Author: Steve Hilditch

How have the Tories done it? They have made council housing waiting lists decline Just Like That (with apologies to Tommy Cooper) whilst, as David Cameron frequently reminds us, they doubled under Labour.
                                   
Kris Hopkins                                                              Tommy Cooper
The answer of course lies in who is allowed to apply. In this great era of localism, the Government decides who is definitely not eligible to join a waiting list (and therefore become a candidate for the ever shrinking supply of social housing). Contrary to popular myth and Daily Mail headlines, you can’t usually apply if you are from abroad or even if you are a British Citizen but have been ‘habitually resident’ abroad.
As Housing Minister Kris Hopkins (pictured) explains: ‘In December 2013 we published statutory guidance for local authorities to ensure that only those with a well-established residence and local associations qualify for tax-payer subsidised social housing’.
Even if you are eligible, the local council might still decide that you cannot register on the waiting list. In a fascinating piece in today’s Guardian, Hilary Osborne shows how councils have slashed their waiting lists – which will be celebrated by David Cameron in due course. Havering council has hacked  its waiting list by three-quarters ‘in a bureaucratic sweep of the pen’, down from 12,000 to less than 3,000. Hammersmith and Fulham have magiced away – Tommy would be proud – most of their list – down from over 8,000 to a mere 768 in a single year. Their method is to apply a rule restricting eligibility (to join the waiting list, not to be allocated a home) to people who have lived in the area for a period of time – 5 years in H&F’s case.
The doubling of waiting lists under Labour – a clever but meaningless jibe – is also explained by eligibility rules and not by anything real taking place in the housing market. Labour took the view that waiting lists should be open to pretty much anyone who wanted to apply. They therefore became not just a measure of council-defined need but of people-defined demand. They became a measure of how many people wanted to live in a social rented home in a particular area. The fact that they soared shows that social housing is not just for the desperate but is a tenure that is attractive to an enormous range of people. If supply existed, it would be the tenure of choice for millions of people.
There were arguments for and against what Labour did. It was a worthy move against the kind of bureaucratic restrictions that the Tories seem to enjoy applying. It had the potential to boost geographical mobility – despite everything the Tories say about people moving to find work, their restrictions make this harder for people on low incomes. Against this is the fair argument that there is no point in registering people who have no hope of getting a house or flat because demand and supply are so out of kilter. Of course this argument is even stronger if the Tories get their way and squeeze social rented housing out of the system altogether.
Waiting lists remind us that there is a huge gulf between supply and demand. But in the next Election campaign, we will hear  a lot about how they doubled under Labour and halved under the Tories. Regrettably, there will be no Tommy Cooper around to remind us how it was done.

