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Council housing is the missing solution to the housing crisis

LHG’s new report on council homebuilding – called ‘The Missing Solution’ – is launched at Labour Party Conference today.

As a country we have not built anything like enough new homes since Thatcher virtually ended council housebuilding in the early 1980s. The other sectors – private sector and housing associations – have been left to shoulder the burden but have never got close to bridging the gap.

Despite its faults, council homebuilding is a proven model, it is tried and tested, and it works. Grant is put in at the start to make it viable to build and to meet infrastructure costs, but no subsidy is needed thereafter – subsidising investment rather than consumption is the best use of resources. Because rents are much lower than market-related homes, large savings in housing benefit are made over the lifetime of the homes. And huge savings will be made in other services like health and education because so many more people will live in high quality, affordable and suitable homes. It’s a great investment in bricks and mortar that will eventually pay for itself – and contribute hugely to mitigating climate change.  

After a decade in which the government virtually ended support for new homes at council rents, there has been a spirited fight back in defence of council homebuilding. Councils are doing as much as they can to get building again, but they need a better partner in government. Councils must have the confidence to plan, better powers and resources to buy land and regenerate sites, more support from government to manage the risks inherent in a growing programme, and support generally to build the capacity needed to run a large programme. The responsibility is on government to provide sufficient grant and to reform land and planning to make the job doable.

If this government doesn’t act, Labour needs to think through now what is needed to hit the ground running when re-elected into government. There will be no time to lose.

The report makes a big start on this task. Written by a range of political figures who have recent experience of building council homes around the country and a range of experts who have worked in the field for many years, it considers the gamut of financial, governance and organisational issues that have to be tackled, with lots of local examples of successes and challenges.

Lucy Powell’s speech to Conference this afternoon and the excellent composite resolution moved by Labour Housing Group Chair John Cotton, followed by the launch of the report, are a good start. As John said, the aim of all this work is to make a reality of Labour’s commitment to build 150,000 social rent homes a year including 100,000 council homes by the end of a Parliament. Detailed work and a comprehensive plan are needed to make this ambition a reality. We hope the report will help us in these tasks. 

The report is available here:

And the Executive Summary is available here


Is edited by Rachel Blake, Nick Bragger, Steve Hilditch and Sheila Spencer, with additional editing and design by Simon Hilditch, and contributions from Rachel Blake, Steve Cox, Aileen Evans, Paul Hackett, Steve Hilditch, Jenny Hill, Alison Inman, Satvir Kaur, Janice Morphet, James Murray, Julia Park, Steve Partridge, Jerry Swain, Sharon Thompson, Mike Todd-Jones, Ed Turner and Martin Wheatley.

<strong>Steve Hilditch</strong>
Steve Hilditch

Editor and Founder of Red Brick blog.
Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone.

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For someone involved in housing for 50 years, it is impossible not to feel embarrassed and ashamed by the appalling conditions lived in by some social tenants as exposed by Daniel Hewitt’s ITV documentary, Surviving Squalor.

The ‘regulator’ (sic) should be throwing the book and the ‘Ombudsman’ (equally sic) should be down on them like a ton of bricks. Sadly, they are both ineffectual. I would like tenants to be able to sue for damages more easily and for landlords to be prosecuted. But where are the highly paid Executives, and where are the Boards and where are the councillors who run these organisations?

We are rightly angry at some of the cases shown and it is excellent journalism especially when the tenants themselves are allowed to speak. Once again, we see people who are articulate but totally exasperated, just wanting a decent service in return for their rent and service charges.

But equally fine journalism and campaigning has also exposed many a bad private landlord over the years. The cases of many badly treated lessees and shared owners have also had wide coverage recently. And I recall that some of the worst housing conditions and poverty I ever encountered were amongst elderly homeowners. So, the issues are broader, not confined to a single tenure, and must be properly examined.

Across all tenures, our standards and expectations are just too low – and falling behind all the time, especially when health implications and climate change are considered – the remedies are just not good enough, and accountability is totally inadequate.

At the core, we just don’t invest enough of our national wealth in homes, and we don’t invest because we do not value highly enough the human dignity that comes with living in a decent, appropriate, warm, dry, affordable home.

There was plenty to be annoyed about in the programme. The practised apologies seemingly written by PR people. The disgrace that urgent action is taken when a bad case gets on the telly – ITV might quickly find itself inundated as the country’s leading housing advice agency. The lack of intervention by people who should intervene. The quick return to normality that inevitably follows.

But one thing above all made me feel sick. Robert Jenrick, the Housing Secretary, said it was nothing to do with the government, it was all down to bad practice and mismanagement. However guilty we feel, rightly, housing people should condemn this oleaginous brass-necked man.

