Author: Steve Hilditch

Those who have been quickest into print or on to the airwaves after the awful defeat on 7 May are not to be trusted. For them there is no period of reflection, no attempt to consider their own fixed views in the new context. Their ready solutions could have been written at any time in the last few years; they have said what they always say and have nothing new to offer. Their purpose is either personal advantage, because they are likely to be candidates, or to rubbish Ed Miliband and in particular his decision to move on from New Labour.
I defy anyone at this stage to have a genuinely rounded analysis, especially those who have already boiled it all down to simple solutions. Stella Creasy’s Guardian piece on Saturday argued that we have to deal with the grief first and go through the grieving stages, and I’m probably somewhere between denial and anger, moving into depression. Half of me wants to sound battle cries and the other half wants to give up and quietly slip away. Half of me sees the mayoral contest in London as the next great challenge, half of me thinks it’s not worth the candle because a Tory Government will be ruthless in controlling a Labour mayor.
Some people who were obviously not tired enough after Thursday have had a lot to say about reaching out to middle England, being ‘business-friendly’ and speaking to ‘aspirational’ people. But, when pressed, where are their policies different from what Ed Miliband has been saying these past few years? Labour was spun as anti-business because it wanted to tax the rich a bit more and because it attacked the big corporates, not because it had weak pro-business policies. Should we have dropped the tax proposals or the energy price freeze to reduce the damage? Of course not. Nor did Labour focus on the poorest 10% as is alleged, for example by Alan Milburn today, and it did not ignore middle England. In housing, the emphasis was entirely on first-time buyers and people who have good incomes but are still forced to rent. Apart from Bedroom Tax, hardly a word was said about social housing in the whole campaign.
Quite a few mistakes were made after 2010. We did not defend the record of Gordon Brown in saving the global financial system, which he did, because we were embarrassed by him. We didn’t build on public anger about bankers by setting in concrete the link between the global banking crisis and the recession. We allowed the Tories to blame Labour’s spending for the crisis despite the fact that the Tories supported Labour’s spending plans up to the banking collapse. We were never comfortable with austerity nor brave enough to oppose it, and it showed.
So of course there are lessons to learn but I do not accept the view that our policy offer and post-New Labour positioning was all wrong. We were blamed for the recession and could not restore our reputation for economic competence, but we still made net gains in England. The result in London was patchy but it became even more of a Labour city. We were punished in Scotland and the Tories fed and exploited unpleasant anti-Scotland feeling in England which helped them win but could break up the Union. Labour was squeezed between two nasty nationalisms.
But it is vital to remember that 2015 was nothing like 1997. Then the big crisis, falling out of the Exchange Rate Mechanism, happened on the Tories’ watch. This time it happened on Labour’s. Then Scotland remained safely Labour, this time the referendum and rampant nationalism happened.
More than anything I feel that the defeat was the revenge of Murdoch and the other newspaper-owning billionaires. Can Labour ever win in the face of their dominance and hostility? Perhaps Ed Miliband’s greatest mistake was to take on Murdoch and to show integrity over phone-hacking and Leveson. He did not play the game according to their rules and he did not travel around the world to dance to Murdoch’s tune as Blair once did. Should Miliband have been more accommodating on policy to keep them onside? Was that possible? Could we have won the Election that way?
I do not accept that the papers have diminished influence these days: they set the tone, and the lazy broadcast media simply follow their lead. Their front pages are blazoned across every TV public affairs programme and their journalists populate programmes like Question Time. Miliband eating a bacon sandwich was repeated thousands of times – on the BBC as much as in the Sun – and was one small part of a deliberate strategy to undermine and ridicule him. The fact that he nearly rose above it is a remarkable tribute to him and I resent the fact that some people have now turned against him. Cameron’s gaffes were mentioned but washed over. Miliband would not have survived leaving his child behind in the pub or being a Bullingdon boy or forgetting which football team he supported. Will any new Labour leader suffer in the same way?
It will be the same again next time, newspapers will still be owned by the same people and have the same bias, and the broadcast media will be no better – indeed the BBC will be much worse. One other lesson this time is that, in politics rather than celebrity, social media is not yet as powerful as everyone involved with it pretends it to be.
The depressing reality is that negative campaigning and propagandising worked. No amount of navel-gazing and blame-gaming will change that. The Tories are much better at it than us. Without hiring a Lynton Crosby, can Labour retain its integrity whilst being stronger in attack and much better at rebuttal? Are there ways of working round media bias without giving in to it?
So was Miliband ‘too left wing’? It is the media message and some people’s mantra. I can’t see it myself. He wanted to regulate markets a bit more, spend a bit more public money, and tax the rich a bit more, but it was all incremental and at the margins. The Tories managed to align in the public mind the interests of the rich with the interests of business. In fact they are very different, and the behaviour of the rich over the past 20 years is the antithesis of a successful long term economic plan. They also managed to make welfare cuts popular – Labour must remember that you cannot overcome huge prejudice and the stigmatization of ‘scroungers’, built up over many years and fanned even by some in the Labour party, in a single Election campaign.
So, like everyone else, I have some views on why Labour lost but they are not necessarily well-formed. We need to debate the pros and cons so we can be better next time. But a false analysis based on pre-determined views that Labour was ‘too left wing’ or ‘not left wing enough’ will get us nowhere.