It was a bit of a surprise when Andrew Neil on Sunday Politics announced that Labour was ‘split’ on the issue of rent controls. His view was endorsed by his panel of journalists. A ‘big split’ and a ‘50/50 chance’ that Labour would adopt rent controls was the view of Helen Lewis of the New Statesman.
There doesn’t seem to be a lot of evidence for the split story apart from the happenings at Saturday’s Fabian Conference. According to LabourList, a ‘Dragons Den’ style debate led to rent capping being voted by far the most popular policy, and Shadow London Minister Sadiq Khan reportedly praised plans for a rent cap and suggested that it’s something he’d support Labour doing. LabourList comment: ‘Rent controls aren’t currently Labour policy – but it’s unlikely Khan would have endorsed this without speaking to Miliband first.’ Instant rebuttal often feeds the initial story, so it may not have been wise for shadow Housing Minister Emma Reynolds to tweet immediately and emphatically: ‘To be clear.. it is not Labour party policy to introduce rent controls’.
From little acorns big media stories damaging to the Labour Party grow. Of course, no-one ever defines the terms they are using. To the right, ‘rent control’ means a bureaucratic monster with the state setting all rents thereby destroying the market. To the left, ‘rent control’ often means preventing landlords from exploiting shortage by charging rip-off rents that destroy household budgets and push up the housing benefit budget.
The future of the private rented sector was carefully addressed and researched for over 2 years by Jack Dromey MP as shadow Housing Minister (until the last reshuffle). There was a lot of consultation with the sector, several papers were published, and an intelligent, workable and balanced policy to modernise the sector was emerging. No horses were being frightened (although donkeys were inevitably braying). On rents, Dromey always said that he was looking at alternatives based on European models of longer-term tenancies and  indexed rent increases. He always made clear that he was not talking about traditional rent controls, but a new model that works for both landlords and tenants based on making rents more predictable.
This was an important development and good evidence-led policy making. For many years Labour put the private rent free-for-all firmly in the box marked ‘too difficult to tackle’,  despite the basic idea being very popular in the Party. It was hard to challenge the  conventional wisdom that the last rent control regime caused huge disinvestment and that it was a good thing when the Tories deregulated in the 1980s.
There is a common understanding across the political parties that the only real way to bring market rents under control in the long term is to moderate house values in relation to incomes, which can only be done by building many more homes. However, even with a fair wind it will take a decade or possibly a generation of building at more than twice the current rate to have the desired effect. So the issue remains: what should happen to rents in a period of great shortage, when exploitation is rife?
We have shown before on Red Brick (for example here and here) how the countries with the most successful private rented sectors, like Germany, have a culture of long-term investment in residential property and have accepted the reasonableness of state influence over rent increases and stronger consumer protection through longer tenancies and security of tenure. Germany has strong rules against ‘usury’ which it might be useful to replicate in the UK.
It is vital that Labour continues its policy development in this area. Just like the 50p tax rate and the energy price freeze, ‘doing something’ about rents would be hugely popular amongst voters even if it would be bitterly resisted by some vested interests.
For Ed Miliband, the challenge is that high rents are a big contributor to the cost of living crisis. A London Assembly report last year showed that in two-thirds of London boroughs the cost of private renting exceeded half of average wages. Moderating rents should be seen in parallel with policies to tackle low pay and utility bills.
Like it or not, we will be dependent on private landlordism for the foreseeable future. But private renting has to be modernized, professionalized, and properly regulated. And, just like utilities or transport, rents should be subject to fair rules of consumer protection.

90 years ago today the first Labour Government was formed. It was a minority government, formed when the biggest party after the December 1923 Election, the Tories, could not gather a majority in the House. The first Labour government lasted a mere 266 days before losing the next Election (despite increasing its share of the vote, a Liberal collapse letting the Tories back in).
Often regarded as little more than a footnote in history, the importance of the 1924 Government was that it was the key milestone in the transition from the old Tory/Liberal order to the new two party era of Labour and Tories.
Ramsay MacDonald’s Government is often regarded as having few achievements in Office. But it established the National Grid and passed one of the most progressive Housing Acts ever seen. In their book, Britain’s First Labour Government, John Shepherd and Keith Laybourn say that the Housing Act was the Government’s ‘singular success’. With some justice, the Labour Manifesto for the 1924 Election called it ‘The Great Housing Charter’.
The Act was also the greatest achievement of John Wheatley, the Labour Minister of Health. He was determined to rectify the housing shortage caused by the disruption of the First World War and the subsequent difficulty faced by working class families in obtaining decent housing that could be afforded from their wages. Wheatley’s plan was simple: to greatly increase subsidies to build council houses and the extend the period of loans taken to build the homes. The Act was credited with achieving the construction of more than half a million rented homes at controlled rents over the next decade.
You can read a great article on the visionary pioneer John Wheatley, his origins and his contribution to the development of council housing, by Steve Schifferes posted on Red Brick in 2011.