His Party abolished the regulator, abolished the Audit Commission, abolished the National Tenant Voice, cut housing by 60% as its first act in 2010, ended new funding for social rented homes, introduced chaos into rent setting so no-one could plan, and pushed landlords into taking money out of housing management, maintenance, and capitalised repairs to ‘cross-subsidise’ new build as the only way of getting new homes built.

This is not an excuse for landlords, and it is not all about money – some of the worst disrepair cases in the programme seemed to be in blocks that had expensive new cladding – but for Jenrick not to admit that government drives this increasingly rickety machine is buck-passing of the worst kind.

I do think social landlords have lost sight of the bread and butter, their first duty, that homes must be properly managed and properly maintained. I know only too well that it is possible for things to go wrong even when you think you are doing it right. But now there is too much emphasis on shiny new schemes, sparkling financial products, innovative new structures, and fancy regeneration.

Development is seen to be exciting and strategic, management boring and messily detailed. Housing Association Boards do not have enough people on them with experience of running social housing in which people with relatively small incomes live. They are stuffed with people interested in development and finance, important skills but not enough. I suspect many of them never meet a tenant. I know quite a lot of dedicated councillors and I have almost no explanation as to why local councillors in the boroughs depicted were not up in arms.

Of course, some people jumped at the opportunity to denounce social housing. This is where the greatest peril lies. All too often, social housing has been made to fail by government, even if too many social landlords have also been complicit. Yet the sector has rallied due to the efforts of tenants and campaigners, and it has survived an attempt to end it altogether.

It is still the case that millions of people would be delighted to get a social rented home. Most social tenants are satisfied with their homes, the vast majority are in reasonable condition but lacking investment since the end of the decent homes programme.  

Social rented housing is still the main hope in the search for a solution to the housing crisis. But the sector must stop shooting itself in the foot, speak out for tenants, be more competent, be more caring, and be more focused on the core task of running what we already have well.

<strong>Steve Hilditch</strong>
Steve Hilditch

Editor and Founder of Red Brick blog.
Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone.

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Welcome to the new Red Brick blog!

Red Brick was set up in 2010 as a place for progressive debate around housing issues. Ten years in, after 800 blog posts, it has a new web location, a revamped design, a new editor, and there are ambitious plans to increase the number of contributors.

The challenge is the same: we stand for decent affordable housing for all but there are many and various ways to get to that goal and many people have a contribution to make to the debate. We scrutinise every step of Tory policy and almost always find it wanting.

Covid has exposed how weak our housing system is. Despite the fact that it costs a fortune, much of it is spent in the wrong ways, subsidising demand and not supply, supporting one tenure at the expense of the others, failing to meet the most dire housing need. Solutions are possible – Labour’s Manifesto for the 2019 Election contained many of them – but we have to work them out in detail and make sure the public is aware of them.

One thing seems certain: housing will be an even bigger and more desperate issue after Covid. More people are fleeing domestic violence, more people are facing rent arrears and eviction, social housing is being deprioritised even further. There may be huge disruption in the housing market as the financial implications work through. It will be a time where clear analysis, workable policy proposals, and effective campaigns are needed more than ever. 

Red Brick blog is linked to the Labour Housing Group but is editorially independent. Ten years ago, we chose the strapline ‘The Place for Progressive Housing Debate’ because we welcome all contributions and, whatever our individual views, Red Brick has no factional inclinations.

Except we’re not very keen on Tories or Tory solutions!

We are happy to publish both sides of an argument and to enable all opinions to be voiced. However, we celebrate diversity, are steadfastly pro-equalities and against discrimination in any form. 

I hope you will continue to read and value the blog so it can continue to contribute in a small way to progressive housing debate. It would be even better if you contributed – just pitch your idea to us, we’ll be happy to help you to put it together for publication.

Thanks to Chris Worrall, Sheila Spencer and Ross Houston from the LHG Executive for the work they’ve put in to make this transition happen. LHG shows signs of a real resurgence as a membership and campaigning body within Labour, which can only be a good thing.

Thank you for reading Red Brick over the last decade and I hope you will continue to do so for years to come.

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

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Coronavirus: the poor must not be made to pay for the crisis

It seems likely that one of the groups that the Coronavirus pandemic is going to hit hardest is private tenants. The government’s commitment to do ‘whatever it takes’ appears not to apply to them.

One of the biggest policy fanfares since the crisis began was their trumpeted ‘ban on evictions’. It was a triumph of spin over substance because all they did was was extend the normal period it takes to evict tenants for arrears, adding in a rather soggy new ‘pre-action protocol’. People quickly grasped that this would just store up problems for a later avalanche of cases – unless the policy is extended, the avalanche will start at the end of June. It is an inadequate policy response to the huge additional housing problems being created for private tenants by rampant unemployment, reduced hours and furloughing at 80% wages.