In an important interview Ed Miliband yesterday spelled out the contents of Labour’s first Queen’s Speech. Speaking to the Guardian he tried to refocus the Election back on to policy and away from the appalling England v Scotland tactics we have seen from the Tories recently.
He described the central battle of the Election to be ‘a clash of values’. How right he is. On this blog over the last five years we have commented constantly on the policies of the Coalition Government. We have stressed that many of the core Tory housing policies were contained not in their Manifesto but in a pamphlet written for the Localis Think Tank before the Election, which set out their approach to the marketisation of social housing. We have monitored their policies from the first Budget cut of over 60% in the affordable housing budget, through the introduction of endless and self-defeating demand subsidies for home ownership, through the stream of policies designed to end social rented housing, through their ripping up of the homelessness safety net, through their indolence over private renting, to their unbelievable decision to give subsidies of more than £100,000 to make the right to buy work for housing association tenants – to be funded by selling off every valuable council house that becomes available for letting in places like Westminster.
And the Lib Dems? Despite their well-written and comprehensive housing Manifesto – much of it repeated again this time – Lib Dem Ministers in DCLG have been poor and uninfluential and have gone along with every single rabid policy put forward by Grant Shapps, Michael Green, and their successors. They have been absolutely hopeless and have offered no mitigation whatsoever.
Miliband’s proposed Queen’s Speech identified 10 Bills that would be introduced in the next session that will be the policy of the Government in less than one month’s time.
To focus on the issues that will have an impact on housing: The Bills will include a finance bill that would introduce the mansion tax; a freeze on energy prices until 2017 with powers to reduce charges; bills to tackle low pay by banning zero-hours contracts, make it illegal to use agency workers and immigrant labour to undercut wages; an NHS time to care bill that will end the market framework and begin the integration of the health and social care services; a bill to close tax loopholes, including those around stamp duty.
And finally, there would be what is described as a ‘More Homes and Fair Rents Bill’, which is:

A bill that would give councils new “use it or lose it” powers to stop developers sitting on land; create local development corporations to build homes at scale where the private sector has failed to; and allow the development of garden cities and suburbs, creating more than half a million new homes. It would also ban extortionate letting agents’ fees and make caps on three-year tenancies at inflation rates the rule, not the exception.

On top of that, in the one policy that alone justifies a Labour vote, Ed Miliband has not only pledged to end the Tory and LibDem Bedroom Tax which he described as ‘indefensible’ and ‘cruel’, he has promised to act immediately:

‘We’ll get to work immediately to ensure that families no longer lose out. So on day one of a Labour government, we free families from the burden of the bedroom tax.’

Of course I concur with many colleagues in the Labour Party who would like to see an even stronger housing policy. In particular, I would like to see a much more explicit commitment to social rented housing and to the increased affordable housing programme that is essential to providing a large slice of the promised 200,000 new homes a year in the form of genuinely affordable homes. We will have to wait and see what the Eds’ promise that housing will have ‘highest priority’ in Government capital spending amounts to in pounds shillings and pence.
However I am reassured by the fact that Ed Miliband went big on housing for 2-3 days last week, making housing his ‘Sixth Pledge’, suggesting it is a genuine priority for him, and by the less well-reported comments of Emma Reynolds on the need to link rents to earnings rather than market rates – in my view the foundation of a progressive policy that could deliver a new generation of genuinely affordable homes and begin the long march back ‘from benefits to bricks’.
And I thought the Miliband responses to Inside Housing‘s questions were also encouraging, including his comments on reviewing one for one replacement of right to buy homes, his understanding of the reversal of progres on homelessness, and his statement that:

Labour is committed to building more affordable homes in the next Parliament, including homes for social rent, and that’s why capital investment for housing will be a top priority.

‘Red Brick comes out for Labour’ is not a headline that is going to cause ripples in the Election campaign. ‘The Guardian comes out for Labour’ is slightly more important, and a welcome reversal of the appalling decision they made to back the LibDems in 2010. The poor misguided souls have seen some light, and I will be able to start buying the rag again.
If it wasn’t for the extraordinary happenings in Scotland, too complex to go into here and now, the whole debate at this moment would be around the size of Ed Miliband’s majority. There would be no talk of being neck and neck. On some polls Labour is ahead in England and Wales, not something that the Tory backwoodsmen shouting about ‘English votes for English laws’ will understand. Apart from Scotland, Labour’s comeback is a much bigger achievement than the Party is given credit for. In my patch, London, Labour’s lead is stunning.
Miliband’s success has involved swimming against the tide. Almost universal media hostility (including for a long time from the Guardian) makes it so hard to get any reasonable point across. Housing policy is reduced to the glow of housing wealth, first time buyers and housing benefit scroungers. Journalism in the broadcast media is shockingly poor so they re-run whatever is in the right wing press, and even devote whole programmes to showing us what is in the papers – 75% owned by a few right wing billionaires.
So will Friday morning bring that awful feeling that we experienced in 1992, when people switched to the Tories in the last week, or can Miliband hold and even improve on his position? If he wins, in my view the feeling will be even better than 1997.
 

Attending Hustings meetings in and around the area where I live – central and inner west London – is a depressing business. The fact that the meetings I have attended are in marginal seats tells me that the population there is more mixed than is commonly supposed. The statistics show that there is a lot of deprivation in the area, children living in poverty, and poor standard housing. There are lots of these meetings but they seem to be dominated by a certain type of punter. Mansion Tax is raised a lot; Bedroom Tax doesn’t get a mention. I doubt if this is true anywhere else in the country.
Savills estimate there are 76,000 properties in London liable for Mansion Tax and all their owners seem to have been to a Hustings in the last few weeks. Two of the meetings I have attended have been organised by faith groups. In one case Mansion Tax was raised by the priest, in the other it was the first pre-arranged question asked. In both cases some people got really hot under the collar about it. Poverty and homelessness didn’t get a look in.
People who are really quite well off by any definition see themselves as victims, and they see Mansion Tax as the last straw. They see themselves as being punished for working hard and buying a property in the area on a big mortgage when houses were just very expensive not mega-inflated like now. They have mixed feelings about what is happening to their community: their properties are valuable because they have been virtuous but they resent the fact that their areas are now falling prey to ‘bankers and foreigners’. Gentrification should only go so far: barristers good, bankers bad, foreigners worst of all. They have no  concept that their riches are a windfall gain, an unearned bonanza, visited on them by stupid housing policies over a generation. They feel they deserve it but they seem to have no awareness that it is much worse for many others.
Some of them are undoubtedly ‘asset rich but income poor’. Partly as a result of Tory propaganda they believe they are going to be taxed out of their family home and out of the area, and are not mollified by the policy allowing deferment for those not earning enough to pay the higher rate of tax: it seems £42,000 is not that much.
It is undoubtedly the case that people are being pushed out of most areas close to the centre of London. It is a process that has been going on for 40 years but it has greatly accelerated in the last few years, especially in the era of London as ‘The Global City’. London property is now one of the favourite places to put your millions for hundreds of  thousands of rich people, especially Chinese, looking for a safe haven and a potential home to emigrate to if the going gets tough at home.
The fact that the feeling of victimhood stretches to people who are merely rich living in £3m houses is an extraordinary realisation. What hope does it offer for people on low and moderate incomes who have never been able to afford to buy anything at all?
An excellent article on the CityMetric website by the Chartered Institute of Housing’s John Perry describes the ways in which people on low incomes are being banished from central London. He identifies five:

1. Welfare reform means people on low incomes can’t afford to rent: since the caps were imposed, people in receipt of Local Housing Allowance has plummeted, by as much as 30-35% in Westminster and Kensington and Chelsea. Young people fare worst.
2. Homeless families get a tougher deal in London: homelessness continues to rise rapidly in London, increasingly because people have had their private tenancy ended – 38% of the total. Use of temporary accommodation is rising rapidly and is likely to be offered outside London.
3. Council housing is being sold off: twice as many homes were sold by London boroughs in 2013-14 as the year before. One-third of right to buy properties are now rented out privately.
4. Social lettings are going down: the consequence of losing stock is falling lettings, down to a mere 21,400 by councils and housing associations in 2013-14. Waiting list restrictions are also now commonplace.
5. Social homes are more expensive: housing associations have gone for so-called ‘Affordable Rents’ big time, rents are on average £60 a week more than social rents.

These are the pressures that are leading to an almost un-reported clear-out of people on low incomes from central London. Areas that have been genuinely mixed communities for generations are being changed rapidly. And when people living in £2-3m houses feel that change is happening too fast and are fearful (justified or not) that they might be pushed out as well because of the new Tax, you really do have to wonder what kind of city we are creating.

Ed Miliband exploded housing onto the Election agenda today with his speech about Labour’s proposals for the private rented sector.(previously discusssed on Red Brick for example here and here).
It provoked some ridiculous responses, some stupid responses, and some downright hypocrisy.
Eric Pickles, after 5 years of doing sweet F A for private tenants, chose to quote the right wing Swedish economist Assar Lindbeck, almost but not quite correctly, claiming that he said ‘Next to bombing, rent control is the most effective way to destroy a city’. I think Eric should reflect a little more on his huge cuts in local government finance and the destruction of local services before he says that.
When the policy was first announced, Labour was attacked by Grant Shapps for ‘Venezuelan style rent controls’. The Tories still cannot decide whether to denounce the scheme as an appalling left wing attack on the nature of capitalism or to brand it as ‘a gimmick’, to quote Boris Johnson today. The reds under the beds theme has been carried on by the Resident Landlords Association who called it ‘a 1970s left wing policy’.
But the accolade for rank hypocrisy goes to Nick Clegg, rumoured to have once been Deputy Prime Minster. The gruesome Clegg really went to town, starting by saying the policy was ‘superficially attractive’ before concluding that ‘more and more landlords will simply quit altogether’.
That struck me as strange because I have a habit of reading party manifestoes, and the Lib Dems have traditionally been in favour of both greater security of tenure and restricting rent rises. Their 2015 Manifesto contains some interesting statements, talking for example of ‘new ‘family friendly tenancies, which limit annual rent increases’. In a section called Protecting private tenants and leaseholders, amongst other things they say:

More and more people – including families – are renting in the private sector for the long term. We believe private renting is an important part of the housing market, but the balance has shifted too far against the tenant, and more needs to be done to help people making a home in rented property.
We will:

• Improve protections against rogue landlords and encourage a new multi-year tenancy with an agreed inflation-linked annual rent increase built in.
• Enable Local Authorities to operate licensing schemes for rental properties in areas where they believe it is needed.
• Establish a voluntary register of rented property where either the landlord or the tenant can register the property, to improve enforcement and tax transparency.
• Ban letting agent fees to tenants if the transparency requirements we introduced are not successful in bringing fees down to an affordable level by the end of 2016.
• Extend the use of Rent Repayment Orders to allow tenants to have their rent refunded when a property is found to contain serious risks to health, and withhold rent from landlords who have not carried out court-ordered improvements within a reasonable period of time.

Now the space between this policy on private tenancies and rents and Labour’s is negligible, but even so the great Leader chose to attack Labour rather than show a measure of agreement. He could have tried to win the policy argument but instead chose to have a dig at Miliband. Once again he put himself on the Tory side of the rhetorical argument even when his party policy is a reasonable one. Believing one thing and saying another to make a political point is the sort of hypocricy that Clegg says he hates.
Today certainly has been a field day for the nation’s amateur economists, or political journalists as they are sometimes known. Andrew (‘Andy’ to his pal Boris Johnson) Marr warmed to the theme, twice telling Ed Miliband that all reputable economists say that rent controls lead to reduced investment and supply. I don’t think he’s done enough research.
The Tories have been quoted all day saying that it is always wrong to interfere in markets, but they can be dismissed for spouting nonsense as they have already supported huge interventions in housing markets (eg with the Help to Buy). One clever chap talked about rent control leading to sub-optimal outcomes.
This ‘free market’ critique beggars at least 3 questions.

• First, Labour is not proposing ‘classic’ rent controls but a mechanism for making rents predictable during a tenancy, along the lines of the German model, which is regarded as having successfully regulated private renting there for many years, even by economists. The rent policy is part of a raft of proposed changes, including standard 3 year tenancies and a clamp down on fees charged by lettings agents.
• Second, the UK rental market, especially in London, simply cannot be viewed through a simplistic Boris Johnson-style classic economic supply and demand model – a kind of flawless world of enterprise and perfect knowledge that predicts that price controls will lead to reduced supply. In the real world, landlords have been in direct competition with potential home owners to buy existing properties in a highly complex and rapidly changing market, but one in which landlords have possessed significant advantages. Very little of the demand for buy to let has led to new supply because most buy to letters have bought existing property.
• Third, private renting is just not a ‘free’ market to start with, it is surrounded and underpinned by any amount of rules, especially around mortgages, and it receives remarkably favourable tax treatment. The ‘market’ is also distorted by the existence of housing benefit. Government having a say on rents is just another brick in the wall of sensible regulation. As the private rented market is already staggeringly sub-optimal, it is almost quaint for these people to have such faith in the ‘free’ market: regulated markets do much better.