If pride comes before a fall, then these Tories are in for a hell of a tumble. David Cameron at PMQs last week had the nerve to boast about big increases in housing starts and completions as if they had cracked the problem. And Grant Shapps had the effrontery to brag about the Government’s affordable housing record, placing it at the top of his list of Tory achievements in a piece on Conservative Home, bizarrely entitled ‘a blast on the trumpet for full orchestra conservatism’. In it he claimed that they are building 170,000 affordable homes, bringing about ‘the first net increase in social housing for the last three decades’.
As PMQs and the recent House of Commons housing debate show, the dispute about the relative housebuilding records of the last two Governments is becoming increasingly sterile. The public would be forgiven for ignoring it altogether – arguments about who has built least since which year in the 1920s do not get the juices flowing. I can’t do better than agree with Jules Birch that the debate resembles bald men fighting over a comb.
As far as I can see from the reams of housebuilding statistics – feel free to root around in the CLG’s Live Tables – housebuilding was going along at a gradually rising and reasonably solid rate until the global banking failure, ironically triggered by the USA’s housing finance sector. However, output continued to be hopelessly insufficient in relation to the requirement, as it had been for 3 decades, and there was long-term upward pressure on prices, especially in high demand areas. Unsurprisingly, the credit crunch led to private housebuilding confidence collapsing as developers found it hard to borrow and households were unable to get mortgages. Gordon Brown, bless his cotton socks, put his foot on the affordable housing accelerator in a compensatory Keynesian move. Given the inevitable lags involved, this inheritance made the Coalition Government’s record (and in particular Boris Johnson’s) look much better than their policies deserved.
After the 2010 Election, housebuilding, like the rest of the economy, experienced 3 wasted years of austerity, kept in the doldrums by huge cuts to public investment. It is now beginning to recover, as it always would – that’s how capitalism works. There are two considerations: could Government have done more to get recovery going faster? – to which the answer is undoubtedly yes; and are the Parties’ policies for the future going to get us back to pre-credit crunch days – and much more? This is the debate we should be concentrating on.
The modest housebuilding recovery seems largely cyclical and would have happened anyway, but the danger is that the cycle has moved permanently to a lower level. There is no sign of a policy that will make a difference on the scale that is required. Coalition initiatives – New Homes Bonus, fiddling with Planning, and a contradictory mix of localism and centralism – have been largely ineffectual. Their biggest move – Help to Buy – by common consent may have a supply effect but will have a bigger price effect and is therefore more dangerous than beneficial.
Under Jack Dromey, Labour quietly built a sound policy platform but housing’s key decisions are made in the Treasury Team not the Housing Team. The promise by the two Eds to produce 200,000 homes a year by the end of the next Parliament is an important step although it is not entirely clear how a virtual doubling of output will be achieved. There is the Lyons Commission to come, on which a lot rests, but a start has been made with a clear national target, action on land and property values (use it or lose it, right to grow, Mansion Tax), raising the cap on council HRA borrowing, modest but specific commitments on affordable housing grant, and additional New Towns.
We are all aware of the hubris of Grant Shapps but he should not crow about affordable housing. His greatest achievement has been to sow such confusion about the meaning of the words ‘affordable’ and ‘social’ that it is almost impossible to discuss the topic at all without endless caveats and explanations of terms. He created the ‘affordable rent’ (AR) product which is not affordable. He set policies (virtually all new grant-assisted homes at AR, conversions of existing social rent to AR, enhanced right to buy, encouraging open market sales of existing homes to fund the programme) which are designed to remove social rented housing step by step. Now they have a new ploy: they have started calling ‘affordable rent’ social housing and hope to get away a further statistical manipulation.
The big difference between Labour and Coalition policies has been the huge reduction in grant per new dwelling since 2010. Providers have to borrow considerably more to finance each dwelling, additional borrowing which can only be financed by increased rental income and cross-subsidy from sales. Raising rents rapidly makes many more people eligible for housing benefit, a budget they are trying to increase and squeeze at the same time.
So what are the figures on affordable homes?
Labour’s National Affordable Housing Programme covered the years 2008-09 to 2010-11, although completions continued into 2011-12 and 2012-13. It produced 93,200 homes for social rent and 80,700 homes for low cost home ownership, a total of 173,900 starts over 3 years, over 57,000 a year. Completions from Labour’s programme that occurred during Boris Johnson’s first term in London and after the Coalition came to power nationally in 2010 enable them to make claims that they have provided some social rented housing.
The Coalition’s first Affordable Housing Programme for 2011-12 to 2014-15 claimed (at September 2013) to be producing 69,694 homes for rent plus 18,853 LCHO, a total of 88,547 or over 22,000 a year. Virtually all the rented homes were ‘affordable rent’ not social rent.
The Coalition’s second Affordable Housing Programme, for 2015-16 to 2017-18, promises to produce 55,000 affordable homes of all kinds each year, around 165,000 in total over 3 years. Around 60% of the homes will be for rent, but these will all be at ‘affordable rent’.
Grant per dwelling has fallen from over £51,000 in Labour’s programme to £17,400 in the Coalition’s second wave. Total spend on grant has dropped from an average of £2.97 billion a year under Labour’s programme to £0.96 billion in the Tory/LibDem second wave. (All figures thanks to the excellent UK Housing Review).
Shapps’ talk about an increase in ‘social housing’ when they are only building homes for unaffordable ‘affordable rent’ is another cynical semantic trick by the artful dodger. ‘Social housing’ means homes that are provided by registered providers at ‘target rents’ set under the rent convergence formula established more than ten years ago by Labour. These rents have been rising faster than inflation but are broadly around 40-45% of the local market rate. The Coalition’s ‘Affordable rent’ homes can go up to 80% of market rates and average around 70%. There is no way on earth these can be counted together as if they are the same thing.