While we wait for the ‘eviction ban’ to be extended or otherwise, an unknown number of private tenants are unable or significantly less able to pay their rent, including those on housing benefit or Universal Credit which only meets part of the rent. Given how high rents are, their debt will rise rapidly and quickly become unmanageable. For many there is little prospect of relief: the economic crisis arising from Coronavirus could last years not just the few months of lockdown. A survey for Shelter estimated that 1.7 million private renters fear losing their jobs this summer. This is a timebomb, not just for tenants but also for landlords and, if homelessness results, for the State.

In the absence of any new policy from government, Labour’s new Shadow Housing Minister Thangam Debbonaire set out a ‘five point plan’ to tackle rent debt. This involves 1) extending the pause to evictions, probably to six months (when other measures should be in place); 2) offering more legal protection to people who got into arrears due to Covid; 3) allowing tenants ‘at least 2 years’ to pay back any arrears accrued during the crisis; 4) giving tenants greater protection from bankruptcy due to arrears; 5) making improvements to Universal Credit to help people pay their rents.

Of course it is right that avoiding evictions should be the top immediate priority. The government seems likely to extend the ban beyond the end of June, but it has not said so yet. The weakness of Labour’s position lies in ‘two years to pay off debt’. This is not a holding position that can be addressed later: the debt is being incurred now and the issue must be tackled now before it is too late.

The policy has not gone down well in many Labour and tenant circles and there are calls for Labour to back a suspension of rent payments to mirror the mortgage holiday. If postponing rent simply creates debt for the tenant, cancelling rent passes the cost on to landlords. As a slogan, ‘make the landlords pay’ has an attraction on the left. I have never supported private renting as a tenure for people on low incomes, but making the sector even more volatile by denying landlords rental income will create conflict and more landlords will look to either remove tenants by any means or to escape from the sector. Good, some people will say to the latter, but this would not be the planned contraction I would like to see, and chaos will have bad outcomes for tenants. And there is an argument that government will end up paying anyway because it would be contrary to human rights legislation to deprive landlords of their legitimate income.

Two principles should guide Labour’s response. First, private tenants should not be left in debt due to Coronavirus. Second, and related, it is the responsibility of the State to ensure that tenants have the means to pay their rent and not become homeless. Some are arguing that Labour should only propose pragmatic policies that the government might accede to. But Labour’s analysis also shapes and informs public and media opinion, and at the moment Labour’s message seems to be that private tenants should have to repay their Covid debts.

So, what policy would help tenants pay their rent NOW rather than slide into debt? Housing benefit used to do this and could do it again. It is a known system and would not have to be invented from scratch like the government’s job protection schemes. HB should pay 100% of people’s rent within reasonable limits by removing the freezes, caps and other restrictions. For those on Universal Credit the system would have to be amended to incorporate the principle of paying 100% of rent through the housing component. It could cater for people put out of work completely, people who face reduced hours, and people who are furloughed at 80% of previous income.

Reinventing housing benefit would mean: Landlords would get paid, there would be no crisis of evictions, no explosion of harassment, and no long term threat to supply;  Tenants would avoid large debt and its terrible consequences; and the State would help people in genuine distress due to the Covid crisis and avoid future homelessness. The cost would fall to government and they would be doing ‘whatever it takes’. Labour is halfway to the policy already with its proposals to reform Universal Credit.

When housing benefit was introduced – by the Tories in the 1980s – they accepted the principle that the State should take responsibility for ensuring that tenants can pay their rent whatever their circumstances. This was not through generosity, but part of their ideological shift towards the marketisation of housing: reducing subsidy to ‘bricks and mortar’ (which kept rents low) necessitated increasing income support to enable tenants to pay much higher rents. It was the policy known by the shorthand of ‘letting housing benefit take the strain’. Their deregulatory approach led to the resurgence of private renting that has carried on ever since. It is a free market system but with huge costs for the taxpayer. But it is suited to helping in the current crisis.

Cameron and Osborne, even more right wing than Thatcher, hated the idea of a benefit that covered all of the rent. Under austerity, an endless series of restrictions, caps and freezes forced millions to use a large slice of their money for other things, like food, to pay their rent. Many couldn’t do it, so eviction from a private tenancy has become the most common cause of homelessness. But these policies can all be reversed, and it is not an extreme or fanciful position to call for HB to take the strain.

The idea is not dissimilar to that proposed by Congresswoman Ilhan Omar in the USA. She has proposed cancelling rent and mortgage payments with landlords and mortgage holders having their losses covered by Federal Government. That solution fits the USA – where 31% of Americans could not pay rent this month – but the housing benefit approach fits the UK circumstances better. The principle that it is the State’s responsibility is the same.