In a day of knocking copy, I also wonder if Generation Rent were pleased or distressed to see the Telegraph headline: Labour’s rent controls could see families evicted, left-wing campaign group warns’. I find it hard to believe that private tenants think that Labour’s proposals will ‘make no difference’ as Generation Rent claimed.

I attended a Hustings event in a Catholic church in North West London. For me, the most remarkable point of a quite entertaining evening was when the priest rose to ask a question. What would it be? Poverty? Food banks? Bedroom tax? Help for the starving of the world? No, he asked about Mansion Tax and the problems his parishioners would have paying it. Perhaps I will send him a few Cafod leaflets, or perhaps Trussell Trust?
This little tale illustrates the point that the Mansion Tax has some traction in parts of London, despite being generally popular. Not enough to change the political direction, but it has become an issue that lots of people talk about. Despite Labour’s best efforts, there has been quite an effective disinformation campaign by the Conservatives. Several candidates have sent out thousands of letters designed to look like an official demand for the tax from the local council – ‘Mansion Tax Revaluation Information’ – implying that people would have to pay up to £20,000. In some constituencies the Tory candidates appear to talk about nothing else.
Of course the Tories, and therefore most of the media, never mention Labour’s two most important caveats on the policy:

• First, that the £2 million starting threshold will rise linked to increases in prime property values, not any other index, so that the number of homes caught by the tax should not increase. Because people are not aware of this, the most worried people are those who will not pay it but fear that they might have to.
• Secondly, that there is a powerful deferral mechanism so that anyone earning £42,000 or less will not have to pay the tax out of income, it can become a charge on the property when it is sold. This addresses the ‘asset rich income poor’ problem but it has not entered the consciousness: so many people simply say that they cannot afford to pay £250 a month and will have to move.

A common theme amongst complainants goes like this: ‘We bought our house with a big mortgage thirty years ago and we have carried out big improvements. It’s not our fault that property prices have risen so much and the house is now worth so much. It is our family home and it is unfair for us to be forced to move.’ Apart from illustrating that they are not aware of the deferral policy, there is a touching belief that the rise in value is down to their own efforts and not an unearned windfall from being in the right place at the right time through the property bubble – the point that justifies this tax.
Conservatives are being disingenuous in another way as well. The fact is that many of them believe in raising more tax on high value property, just not Labour’s Mansion Tax. Paul Dimoldenberg has traced many of their policy pronouncements on this issue.
Just one example illustrates the point. Conservative MP for Westminster South until Parliament was prorogued, Mark Field, is in favour of re-banding council tax and adding new bands to the top (similar in principle to the Mansion Tax). He says:

“..the (current Council) tax is not even particularly proportionate to property values, with the same amount levied on all homes valued at over £320,000 in 1991 prices. This means that around half of all houses in the capital are now placed in the same council tax band even if their size, location and value are vastly different. A Knightsbridge oligarch, for instance, is paying £1353.48 annual council tax for a £60 million home – exactly the same as properties worth one-thirtieth that sum.
Let us take Westminster as our example here. In this Central London borough, a Band H property would now likely be worth over £2 million and there are now just under 15,000 of such homes. But there is a vast difference between a £2 million flat in Pimlico and a home valued at £60 million at One Hyde Park. So the local authority might be empowered to impose two additional bands – there could be, for instance, Band H for prime properties worth between £2 and £5 million; Band I for so-called ‘intermediate prime’ properties in the £5 to £15 million bracket; and finally Band J for super prime properties worth over £15 million”.

Now Conservatives are not going from door to door saying ‘oppose Labour’s Mansion Tax, support the Tory super council tax’. Perhaps Labour should tell people on their behalf.
Stunningly high property values in the central/west/north-west London constituencies have a big impact in relation to another Tory policy: the right to buy. Under their current proposals, the cost of discounts (up to £103,000 in London) for housing association tenants exercising the right to buy will be met by forcing councils to sell their most valuable or expensive council housing.
The detail of the policy reveals their definition of ‘expensive’: over £340K for a one bed flat, £400K for a 2 bed, and so on. In Westminster, the cheapest 1, 2, and 3 bed flats are above the threshold. This means that it is likely that every flat becoming available for letting in Westminster will have to be sold. Paul Dimoldenberg reveals that Westminster Council estimates that 410 council flats will become empty and available for letting in 2015-16. All of these flats will have to be sold off and, in the current market, are likely to go to property speculators, foreign buyers and buy-to-let landlords. As Paul says:

The stark implications of this policy is that no local families will ever be rehoused in Westminster again as the Council will be forced to sell off all its flats which come vacant. Only the rich will ever be able to live in Westminster. This will be a hammer blow to local communities all over Westminster.

The impact in neighbouring boroughs like Camden and Hammersmith will be less dire but still very dramatic. In these constituencies it is to be hoped that the Tories’ sell off plans will replace the Mansion Tax as the main topic of conversation. Even for priests.