It’s not well known that it was Labour that first promised council tenants the Right to Buy. For example, the 1959 Manifesto said that Labour would take over many of the private tenanted properties that were in appalling condition, repair and modernise them and then let them at fair rents. Labour then said that every tenant ‘will have a chance first to buy from the Council the house he lives in’. Labour’s twin housing aims were remarkably balanced and are still fit for 2015: ‘to help people buy their own homes and to ensure an adequate supply of decent houses to let at a fair rent.’
I can’t imagine that High Gaitskell in his worst nightmares would imagine the disaster that the Right to Buy has become 50-odd years later.
Tom Copley AM, Labour’s housing spokesperson on the London Assembly and chair of the London Labour Housing Group, has compiled an astonishing report on the disaster of the right to buy in London. Tom concludes:

‘As a policy, Right to Buy is possibly unrivalled in representing such poor value for money to both taxpayers and local authorities. For taxpayers, they not only funded the initial building of the council home, they then subsidised the substantial discounts offered to tenants and then – once the homes were sold – missed out on the rental income that would have covered the build costs.’

Tom focuses on the evidence he has collected that shows that a minimum of 36% of all homes sold by councils across London are now let by private landlords. Many are let at extremely high market rents to tenants who need support from housing benefit. Tax payers have to pay again. To add insult to injury, some of the homes are let back to councils or housing associations to house homeless households for which the councils have statutory responsibility.
Thatcher’s decision to take most of the money from RTB sales back to the Treasury and to refuse to allow councils to build replacements with the cash received has been a significant contributory factor to the housing shortage. Over 270,000 council houses and flats have been sold in London since 1980.
The boroughs where the highest percentage of the sold stock has ended up being privately rented are: Tower Hamlets (51%), Enfield (50%), Kingston upon Thames (46%), Ealing (41%), Barnet (41%), Barking and Dagenham (41%), and Kensington and Chelsea (40%). The lowest is Brent with 24%.
To bring this disastrous policy outcome under control, Tom suggests a few policy reforms, including:

• Mandatory covenants on all RTB sales to stipulate that the home cannot be privately let.
• Abolition of the current system of discounts.
• Councils should retain an equity stake in all homes sold.
• Councils should have a right not to sell if it is in the community’s interest not to do so.
• Councils should have the right of first refusal when a RTB property comes on the market.
• The Government’s commitment to replace homes sold should be a genuine one-for-one, like-for-like replacement.

You can follow Tom @tomcopley and London Labour Housing Group @lhglondon on Twitter.