Labour’s policy must be driven by a simple rule. The poor paid for the global financial crash. They must not also be made to pay for the global pandemic.

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Editor and Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone.

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NTV – the wheel waiting to be re-invented

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

Ten years ago this month, the new National Tenant Voice (NTV) appointed Richard Crossley* as its new chief executive, appointed the National Tenant Council and its board, and started business.

Sadly, it was to be very short-lived, as the general election swept Labour and its dynamic housing minister John Healey MP out of office and installed the Tory/LibDem government with Grant Shapps in charge of housing.

One of Shapps’ first acts was to axe the new-born NTV to save a miserable £1 million a year. Shapps, who could have invented double-speak, ludicrously claimed he wanted tenants to have a stronger say in things. But he saw the NTV as a waste of money as he laid waste to the social housing regulatory system, also abolishing the Tenant Services Authority and the Audit Commission.

The shadow National Tenant Council gathers for its first meeting, 2010.

The NTV had a long gestation and I had the privilege of independently chairing the Communities and Local Government department’s project group, which brought together a majority of tenants with all the other key housing bodies and the civil servants to find a way of meeting the common goal of strengthening the voice of tenants within UK housing. It was a complex process because we wanted the new organisation to have the status of a non-departmental government body, and the rules for establishing one were suitably complicated and not easily adapted for an organisation which would be run by tenants and not appointed by government.

The idea for the NTV as an integral part of the new structure for social housing regulation arose from an earlier report by Martin Cave which was broadly welcomed and accepted by government. The project group conducted a major consultation exercise involving 16 regional meetings with over 1000 tenants, collecting over 160 written responses. There was a huge and occasional fractious debate about the precise role and function of the NTV but the consultation broadly supported the project group’s proposals.

A lot is said about social tenants, and others who live on social housing estates, much of it based on ignorance.  Tenants are stereotyped and stigmatised, especially in the media but also by some politicians and housing professionals.  By grasping the opportunity presented by the NTV, there is a chance that the authentic voice of social tenants may at last be heard as citizens of equal worth. The NTV will be a voice for change and over time it could help transform the culture of social housing – and thereby improve the lives of nearly 10 million people. 

From the introduction to ‘Citizens of Equal Worth, The NTV Project Group’s Proposals for the National Tenant Voice’, Report to Communities and Local Government, October 2008

The NTV’s vision emphasised that it would be a resource for tenants (which  included leaseholders and shared owners) of social landlords, an independent organisation that would be accountable to tenants, with clear values of inclusion, accountability and transparency. It would not replace the existing national and regional tenant representative organisations, but would be a business-like support organisation working for all tenants whether in existing organisations or not. It would not in the first instance cover private tenants, but the plan was to consult about if, when and how it would extend its remit.

The key roles of the NTV were

  • advocacy – helping tenants collectively to speak for themselves to put their views to government and other bodies, placing particular emphasis on seeking and promoting the views of tenants whose voices are rarely heard.
  • Research – identifying the impact that policies have on tenants and discovering the views of a wide range of tenants on policy issues.
  • Communication – providing good information to tenants and developing a two-way dialogue with them.
  • Support – for the existing representative tenants’ movement to help it to develop and strengthen.

The working group and ministers believed that it was important to have a significant number of tenants involved in the governance structures of the NTV – to build its base, to encourage diversity, and to draw more people into policy discussions. It therefore had a National Tenant Council of 50 tenants to consider policy issues and a board of nine tenants and up to 6 independents to take legal responsibility for and to manage the organisation. An arm’s-length accountability committee operated an open recruitment process for the organisation.

Over the last 10 years it has become clear to any observer that the decision made by the incoming Tory government to scrap Labour’s regulatory structure, including the NTV, was a short sighted knee-jerk mistake. Whatever Labour was in favour of, the new government was against. Despite the best efforts of some social landlords and many tenants, since then the voice of tenants has become weaker when it needed to be much stronger. The government (and much of UK housing) took its eye off the ball of maintaining and improving the quality of services to tenants.

It took Grenfell to open the eyes of much of the housing world, the government, and the public to the fact that tenants were not being listened to and their interests were not being served as they should be. Now, once again, there is some acceptance of the need to hear tenants’ voices and to ensure that social landlords are monitored and regulated effectively (as all housing providers should be). But forward movement is even more glacial than the process ten years ago.

Ten years ago, the structure of regulation, with the NTV, was much closer to the right answer for social housing than anything we have now.

The NTV is a wheel that is waiting to be reinvented.