The Tory Manifesto was plainly written by Poundland, using the old Tesco mantra ‘pile it high and sell it cheap’.
The Tories have nothing to say to tenants – literally. Their housing policy for one tenure only – home ownership – tells us what has been wrong with housing policy for 40 years. You cannot have a housing policy that ignores that huge section of the population who are not and never will be home owners.
It is also the case that you cannot have an effective housing policy that fails to look at the inter-relationships between tenures. Despite all the talk in their Manifesto about believing passionately in home ownership, the Tories have no analysis whatsoever to explain why home ownership has been falling – for more than a decade and throughout their time in Government. If home ownership is their sole objective, they have spent a fortune – and failed.
In reality the Tories have divided loyalties, they are conflicted between competing views of capitalism. They like the image of the proud homeowner, and indeed that is what most of us who commentate on housing are ourselves. But on the quiet they are also the party of the private landlord – big time – and especially the buy-to-let landlord. They won’t admit that if it wasn’t for the buy-to-let market housebuilding would have been even more pathetic than it has been over the past five years. They won’t admit that the only way of seriously promoting first time ownership would be to restrain buy-to-letters (and probably foreign purchasers as well) who are competing for the same properties and bidding up prices due to their tax advantages. And they won’t admit that their stated aim: ‘Everyone who works hard should be able to own a home of their own’ is simply and flatly unachievable.
The way the housing market works, made far worse by Tory (and LibDem, let us not forget) demand subsidies, means that the closer aspiring home owners get to their target the further it moves away. The waste of billions on subsidies, loans and guarantees to help home owners is pointless and economically illiterate. First law of economics: if supply is unchanged, and demand rises, prices go up.
So they turn to their other obsession: putting the public sector’s assets up for grabs in Poundland. Or worse, this time they’re putting somebody else’s assets up for sale in Poundland. Now that really is innovative.
Others have written and will write about the damage done by RTB1 and the threat to housing supply from RTB2 – both in terms of re-lets lost and new supply undermined. But the biggest disgrace lies in the method by which this will be funded.
Their policy of extending the Right to Buy “to tenants in (surely ‘of’ – Ed?) Housing Associations to enable more people to buy a home of their own” will be funded by requiring COUNCILS to sell off their most valuable council houses as they become vacant.
Even if there was some logic to selling the most valuable homes, which there isn’t, Councils have a thousand higher priorities than using the money to pay £77,000 – £103,000 in subsidy to a housing association to fund the discount they will be forced to give to one of their tenants and then spend even more on building replacements. This will cost BILLIONS.
There are many unanswered questions. Here are some for starters.

• The most valuable Council properties are concentrated in Inner London. Will those councils have to sell almost everything when it becomes vacant? How will they ever meet their own huge housing needs?
• Half of all councils have no housing stock at all. What will happen in those areas? Or will this involve one council subsidising home ownership in another council’s area?
• The housing impact of RTB1 was felt over many years through a reduced rate of letting – and a reduced flow of rent income. People who could have been in council homes instead had to live in temporary accommodation for years or in private housing. Both are hugely expensive indirect costs. Have the Tories even considered this?

After reading this evil stuff, do I have the strength to read yesterday’s Green Manifesto? Maybe, but regrettably it will be as relevant to what happens after the Election as this blog, which isn’t saying a lot. And later today we can read the LIbDems (who delivered not a single one of their own housing policies in five years of Government) and UKIP. The last one may prove to be the most extraordinary.
 
*My apologies to Poundland, a very fine institution, who may not want to be associated with cheap Tories.

No housing surprises were expected in the Labour Party Manifesto, launched this morning by Ed Miliband. And no surprises was what we got.
All of the housing policies have been previously announced and widely trailed. There is a strong reliance on the conclusions of the Lyons Report on housebuilding, which set out a comprehensive and detailed agenda for achieving the Party’s target of 200,000 homes a year by 2020. And there is a strong commitment to reform in the private rented sector, with 3 year tenancies as standard, the capping of rent increases during a tenancy, landlord registration, and strict controls over letting agents.
It is only the fact that these key policies have become so familiar that prevents them from being seen as political big ticket items. Everyone knows that 200,000 new homes each year (as a start), getting close to a doubling of current output, is a stretching target. Just saying ‘make it 300K’ doesn’t improve the policy, it just makes the likely disappointment all the greater.
Some will describe the private rented sector package as not being sufficiently radical because it is not ‘real rent control’, but it is close to the German system which has been a relative success over many years, and is a bigger reform than it is given credit for. It could be that the strict regulation of agents will make most difference – benefiting both tenants and landlords. But it is quite wrong of ‘Generation Rent’ and others to say there is no difference between the Parties on private renting. The Tories stand for further deregulation and believe that an even freer market is needed to encourage more landlords to invest.
In this age when symbolic policies are so important, one short stark message is of vital importance in this Manifesto:

Half a million families have been hit by the Bedroom Tax, and two thirds of those affected are disabled, or have a disabled family member.
It is cruel, and we will abolish it.

Labour’s Manifesto also includes a specific commitment to reversing the upward trend of homelessness which is very welcome.
So is it what I want to see? Of course not, but then again that has been true of every Manifesto I’ve ever read. It is not explicit on capital funding for housing – the central determinant in getting a large proportion of the 200K new build as genuinely affordable homes. There is a generalised commitment to giving housing top priority in Government capital spending, but a lot more water will flow under the bridge before we know what that means. My aim would be an early return to 2010 housing grant levels, which would mean it is in the same ball park as the cost of the ‘Help to Buy ISA’ so casually announced by Osborne in the budget. Going back to a £2 billion plus housing budget is not a big deal in Government spending terms, but would transform our housing prospects. Despite all the emphasis on first time buyers, it is the performance and output of the social housing sector that will determine whether 200K is achieved or not. And to deliver its mission of providing decent homes at genuinely affordable rents, the social housing sector needs more grant.
One specific disappointment is that the large amount of behind-the-scenes work that Labour did on a ‘benefits to bricks’ policy – subsidising housing construction not housing rents through housing benefits – has not come to full fruition in the Manifesto. There are nods in this direction – a proportion of housing benefit savings due to councils negotiating private rents down will be kept locally for re-investment – and the underlying principle is asserted that ‘Government spends far too much money dealing with the symptoms of problems, instead of investing smaller amounts in dealing with their causes.’
Shadow Chief Secretary to the Treasury Chris Leslie’s famous ‘zero based budget reviews’ seem to have passed over housing too quickly. It is not just ‘benefits to bricks’ – the Tories have committed vast sums to subsiding housing demand, which can only in the long term lead to house price increases. Diverting some of these additional demand subsidies into social housing grant would give us a programme to be proud of.
It will surprise no-one if I say that a Labour Government is essential to set a new direction of travel in housing. The last five years of Tory dogma and LibDem complicity have been unambiguously bad for housing. There have been no silver linings. A Labour victory will not mean the problems are solved, but it will mean that housing campaigns will have more focus and they will be aimed at people who will listen and at least half understand what is being said.