By Andy Slaughter MP
An article in yesterday’s Financial Times exposes Hammersmith & Fulham Council’s latest attempt to bulldoze affordable homes and turn the sites into luxury flats.
The scheme is a ‘joint venture’ with developer Stanhope  – owners of the BBC Television Centre site in Wood Lane which received planning permission for over 1000 luxury homes on 19 December – which both they and the Council will fund and profit from.  The Council’s investment in the speculative scheme comes from selling the best quality existing Council homes as they become vacant.  So far over 200 such homes have been sold and 150 left empty for development. That’s 350 local families forced out of the area or housed in expensive, overcrowded or unfit flats.
According to the FT:
‘Leading regeneration developer Stanhope is facing a political row over a groundbreaking deal that it is about to sign to redevelop a swath of London council estates.  The plan will see hundreds and possibly thousands of council houses in Hammersmith & Fulham, west London, demolished and replaced with properties for sale.
Conservative-dominated Hammersmith & Fulham Council, which is widely seen as pioneering in its approach to housing policy, is set to approve the 15-year joint venture early next month. But the area’s Labour MP has written to the company warning that the deal risks its corporate reputation.
Andrew Slaughter, MP, called the joint venture “the clearest example yet of social engineering in a borough that is now notorious for such schemes”. He warned Stanhope chief executive David Camp that such plans would face “huge public opposition” during the forthcoming local elections in May.
Hammersmith & Fulham has sold off 209 empty council houses in the past four years, raising £88.5m cash, according to data disclosed to Mr Slaughter under the Freedom Of Information Act. The council said that it would spend the proceeds on the development of new homes.
Mr Slaughter said: “Using the sale of vital affordable homes to enable the demolition of others and building unaffordable developments in their place is not regeneration, it is social engineering, and no respectable developer should associate themselves with such pernicious, politically-motivated activity.”
The council will put two initial sites of 150 existing social rented homes into the joint venture, replacing them with 300 homes for sale, of which 40 per cent will be sold at a discount to their market price.
All the current homes on both sites are empty. Some have been unoccupied for several years. Mr Slaughter said that some former residents, his constituents, complained they had been “tricked into moving out of their homes to allow improvements works then not permitted to return”.‘
The basic angle is a familiar H&F approach – how do we build more luxury flats and get rid of affordable ones in the process.  But there are several more twists here that make it more blatantly political.
Current schemes are like the Earl’s Court/West Ken partnership with Capco which aims to replace 760 council or ex-council houses and flats with ten times the number of luxury high-rise flats. This notionally includes replacement floor space for the demolished homes on similar terms, but there is no guarantee they will end up as affordable.
But the new Stanhope deal offers even less to low income or average earners.  The council tenants evicted from their homes will be offered existing council flats, but they are just jumping ahead of other families who would have been re-housed, the stock is still shrinking.
I have written to the Chief Executive of Stanhope which claims to be a leader in ‘responsibility to the community’ asking them to withdraw from the scheme.  Read my letter HERE.

According to the newspapers this morning, there is disharmony in the Tory ranks over George Osborne’s speech on cuts yesterday. ‘Sources close to’ Iain Duncan Smith have accused the Chancellor of ‘hacking at the same people’. Nick Clegg also came close to bursting a blood vessel with his condemnation of the idea of further welfare cuts as ‘lopsided and unbalanced’ and a ‘monumental mistake’.
It reminds me of the old adage:  ‘When rogues fall out, truth is revealed, and honest men get justice.’  We can but hope.
Osborne’s speech was extraordinary. It was a long way from the pre-Xmas ‘we’ve turned the corner’ rhetoric. He brought us back to austerity with a bang. Now the job ‘is not even half done’ and 2014 would be the ‘year of hard truths’.
His big message was that the extra £25 billion cuts in the two years after the Election – already agreed by the Coalition – would include at least £12 billion from ‘welfare’. But he offered few examples of where the cuts might come from: in fact he mentioned only two possibilities: cutting housing benefit for the under-25s and charging more rent to higher earners who live in social housing.
On the latter, we have rehearsed before (here and here) the arguments about means-testing social tenants in a great bureaucratic effort to discover the few who earn above £60,000. Oddly, it is not even a welfare cut: people on higher incomes are unlikely to be benefit recipients and, if they decide to move because of their higher rent, they are likely to be replaced by a new tenant who is a benefit recipient (whether in or out of work). So it would have the opposite effect to that he wishes for.
Removing housing benefit from the under 25s would be a punitive and controversial move. Half of the under 25s in receipt of HB have dependent children so it’s not just a matter of believing that a young person should go back home as a consequence. Most graduates begin their working careers in low paid jobs, often in the city they were educated in not their home city. What a dreadful situation they would face: stay in a low paid job without HB or try to get a better paid job, which would trigger having to pay back student loans. It seems particularly cruel.
It is interesting that this announcement about under 25s, together with the strong statement from both Osborne and Cameron that they will retain the ‘triple lock’ for pension payments and all other pensioner benefits – which are hugely expensive commitments – has reignited the debate about inter-generational fairness.
Meanwhile, Bozo himself, the London Mayor, confused everyone by condemning all sides. He said Osborne has got it wrong because he should cut health, schools and international aid instead, but also condemned Clegg as performing ‘a very important ceremonial function as David Cameron’s lapdog-cum phophylactic protection device for all the difficult things Cameron has to do… a kind of lapdog’. Funny but completely meaningless as usual.