*Richard Crossley was the Chief Executive of the NTV.

Richard died in 2014 of a rare cancer. You can read my appreciation of his life and his work for tenants here.

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Voluntary Right to Buy: Should housing associations be ‘proud to be involved’?

The headline is based on an Inside Housing article this week by a director of a national housing association, Stonewater, which is one of those taking part in the government’s pilot scheme in the Midlands. Sue Shirt says they are ‘unashamedly supportive of the VRTB’ and ‘proud’ to be selling off their houses, estimating that around 170 will be sold in the pilot period (presumably in most cases houses currently let at social rents). She gives two main reasons for this. One is that they are giving tenants what they want. The second is that (unlike with council housing right to buy) they plan to replace every home sold. She says that it keeps tenants in their communities whereas otherwise they would move out to buy. In Stonewater’s view, VRTB ‘helps the social housing journey’ by enabling financially secure tenants to buy instead of rent.


Superficially, of course, Ms Shirt has a point. No doubt the lucky buyers of Stonewater houses are over the moon, especially as they have qualified for discounts of up to 70% – or £82,800 outside London – the same levels as for council right to buy. They’ll have to raise a mortgage but instead of paying rent they’ll have a valuable asset to pass on to their children or to sell or let out at a later date. In many ways it’s surprising that the pilot scheme isn’t proving more popular. Stonewater has so far completed just 11 sales, and if it reaches its projected level of 170 it will have sold just two per cent of its stock in the region. That’s a lot of effort to reach such a small proportion of tenants, and the government is said to be considering extending the pilot scheme to raise more interest.

What is missing from Sue Shirt’s assessment is any examination of the wider picture if the pilot scheme does turn out to be successful. Of course, one reason why a housing association like Stonewater is willing to take part is that it gets full and instant recompense for the hefty discounts it has to give, so they can aim to have one for one replacement of their own stock. The money comes from a Treasury pot of £200 million created for the purpose. An extended scheme would need more money. Failing some magic by the chancellor, the only sources are the rest of the housing budget or reviving the Treasury’s original plan, which was to force councils to sell their high-value council houses and hand most of the money over to subsidise housing association discounts.

Either way, a lump sum worth up to £82,800 to one ‘financially secure’ tenant who buys their home comes at the expense of the same amount invested in new social housing for people who are struggling to rent, let alone buy. It is not the narrow perspective of whether Stonewater replaces one for one, the essential point is that the money available in the housing system will produce fewer additional homes in total for people in need.

Sue Shirt says that the ‘crucial point’ about VRTB is that it helps more people into much-needed, modern, energy-efficient housing. But this is a very suspect argument. After all, tenants exercising VRTB are in a nice comfortable home already, and while the mortgage they will now pay releases a receipt that Stonewater can reuse, that’s only because the rest of the sale price will be made up by the government.

A supposed advantage is that VRTB buyers stay in their home when they might have moved out to buy elsewhere. While this may be advantageous for the community in the short term, it ignores the issue of what happens when the buyer eventually moves. A house that could be relet at social rent may well end up in the private rented sector, as is frequently the experience with the council RTB. It will be let at higher rents – costing more in housing benefit if that is needed – and quite possibly with minimal management, causing problems for other tenants in the area.

While the pilot scheme might involve selling a relatively small number of homes, up to 3,000, the real danger lies in its potential success. This could have two effects. One is that it hastens the day when all housing associations are persuaded into a ‘voluntary’ scheme by attractive offers about how fast they can access the receipts, without answering the crucial question of where the money will come from once the Treasury’s £200 million has been spent and what the impact of that will be on other programmes. Back in 2015, when it was planned to use ‘council high value sales’ to fund the VRTB, in Selling off the Stock CIH showed that a popular VRTB scheme might require all the receipts from selling high-value homes, leaving no money for replacements.

The second effect will be to prolong the right to buy in England when it should be on its last legs. It was scrapped in Scotland in 2016, it died in Wales earlier this year and soon it may be gone in Northern Ireland too. Only in Whitehall do politicians continue to find ways to breathe life into a policy that’s not relevant to today’s problems. Let’s put some more nails in its coffin, not try to revive the corpse.

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“A decent, affordable home ought to be a human right. Under Labour, it will be”, says Tom Copley AM

We wanted to draw your attention to today’s edition of Labourlist, which is guest-edited by Tom Copley, Labour’s housing spokesperson on the London Assembly and chair of the London Labour Housing Group.