The Fabians have published a timely and strong new report written by John Healey and John Perry making ‘the overwhelming case for new public housing’.
It is timely because it appears as the Election enters the short campaign and the outcome is so uncertain. Housing has featured in the Election but in a familiar guise, as if the – undoubtedly important – issue of access to home ownership was the only thing that matters. I suppose we should be pleased to have had a minor reprise of the 1950s and 1960s Election campaigns when the parties traded housebuilding promises.

John Healey
Healey and Perry summarise the housing crisis and challenge the Parties: “It is a measure of a nation’s politicians whether they can rise to the big challenges their country faces. Housing is now such a test.”

John Perry
At its core, the crisis is a simple calculation: we need to build 250,000 homes a year yet  2012-13 saw just 108,000 new homes completed, the lowest since the 1920s, rallying to a not much better 119,000 in 2013-14. Rather less than half what is needed. Healey and Perry emphasise that a bigger contribution is required from everybody – commercial housebuilders, housing associations and councils – but that “Above all, strong leadership and smart action from government is imperative.” And that new public housing must be central to a new national political mission.
The desire for action is expressed across most of the political spectrum. They quote the call of ‘The Good Right’ for “a Harold Macmillan-sized, state supported housebuilding programme”. The Good Right are too canny to be too directly critical of the Government, but they come very close.
Healey and Perry make the case for more social housing in 5 simple points:

• First, the private market cannot build 250,000 new homes, and never has.The public sector must step up to fill the gap.
• Second, genuinely affordable social housing (and not the Government’s aberration of ‘Affordable Rent’) is needed to make the new homes affordable for the millions of households on low incomes who cannot access any form of housing today.
• Third, building social housing is the best way to get value for money from public spending: over 30 years the public purse makes a profit because of lower housing benefit payments, and public spending is a lever for major private investment as well.
• Fourth, it will help make work pay: housing costs are a critical disincentive to earning more.
• And fifth, public investment would be an important boost to the economy.

“Recent modelling by John Healey shows that working up to building 100,000 new social rented homes a year by the end of the next parliament would not only pay for itself in less than 30 years but provide a net benefit to the public purse of £12bn through lower housing benefit cost.”

The report identifies the three biggest challenges to a major new programme as cost, public support and delivery.
On cost, they point out a number of ways that more social homes could be built without cost to the public purse: a revival of the principle of ‘planning gain’ from private development, the need to ‘borrow to invest’ (creating a long term asset and yielding a financial return).
On public support, they point to rising majorities in polls supporting more social housing, and the improved policies that many councils are implementing to engender public support. They point to the importance of challenging the ‘maginalisation’ of social housing and creating mixed communities.
On delivery, they acknowledge the scale of the challenge and the vital importance of a new target for new social homes, the need for Government funding and land, and the requirement for a new sense of social obligation from developers.
To my mind the case is well made in this report and is irrefutable. The Government’s policies to date – which, at a tangent, have always been totally contrary to the stated policies of the acquiescent Liberal Democrats – have become increasingly focussed on demand-side initiatives when the clear need, as was obvious from the analysis in the Lyons report, is for extensive action on the supply side.
We are close to the launch of the Parties’ Manifestoes. We will look at them here on Red Brick with as much objectivity as we can muster (which isn’t always a lot). It may be too much to hope for that, if any of the Parties emphasise social housing, the media will cover the issues.
Potential first time buyers are important prospective voters for parties to try to impress, but so are those who will never be able to buy and whose housing needs will only ever be met by good quality genuinely affordable social housing. They all have one vote each.

Each year 24 Housing invites more than 400 leading figures in the housing world to nominate five people who they think have had the biggest impact on housing during the last year. This year’s ‘Power Player‘ survey is published today.
The Power Player list has a selective constituency and isn’t scientific but it is a bit of fun, gets tongues wagging, and most people seem quite pleased to be on it rather than off it.
The SHOUT out headline from this year’s poll is the remarkable impact that the ‘Social Housing Under Threat’ campaign has had in less than a year of making a fuss about the importance of social rented housing. Eight members of the SHOUT steering group make it into the top 50 – although they all have other strings to their bow, like Tom Murtha who also chairs HACT and is 16th.
Other campaigners also do well, including Alex Hilton of Generation Rent, which has continued to make a lot of noise on behalf of private tenants, and Adrian Capon, the instigator of #housingday .
It almost seems unnecessary to mention that David Orr of the National Housing Federation has achieved a hat trick of top places. The successful ‘Homes for Britain’ campaign and rally and the general high profile of NHF mean it has been a good year for him, despite an undercurrent of criticism from SHOUT and elsewhere that NHF has stopped talking about the sector’s core product, social rented housing, and is seguing into the role of representing large non-profit housebuilders.
As the Election campaign is just underway, it is intriguing to see how the politicians have done. Labour’s Emma Reynolds leaps up from 15th to become the top politician, stealing ahead of George Osborne into 5th place, a good result given how hard it is to have an impact from opposition. Osborne slips 4 places to 6th, but he is clearly the person who decides housing policy in the Government, having just committed more than twice the annual affordable housing budget in one go on his new Help to Buy ISA. There is some money left, just not for affordable housing.
You would expect the current Housing Minister to make the list, and he does. Anybody remember his name? Yes it’s Brandon Lewis and he comes in at an insulting 49th. Not very good given that Grant Shapps was once top of the pile (or was it Michael Green?), and even the already-forgotten Kris Hopkins (13th last year) and Mark Prisk (5th in 2013) did rather better than that. Let’s hope Emma Reynolds and Brandon Lewis have the same relative power after May 7th.
Amongst the politicians, housing’s pantomime villain Iain Duncan Smith is in at 15th, recognition of the impact that the welfare reforms are having, and it is interesting to note that Lesley Griffiths, the Welsh Minister for communities and tackling poverty makes it in at 23rd and a former Housing Minister, John Healey, who has written a lot about housing recently and help instigate SHOUT, is in at 26th. Labour’s housing commission chair Sir Michael Lyons is 27th.
One slight improvement is that more women are recognised this year, up from 12 to 15. But intriguingly, women take half the places in the top dozen, with ex-DCLG and new CIH chief executive Terrie Alafat coming 4th followed by Emma Reynolds, Carol Matthews of Riverside, outgoing CIH chief Grainia Long, Alison Inman who is involved with CIH, TPAS and SHOUT, and Geeta Nanda, CEO of Thames Valley HA.
A rather large number of housing association chief executives feature, but there seems an underlying swing from the very large associations (who are still well represented, for example by David Montague of L&Q and Brendan Sarsfield of Family Mosaic) to the medium-sized associations who have been making more noise about the future direction of the sector. Tony Stacey of South Yorkshire HA, who leads the Placeshapers group of associations, is 2nd and Nick Atkin of Halton is 3rd. But some big players who have previously featured, like David Cowans of Places for people and Kate Davies of Notting Hill, have slipped out. The regulators also appear: Julian Ashby and Matthew Bailes of the HCA at 13th and 20th respectively.
Only 20 years ago many of the most important figures in housing were council housing directors. As far as I can see, none make this year’s list although the council sector is represented by its ALMOs: NFA chair Sue Roberts of Wolverhampton Homes, Eamon McGoldrick of NFA and Helen McHale of Stockport Homes.
And a final word about bloggers. Colin Wiles leapfrogs Jules Birch and myself into 18th after a productive year writing for a variety of journals but also as co-ordinator of SHOUT.
 