Happy New Year and all the best for 2014.

It’s quite a long time, around 40 years, since I picked up an economics textbook. But the basic laws of supply and demand get lodged in your brain and help in the daily struggle to interpret what is happening in the world.
However foggy and distant these memories are, I seem to be better informed about the interaction of supply and demand than our Prime Minister. As the New Year breaks, David Cameron has been keen to make a big noise about his ‘Help to Buy’ scheme, which has now supported 750 households to buy a property. Yesterday he dismissed fears, expressed by almost every economic commentator, that it would create a new property market bubble. His argument was that property prices outside London and the South East are ‘still way below the peak they reached in 2007′. There is, he said, ‘no evidence of a problem’. He dismissed criticism of Help to Buy as ‘London-centric’ (no hint of irony!), pointing out that prices in other regions have been relatively stable, failing to mention that one-quarter of the purchases so far have been in the London and South East.
Better versed in economics than Cameron, Business Secretary Vince Cable takes a diametrically opposing view from his boss. Cable has attacked the Help to Buy policy consistently, repeating his complaints at least twice over the holiday period, warning about ‘a raging housing boom’ in London and the South East on the Marr Show and ‘a recovery based on property inflation’ yesterday in the Evening Standard.
Cable argues that help should be targeted at areas where the property market is flat. ‘Help to Buy is a good idea if prices are collapsing and development is stalled’, he said, ‘I’m sure it has a very useful role to play in Northern Ireland and parts of the North of England’. He attacked the central economic policy of the Government: ‘What I want to see is a real economic recovery based on British industry and exports of goods and services, not an artificial and temporary recovery based on property inflation.’
So what does economic theory tell us about subsidies and how they might impact on the housing market? As a subsidy, Help to Buy works on the demand side, enabling people to borrow more to buy their property. Theory says that subsidy on the demand side puts prices up, which in turn leads to a responsive increase in supply. However, housing is an unusual product because the supply of it is inelastic. Price rises might encourage more existing owners to put their homes on the market but the speed at which the market can respond by building additional houses at the new higher price is extremely slow. The policy will potentially have a big effect on prices before it has any impact on supply. This is simply not what is needed.
The alternative policy of introducing subsidy on the supply side would have very different effects. It would reduce the market price at any level of demand, but also increase supply. Supply would still be inelastic, but the effect of the subsidy would be more direct and predictable for builders. (For anyone interested in reading more, a useful summary explanation of supply and demand for housing can be found here.)
Currently we have no mechanism for introducing Help to Buy in some regions and not in others, so the impact on the housing market in London and South East, which is already drastically overheating, is inevitable and cannot be dismissed in the superficial way that Cameron has done. A further increase in house prices in London will have a wide range of economic effects and will push homes further out of reach of people on even good incomes.
Help to Buy is the wrong policy at the wrong time and acts on the wrong side of the supply/demand equation. In the words of the Institute of Directors, ‘The world must have gone mad – the housing market needs help to supply, not help to buy’.
This policy is not about housing affordability, housing supply, or pursuing the home ownership dream as Cameron would put it. It is a desperate attempt to boost the Tories’ chances at the 2015 Election by creating the appearance of economic good times whilst the truth is less rosy. Nothing is more damning, or more accurate, than Vince Cable’s description of it as ‘an artificial and temporary recovery based on property inflation’.

