned enemies of aspiration should be a warning for all those who are currently part of the Osborne in-crowd.

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Keep your friends close – Part 1

Originally posted on November 30 on Inside Edge 2, my blog for Inside Housing

For some reason, George Osborne made me think back to the school playground as he set out his spending plans for the next five years.

As the sidekick and heir apparent to the head boy, the chancellor has the power to get what he wants. First he had to correct his mistake from the Summer Budget when he was caught redhanded trying to steal the dinner money of most of the poor kids. He has now handed it back to the Strivers but will be waiting for them in the bushes to claim it back after school.

With that out of the way, he was free to get the gang together to build some homes, by which he means almost exclusively homes to buy. First in line were his main allies the housebuilders.

When you’ve already benefited from billions of pounds worth of loans, guarantees and relaxations in the rules on planning and energy efficiency, what’s another £2.3bn between friends? Yet this was different: the first time that I can remember that grant (presumably it is grant) has gone to pay for something that will not be recycled into more homes.

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Give and take: the spending review and housing benefit

Originally posted on November 17 on Inside Edge 2, my blog for Inside Housing

Two separate reports over the weekend claimed that housing benefit is being targeted by George Osborne for £2bn worth of savings to fix his tax credits debacle.

Iain Duncan Smith famously responded to Osborne’s July Budget ‘triumph’ with a fist-pumping celebration. The triumph soon began to crumble it became clear that the Budget really amounted to a message to work hard, do the right thing – and get screwed. As that realisation dawned, the scene was set for a struggle between the two Cabinet ministers played out in media briefings over an apparent raid on universal credit to pay for mitigation.

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Good cop, bad cop and mad cop

Originally posted on November 13 on Inside Edge 2, my blog for Inside Housing

Inside Housing: ‘Clark promises deregulation package’. FT: ‘Osborne eyes social housing stake sale.’ Daily Mail: ‘Duncan Smith’s great council house giveaway.’

Three rival visions for housing in England from three rival politicians who all think they know best.

Let’s assume some of this is the result of private disputes about budgets (especially between Osborne and IDS) playing out in public. The run-up to any spending review features media briefings designed to promote pet projects or scupper those of others. But this is still different: it’s not pet projects at stake here but potentially the entire future of housing. And the rival visions directly contradict each other.

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Coming soon: the sequels to housing association reclassification

Originally posted on October 30 on Inside Edge 2, my blog for Inside Housing

Few blockbuster franchises stop at just two films and the reclassification of housing associations in England as public sector will be no different.

The implications from Friday’s decision by the Office for National Statistics (dubbed Judgment Day II: the Reckoning by Pete Apps in his blog yesterday) are multiplying by the hour and are far too numerous for one blog. But here are some quick thoughts on the decision itself – and on possible sequels to come.

So what does it mean? First, and most seriously for George Osborne, it will add £60 billion of previously private sector housing association debt to the public sector balance sheet. The ONS decision says that this is likely to happen just in time for Budget 2016. Whoops! No wonder the chancellor sounded so relaxed/resigned about the prospect when questioned in a House of Lords committee last month (see my blog here).

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Between the lines

Originally posted on September 9 on Inside Edge 2, my blog for Inside Housing 

Another week, another George Osborne attack on housing associations – but this one comes at a crucial time.

The chancellor’s comments yesterday at the House of Lords economic affairs committee are not the shock they would have been three months ago. In the wake of his hostile joint article with David Cameron and the decisions taken in the Budget and a summer of hostile media coverage including THAT Channel 4 News report, they may be seen as par for the course.

But nobody will need reminding of what is at stake. Ahead of publication of the Housing Bill next month, discussions continue with the National Housing Federation over implementation of the extension of the right to buy. Ahead of the spending review in November, we already know the government will look to ‘refocus’ the housing budget on home ownership and who knows if there will even be a housing budget after 2018.

So the nuances of what he said yesterday matter. And it’s probably no coincidence that he made them where he did: the revolt in the Lords over charitable associations remains the biggest obstacle to extending the right to buy. You can watch here from just after 16:02 for the section on housing but here are some extracts that give some interesting indications of his thinking.

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