No surprise, Tom’s edition has a heavy housing focus. In addition to his overview, there are articles by

  • Karen Buck MP on her groundbreaking private member’s Act – the Homes (Fitness for Human Habitation) Act
  • Cllr Farah Hussain, Cabinet member for housing in Redbridge, on the Homeless Reduction Act and why the Act will fail unless more resources are put in.
  • Mayor Phil Glanville of Hackney on achieving high standards in new build homes.
  • Cllr Linda Woodings from Nottingham on the challenges facing councils who want to build new council houses.
  • Mayor Sadiq Khan on his approach to tackling the housing crisis in London.

There are some good reads here, and some clear statements of what Labour is doing in Parliament and on the ground. As Tom concludes:

This is just a small snapshot of what Labour is doing where we are in power. But we all know that to truly solve the housing crisis, we need a Labour government. A decent, affordable home ought to be a human right. Under Labour, it will be.

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SHOUT’s evidence to the Affordable Housing Commission

Last week we published Dave Treanor’s excellent evidence to the Affordable Housing Commission, focusing on the issues of taxation, housing subsidies, land, and construction, and making a number of comparisons with the experience in Germany.

Today we’re highlighting the evidence submitted by SHOUT, the campaign for social housing @4socialhousing . As it is a long read, the full evidence has been published on Medium and can be found here.

SHOUT’s evidence starts by examining the definitions of ‘affordable’ and ‘social’ housing which have become increasingly bizarre over the past ten years as the government has sought to hide its dreadful performance in delivering homes for people on low incomes. It concludes that traditional social rent is the only housing product which reliably provides genuinely affordable homes to people on the lowest (in and out of work) incomes across the whole country.

Social rent is an exceptionally robust model of housing provision, and remarkable in the degree of self-financing it involves. It meets four key objectives:

  • First, tenants pay a rent that is genuinely affordable (on all definitions).
  • Second, rents broadly cover the costs of providing homes over the long term.
  • Third, rents at these levels minimise the requirement for housing benefit, making it easier for people to make work pay.
  • And fourth, long term very substantial savings in benefits fund the initial subsidy required to get the homes built in the first place.

The evidence takes an overview of the central issue of rent. Based on research by Capital Economics, it concludes that the current policy of rent reductions is unsustainable, that the single national policy for rent should be replaced by regional assessments, that the future policy of rent increases is only sustainable if there are corresponding increases in benefits, and that investment has become far too dependent on rent surpluses, there must be a resumption in grant for social housing if we want to build much more.

The core of SHOUT’s case remains the economic assessment undertaken by Capital Economics which showed that a programme of 100,000 extra social rent homes a year is not only feasible but would be an econnomically sound long-term choice for the country to make. It is also probably the only policy that woul make it possible for the government to achieve its stated goal of building 300,000 new homes a year by the mid-2020s.

Capital Economics’ main findings included:

  • in almost all parts of the country, the cost to the welfare system of supporting low income households in private rented housing (and, to a very considerable extent, in homes at Affordable Rent) is greater than supporting equivalent households in homes at social rent;
  • the decline in the stock of social rent homes, and rising private rents, means that the cost to the welfare system arising from the housing costs of low income households has increased very fast in recent years: it has nearly doubled in real terms in the last 10 years, and now accounts for over 37 per cent of housing benefit spend;
  • if this trend were to continue, expenditure on housing benefit would increase, by the end of the OBR’s long-term forecast period in 2065-66, to £197.3bn in nominal terms, or nearly £62bn a year at today’s prices, with the private sector component more than quadrupling, to £38bn at today’s prices;
  • set against the significant risk to fiscal sustainability of carrying on with current policy, a policy of resuming the development of homes for genuinely affordable rent at scale “is fiscally sustainable and economically efficient.”  It would bring about “a sustained structural improvement to public sector finances – by reducing spending on welfare payments and stimulating higher tax receipts.”  Other things being equal, public borrowing would be 0.5 per cent of GDP lower by 2065-66, and the stock of public debt 5.2 per cent of GDP lower;
  • if the increased investment in new homes were scored as public expenditure, the proposed policy would initially, of course, lead to an increase in public spending and borrowing, as the up-front investment in new housing would be greater than the welfare savings achieved early in the policy. However, the report (written in 2015) notes that the impact would be very modest (peaking at 0.13% of GDP in 2020-21).
  • opinion in the markets would be very sympathetic to investment in tradeable and income-generating assets which would help address the longstanding economic risks caused by inadequate volumes of housing development, and there are ways the Government could support investment without it scoring in the public spending totals (to which we return below);
  • the estimates of benefits and costs in the core analysis is very cautious, limited to the direct cost of building new homes, welfare savings and increased tax receipts from higher construction activity.  However, there would be significant additional socio-economic benefits in terms of health, wellbeing and education.
  • In a subsequent report, Capital Economics concluded that the analysis remained  robust whatever the outcome of Brexit fiasco.