    ‘Get stuffed’ – what Boris Johnson said to GLA Member Andrew Dismore during questioning about fire service cuts. 

Yesterday the Mayor of London produced his latest ‘prospectus’ for bids to provide ‘affordable’ housing in London. It sets out the terms under which the Mayor’s budget of £1.25 billion will be spent in the years 2015-2018, for which he claims he will provide 15,000 ‘affordable’ homes a year. (My apologies for always putting the word ‘affordable’ in inverted commas; I do that because that’s what they call it – it’s not an accurate description).
What is astonishing about the document is that it contains not one word of evaluation of the current ‘affordable rent’ programme. This has now been around for some time but it is the most secretive and least scrutinised housing programme I have ever known. Information has had to be dragged out of the Mayor and when it does come it tends to be unintelligible.
We did finally last week get some outturn data. It is important to remember that it takes several years to plan and build homes, so the ‘completion’ figures for 2008-09 and 2009-10 result from Ken Livingstone’s programme that Johnson inherited, and the figures for 2010-11 and 2011-12 result from the Labour Government-funded National Affordable Homes Programme – underway before the Osborne cuts had their impact.
Counting all types of ‘affordable’ homes, in 2008-09 a total of 11,537 were completed in London funded by the Mayor; in 2009-10 it was 12,602 and in 2010-11 it was 12,869. In 2011-12 it peaked at 16,173. Then, in the first year that the Johnson/Osborne policies became effective, it plummeted to a mere 8,114. In the first six months of 2013-14 (to October) the figure was a mere 1,490.
It is still the case that the majority of homes for which Johnson claims credit were either programmed by Ken Livingstone before his 2008 defeat or funded by the Labour Government before its defeat in 2010. In short the Johnson era has been a complete and unmitigated disaster with huge rent hikes but still very few new homes.
Why on earth should we believe that his strategy for 2015-18, with a lot less money, will be any more successful? There is no reasoned argument in the prospectus for Johnson’s decision to split the new the ‘affordable rent’ programme into two halves – ‘discounted’ at 80% of market rent and the new ‘capped’ at 50% of market rent. It may be a little victory – an acceptance that rents in the first programme were far too high (they averaged around 65% of market rents). But then again half the new programme will be stuck even more firmly to the 80% ceiling.
Johnson requires providers to sell high-value existing stock or to re-let existing social housing at ‘affordable rents’, or even market rents, in order to cross-subsidise the programme, but there is no information on the assumptions that have been built into the programme – how many are needed to make the sums work? When it comes to contract negotiations, held in secret, how many sales and conversions will the GLA be pressing for?
There are so many unanswered questions, and the failure is so dire, surely it is time for providers and boroughs to make a stand. Some boroughs are already taking a judicial review on rent levels, and good luck to them. If the G15 of biggest housing associations came together and said no, we won’t work through this framework – rents are too high and the financial implications too severe – the Mayor would eventually have to back down. Boroughs should make it clear to the GLA and providers that such high rents are unacceptable in their boroughs.
Former Housing Minister John Healey makes a similar plea in the Guardian today for the sector to stand up for social housing. There is, he says, little by way of sustained opposition. It is irritating the way in which providers and even some campaigning charities get lost in technocratic arguments about the best way to borrow money and how to structure shared ownership arrangements. John hits the nail on the head when he says ‘Much of the housing sector seems reluctant to pick a fight with a hostile government’. He argues: ‘The policies betray a deep hostility to council and housing association homes at the heart of this government. As a senior civil servant confided to me: “David Cameron thinks social housing means sink estates; George Osborne just sees Labour voters.” ‘
John quotes a leading housing association saying that there will soon come a time when even those providers with a strong sense of social purpose (regrettably a diminishing number) are just not able to provide genuinely affordable housing in the capital.
Surely the time has come for a more trenchant defence of the values that underpin the social housing movement? Johnson is failing to build new homes despite having hiked rents up to unforgiving levels. It is madness to remove subsidy from the building of new homes in the knowledge that the cost will either be borne by tenants themselves, by housing benefit, or by selling stuff off.
The failure to provide genuinely affordable housing is the ultimate ‘cost of living’ issue.
It’s time to speak up!