 

Last week on Red Brick we discussed a series of essays edited by Lord Andrew Adonis for the Institute of Public Policy Research (IPPR) proposing the transformation through redevelopment of existing council estates into ‘City Villages’.
Duncan Bowie has written the following analysis and detailed critique of the report. Duncan writes in a personal capacity but is convenor of the Highbury Group on Housing Delivery – an independent group of specialists from public, private and independent sectors from housing, planning and related professions which prepares proposals for Government – as well as being a member of the EC of London Labour Housing Group. He has worked in London housing and planning for many years, including for Ken Livingstone when he was Mayor.

The wrong solution to London’s housing crisis

By Duncan Bowie

Andrew Adonis’s introductory chapter seeks to describe the housing crisis in London and propose that the shortage can be met through redeveloping London’s council estates at higher densities. It seeks to bring together the proposals out forward by the various contributors to the anthology.
There are a number of fundamental errors in the basic assumptions in the report. The first paragraphs appear to confuse the data on London’s housing requirements with the London Plan’s capacity target. The Mayor’s 2014 Strategic Housing Market Assessment gives an annual requirement of 62,000 homes a year on the assumption that, as in previous estimates, the backlog of housing need is met within the 10 year plan period. The London Plan also refers to a lower target of 49,000 homes a year, but this is based on only meeting the backlog over 20 years. The 42,000 target in the newly adopted 2015 London Plan is based on the capacity specifically identified in the 2014 Strategic Housing Land Availability Assessment (SHLAA). There is therefore an estimated supply deficit of 20,000 homes a year, even of the available capacity is brought forward on the assumed timescale.
This would be a fairly optimistic assumption. In 2013/4, the latest period for which reliable data is available, as published on 27th March in the Mayor’s Annual London Plan Monitoring Report for 2013/4, net completions were 28,325 homes, comprising 23,986 net new homes from new build and conversions and 4,779 net new household spaces in non self contained accommodation, primarily student flats. Of the 23,986 net additions of self contained accommodation, 20,422 were net additions from new building, 1,225 were net gains from conversions of existing property, and 2,289 were net gains from change of use of non-residential property. The figures were net of 1,643 units demolished, 1,767 losses from conversions and 141 loss from change of use of residential property to non-residential uses. The distinction between net and gross output is important given the IPPR proposals involve significant demolition of existing property.
A second key mistake in the report’s set of assumptions is the reference to London’s existing development density. On page 11 of the report, Adonis states that ‘in central London, the average density of new projects is 78 dwellings per hectare’, and then this is contrasted with much higher figures for Paris, Barcelona, and Kowloon in Hong Kong. In fact as reported in the London Plan annual monitoring report, in 2013/4, the average density of new development proposals – consented schemes – in London as a whole was 137 dwellings per hectare. For central London boroughs, the figures were as follows: City of London 431, Tower Hamlets 430, Hammersmith and Fulham 390, Southwark 283, Hackney 242, Lambeth 214, Islington 199, Westminster 177, Wandsworth 162, and Kensington and Chelsea 144. Camden was below the London average at 128 dwellings per hectare. These figures are borough averages – some of the high rise developments have been at densities of over 2,000 dwellings per hectare, above the 1,700 figure quoted for Kowloon. The top of the highest sustainable density range in the London Plan – for central London sites with excellent public transport access, is actually 435 dwellings per hectare. Some outer London boroughs are also seeing relatively high densities for new developments, for example Greenwich at 222 dwellings per hectare, Croydon 165, Newham 149, Brent 147 and Sutton and Waltham Forest, both at 140 dwelling per hectare. Development densities in London have doubled over the last decade – Adonis’s figures are actually 10 years out of date, and fail to acknowledge the change in the nature of London’s development output.
Adonis focuses on the large number of council estates in London, making the curious comment that ‘this is far larger than commonly appreciated, including by many local authority leaders.’ This ignores two rather important points – that significant proportions of homes on ‘council estates’ are no longer council homes, having been sold under Right to Buy, and that the proportion of London’s households who live in housing which is council owned has fallen by half over the last 30 years to only 23% in 2014. On page 9, the report refers to only a fraction of council estates having been redeveloped in the last decade or with redevelopment underway. This ignores the significant redevelopment programme in the period before 2005, for example the t redevelopment programmes in the 1990’s and early 2000’s in boroughs such as Newham, Tower Hamlets, Hackney, Southwark and Waltham Forest, with several thousand homes in high rise and slab block estates demolished.
The report also ignores the issue of what type of housing London’s households in housing need can actually afford. The recent Strategic Housing Market Assesment demonstrated that 52% of households in housing need cannot afford market homes. The SHMA estimated that the annual need for social rented homes in London was 15,700 homes . This compares with the 3,580 social rented homes completed in 2013/4. This figure will fall further given the Government and the Mayor have stopped funding new social rented homes, with resources now being focused on new rented homes with rents at up to 80% of market rent.
The report also ignores the early programmes such as Estate Action which involved significant investment in rehabilitating older council blocks, and the more recent homes programme. Demolishing blocks in which there has been significant public sector investment seems to be not very good use of public money. Moreover buying back flats from leaseholders who have acquired properties on a subsidised basis under Right to Buy legislation to then demolish the homes represents a significant loss of public resources. In demolishing 1960’s and 1970’s estates, we need to bear in mind that in some cases local authorities and in fact council tenants in general are still paying off the debt charges for the original construction, as loan repayment periods can be longer than the life of the buildings financed.