The evidence also makes the case strongly for a policy of protecting the existing stock of social rented housing and ending the practice of running it down through right to buy, ‘conversions’ to so-called affordable rent, ill-considered estate regeneration and unjustified market sales to generate finance for new build.

Finally, the evidence calls for a range of new policies, including:

  • to resume security of tenure with a clear framework of rights and responsibilities
  • to strengthen consumer regulation
  • to further devolve housing responsibilities, and
  • to greatly strength the voice of tenants in relation to both policy and management.


Blog Post

Affordable Housing Commission issues call for evidence

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.

The Affordable Housing Commission, organised by the Smith Institute, funded by the Nationwide Foundation and chaired by Lord Richard Best, has issued a call for evidence as it gets under way.


The Commission has a wide brief to look at the causes and effects of the affordability crisis and to come up with some workable solutions. The call for evidence identifies four groups that are facing affordability issues which the Commission’s work will focus on. These are

  • ‘Struggling renters’: who spend more than a third of their income on rented accommodation (either private or social renting)
  • ‘Frustrated homeowners’: who would be unable to buy a property without spending over a third of their income on housing costs
  • ‘Those reliant on state support’: who rely on Housing Benefit/the housing component within Universal Credit, but receive inadequate support, taking many below the poverty line.
  • ‘Those who face affordability issues in older age’: those whose incomes drop suddenly in retirement but rents remain the same and older owners in unsatisfactory homes who cannot afford to upgrade or acquire somewhere suitable.

Research over the coming months will seek to understand the affordability challenge and work towards a new affordable housing offer. In summary the questions they want to address include: What does affordability mean in different areas of the country? How does it link to the welfare system? Why has housing become unaffordable and what are its effects? What policies have been put in place and have they been working? How can supply ne increased and what are the roles of the tax system, government funding, housing providers, and the planning system? What other areas of policy need to change – eg infrastructure, institutions, governance, public attitudes?

The call for evidence is accompanied by conclusions from a series of Focus Groups undertaken for the Commission, from which a range of conclusions were drawn, including:

  • There was agreement that there is an affordability crisis, but this was often seen to be about first time buyers not renters.
  • Saving for a deposit is a major barrier, but mortgage payments ae seen as being lower than rent in the longer term.
  • People are open to ‘radical solutions’ but home owners and first time buyers see themselves as struggling therefore have little tolerance for targeting assistance to groups on the lowest incomes apart from people with young children.
  • People identified the main causes of the affordability crisis as house prices increasing ahead of wages, high deposits, punitively high rents charged by landlords. People did not identify lack of new housing as an important factor.
  • 25-33% of household income was seen as ‘affordable’, housing costs should never be more than half.
  • Private renting ‘is broken’ and people will make big trade offs to ‘get onto the ladder’.

The Commission is made up of 15 members from the housing world. In addition to Lord Best, they include: Claire Ainsley of the Joseph Rowntree Foundation, Sinead Butters from Aspire Housing, Ian Fletcher of the British Property Federation, Prof Kenneth Gibb of Glasgow University, Robert Grundy of Savills, Lindsay Judge of the Resolution Foundation, Geeta Nanda of Metropolitan Thames Valley, Martin Newman of Giroscope, Jenny Osbourne of TPAS, John Slaughter of the Home Builders Federation, Dan Wilson Craw from Generation Rent, Kate Henderson from National Housing Federation, Jo Negrini from LB Croydon, Gavin Smart from Chartered Institute of Housing.

The Commission’s website has more information on the research priorities, the focus group findings and the Commissioners. People will have their own views about the conclusions of the focus groups, whether the Commission has the right balance of people and is on the right track, but the call for evidence provides a clear opportunity to make submissions on these and related issues.

Submissions should be made to [email protected] by 4th April, 2019.

Blog Post

A vision based on evidence

shelter commission cover

Shelter’s Housing Commission report published yesterday is undoubtedly a major contribution to the debate about how to solve the housing crisis, and I broadly agree with most of its conclusions.

Attending the launch, I found the most intriguing aspect was the frank admission by one of the commissioners, Baroness Sayeeda Warsi, a former chair of the Conservative Party, that her previously ‘ideological view’ and belief in the small state had been challenged and changed ‘by the evidence’ given to the Commission. For her, and the several other conservative-leaning members of the Commission, to support a huge social house building programme – more than 3 million over 20 years – represents an important shift in thinking on the right of centre.

Also noteworthy was the admission by former Labour Leader, Ed Miliband, that he had not been strong enough in his advocacy of social housing at the 2015 general election.

The report of the Commission is a well-written review of housing issues and how we got to the bad place we are now in. At its core the economic case for investment in social rented homes is made forcefully, based on a detailed analysis by Capital Economics which has been published separately and can be read by following the link.