The fundamental problem of the proposed approach is to view council homes as public assets which can be sold rather than as public assets which have a long term and appreciating value in their own right, and which can themselves provide security for new borrowing for new investment. There is a second problem, which is the conception that council homes are primarily assets rather than actually consumer goods – ie are occupied by households as homes, and generally by households unable to access market housing options. On page 11, Adonis tries to deal with the issue of displacement. He states that residents do not need to be displaced by redevelopment, as the number of homes on an estate can be increased, especially if adjacent land is used. Leaving aside the issue that redeveloping adjacent land will often in itself lead to the loss of businesses and jobs, that in practice, in the majority of redevelopment schemes, social housing demolished is not replaced – most replacement affordable housing is at much higher rents, and often does not replicate either the dwelling mix, in terms of bedroom size, or the space standards of the demolished homes. Redevelopment is often predicated on much higher development densities – with less open space and reduced social infrastructure. In a context where there is no significant government funding for new homes, apart from some repayable loans, ir becomes extremely difficult for a council or developer to ensure the one-for-one replacement which was originally a planning policy requirement at least in the London context.
On page 11, Adonis refers to the fact that Inner London’s population is below its 1939 peak. This rather ignores the extent of overcrowding in Inner London at that time, and the intention of the postwar Government, as set out in the Abercrombie Plan and the New Towns programme, to relieve that overcrowding by providing new homes for lower and middle income households, not just in suburban London as had been delivered in the interwar period, but in the new and expanded towns beyond the Green Belt. The report ignores the extent to which overcrowding actually increased in much of Inner London and outer west and outer East London between 2001 and 2011, while the fall in population in inner west London in areas such as Westminster and Kensington and Chelsea actually reflects the under-occupation and vacancy in private sector stock, including newly constricted prime property, rather than any reduction in the number or floorspace of homes available. The report refers to the fact that Georgian terraces in Kensington and Holland Park are at quite high densities ( though somewhat lower if you include the space in the private Georgian squares), but has no suggestion as to how to make these valuable properties affordable to lower and middle income households, or how to replicate their built form, but not their price, within estate regeneration schemes. On page 12, Adonis quotes Yolande Barnes’ Savills study that recent regeneration schemes have ‘typically doubled residential densities while improving housing quality and amenities’. That study, however gives no real examples or compares space standards and price before and after regeneration.
On page 13, Adonis refers to living conditions on some estates as ‘chronically bad’, and ‘scandalous’. Estates are referred to as ‘sink estates’, ‘notorious’ and ‘doomed’. This emotive language is not very helpful. Where estates are in poor condition because of historic underinvestment, it should be recognised that investment in repair, maintenance and management could significantly improve the quality life of residents. The report does not recognise the extent to which forced transfer, and loss of home impacts on a household’s quality of life, especially where the transfer is to a location where a household has no connections and which may be a greater distance in terms of travelling time and cost from work and family members, friends and the childrens’ schools.
Adonis is also grossly out of touch in his depiction of council estates as ‘sink estates’, full of the most deprived. In London, council housing has always acommodated as tenants a broad spectrum of middle-level occupations as well as lower-skill people. Furthermore the ‘Right to Buy’ has meant many tenants, prospering in their work, could remain on their estates as owners, while the re-sale of purchased units further diversified estate populations. It is thus just untrue that council estates in London are full of the poorest.
One of the curious aspects of the Adonis’s introductory chapter and the report as a whole ( despite the inclusion of Peter Hall’ resurrected essay) is that it sees the densification of council estates as THE solution to London’s housing shortage. Not only is the issue of shortage seen only in quantitative terms, with no thought to the issue of which households are in housing need and what they can afford, but the report fails to consider the range of other development options, whether in the form of incremental suburban intensification and infill development in low density areas, urban extensions to London or the Home County towns. Many of the contributors to the report are opposed to development through urban extensions, whether or not in the Green Belt, or to major new settlements beyond London, remaining partisan advocates of the so called ‘urban renaissance’ . Other contributors are explicit promoters of their own specific densification schemes, whether developers seeking to maximise returns or council leaders trying to move their boroughs ‘up market’. There is no consideration of which development option or combination of options is most sustainable in economic, environmental or social terms, Moreover, there is no recognition that if you reduce the supply of affordable housing in one area, you need to compensate with additional provision somewhere else, and that this option does not actually come cheap or avoid political controversy. In conclusion the proposal is ill informed, not cost effective in terms of use of public resources, socially divisive, damaging to the social and economic sustainability of London and highly disruptive in terms of the impacts on tens of thousands – possibly hundreds of thousands of lower income Londoners. It will not solve London’s housing shortage and would make the lives of a large proportion of London’s population much worse than they are at present.
Duncan Bowie
28.3.15