In essence the case for investment is the same as that made by the SHOUT campaign in 2015 (with analysis also by Capital Economics), which is that the cost of meeting the clear need for a large extra supply of homes for social rent is manageable if you take into account not only the long term costs but also the long term benefits – and especially the savings that will be made in benefits.

Shelter’s Commission recommends and models building 3.1 million social homes over 20 years. You can argue over this number and how it is arrived at, but it is plain that we need to reverse the catastrophic switch that has been made over the last 40 years away from spending on investment in new homes towards helping people to afford or pay for homes at or near market prices.

The gross additional cost of the investment proposed by Shelter, estimated at an average of around £10.7 billion per year, is substantially offset by reductions in the costs of benefits, economic growth, spin off savings in health and other services, and increases in productivity, bringing the estimated net cost down to an average of around £3.8 billion per year. (One year’s worth, as it happens, is less than the money being wasted on preparations for a no deal Brexit). The huge programme would only increase public sector net debt by 2%, a relatively trivial amount given the huge increase in human wellbeing that would flow.

The headline figure of 3.1. million extra social homes has dominated the coverage, but there are many more recommendations about other aspects of social housing. The report proposes a new system of consumer regulation to protect all renters (social and private),  major changes to enable the enforcement of standards, and a transformation in the ability of tenants to make complaints and have them resolved. There are recommendations to improve tenants’ ability to make their voice heard, with tenant panels, independent tenants’ organisations and a revived national tenants’ voice organisation.

In support of the programme of new building, the Commission makes some detailed proposals around planning, including reforms which would make land available at a fairer price and enable planning authorities to obtain a bigger planning gain contribution from private development.

These proposals are broadly very welcome although I couldn’t always follow the logic between the discussion in the report and the final recommendations. There were important areas of debate from which no recommendations flowed at all. It does not undermine the report to set out some doubts and questions.

I am not convinced that the proposed consumer regulator should cover both social and private sectors. They are such different beasts and consumer regulation for social housing seems to me to be inextricably linked to economic and governance performance, which would remain with the existing regulator. The comparison that is made with banking, where financial and consumer regulation are separated, does not hold water, and I think it would be wrong to end up with 4 bodies (HCA/Mayor, economic regulator, consumer regulator, and Ombudsman) tripping over each other to hold housing providers to account. It would be too complicated and it wouldn’t work.

The private sector absolutely needs consumer regulation, but I suspect it would be better done by a specialist organisation and be focused on finding ways of regulating small landlords.

Given that the report sets out a vision for social housing, I don’t think it deals adequately with the question of rent. The economic analysis makes fair assumptions about the level of grant that would be available for new build, which would broadly maintain the current social rent regime, but a vision for the sector should include consideration of the best general level for rents – notably whether they should continue to increase faster than inflation – and whether there might be a better system, for example one that is more closely linked to incomes. There are associated questions about how the benefits system might change.

Similarly, the report discusses the problems but makes no recommendations about the terms and conditions of tenancy and the balance of power between landlord and tenant, which has shifted heavily to the former in recent years. I would like to see the return of security of tenure and the end of fixed term tenancies, and a detailed review of the various grounds for possession. It also fudges the issue of right to buy and does not address the increasing management problems being faced on estates by the rapid rise in high turnover private landlordism enabled by the right to buy.

As with the point about regulation, in some ways the discussion about private renting sits uncomfortably in the report. That is not to diminish its importance, but to observe that it feels too much like an add-on. Many good points are made, and important recommendations are made for example about no fault evictions. But it needs something more fundamental in a report which is concerned with a 20-year vision for housing. If the proposed social housing building plan came to pass, over time there would be a steep decline in demand for private renting. We need to think through what implications that would have in practice. How would private landlords react as their market changed? Would landlords generally seek an exit? Should we revisit the policy of encouraging institutional investors in private renting? If prices fell, what would be the knock on effect to home ownership? A major revival in social rent has broad implications for other tenures which need to be addressed.

The crucial thing about the Shelter Commission report, however, is probably not the specific recommendations. It is whether the work they have done, and the reach they have achieved into Conservative thinking, helps to create a change in the political climate which then leads to a far more balanced housing policy across the board.

Five years ago, the few left standing that defended social rented housing were mocked as living in the past and not facing up to the modern realities of market-driven housing policy. We were especially derided by some luminaries in the housing association movement who, thankfully, are more quiet these days. Social rent is back at the centre of the housing debate, in the mainstream where it belongs. The groundswell in favour of it is vitally important but the next stage is the vital one – because winning the political argument has not yet led to many homes being built.