Like Budgets and Comprehensive Spending Review announcements, Autumn Statements (AS) tend to spin well on the day – when no-one else has seen the documents or looked at the detail or reworked the figures – but then begin to unravel as the work of scrutiny gets done.
George Osborne’s Statement this year was drowned out by the huge coverage given to the death of Nelson Mandela and by the storm-induced tidal surge, but the criticisms that are gradually emerging have also been relegated to the less-read pages. As always with Osborne, the Statement was highly political and an exercise in smoke and mirrors. His arrogant smirking grin just adds to the feeling that he is up to no good. Given how much stick he has received about his performance, it turns out that what Ed Balls said in response was pretty much spot on.
The key message was made strongly by the Guardian’s Larry Elliot – that Osborne’s austerity plan has delayed the recovery and made sure it is weaker than it would otherwise have been. To make growth look good he has ‘repeated the sins of the past’ by easing credit for house purchase through ‘incentives for banks to lend for property purchase and state-backed incentives for people to take out home loans’. In the subsequent commentary, Osborne has failed to allay fears that he is encouraging a house price bubble to help create a ‘feel good’ factor in the run up to 2015. The increase in stamp duty from more sales at higher prices (but not more production) is also a helpful boost to the Treasury. The bubble is not evident in large parts of the country, and is being led once again by London and the south east. Even so, the Halifax national index shows that house prices are rising at nearly ten times the pace of average earnings. Even the AS revised the Government’s estimate of house price growth substantially upwards.
As the full effect of Help to Buy has yet to be felt, Colin Wiles made the interesting observation that it has already changed the psychology of the housing market, with people rushing to buy in case they are priced out further down the line by the new bubble. So, the fear of the bubble helps create the bubble.  Help to Buy is therefore, Colin says, ’no friend of the priced out generation’.
On council housebuilding, Osborne probably got the headlines he wanted although his initiative may not be what it seems. He gave the appearance of responding to calls from the housing world to ‘lift the cap’ that prevents councils from making the most of the ‘headroom’ in their Housing Revenue Accounts to borrow to build more homes. In the documents the increase in borrowing seems less than he announced, and is small beer anyway.
Councils have called it ‘a small win’ – they wanted the cap abolished – and the Chartered Institute of Housing has said it is ‘far too modest’.
With Osborne, nothing is ever what it seems: to get access to the modest additional loans, Councils will be ‘encouraged’ (I think that means it is a requirement) to sell ‘expensive properties’ to enable them to build on cheaper sites. Each council will have to do this individually and they will be required to demonstrate that they are making best use of their assets. This is code not only for having plans to sell off more valuable property as it becomes vacant but also to convert many more social rented homes to the much higher ‘affordable rent’. As Jules Birch commented: ‘what seems like a major concession to council housing is actually an acceleration of the conversion of social housing to affordable rent.’
Surely it is good to do anything to build more affordable homes? Yes and not necessarily. There are two important measures of affordable housing provision. The first is the number of new homes that are built, the second is the flow of lettings, from existing as well as new homes, to people in housing need. By selling off expensive property, ‘converting’ social rents to affordable rents when homes become vacant, and increasing the right to buy, the Government and especially the Mayor of London are putting all the emphasis on the former, to get the numbers up to save face, and none on the latter. They are aided and abetted by some of the development-obsessed housing associations, and some councils, that get excited about being good ‘asset managers’.
The affordable homes programme is proceeding at the expense of the existing stock of social rented housing. High rents will also put further pressure on housing benefit at a time when the Government’s new cap on total benefit spending can only be delivered by making large further cuts in housing benefit.  The policy might just limp through until 2015 but there will be a terrible crunch shortly afterwards.
The Autumn Statement contains no definition of the ‘expensive housing’ that councils will be expected to sell. In his blog, Jules Birch sources this policy and warns people not to believe it only affects London:

‘the inspiration clearly comes from a 2012 report by Policy Exchange called Ending Expensive Social Tenancies. It defined ‘expensive’ as meaning valued above the regional median adjusted by bedroom size.
It estimated that 818,600 social tenancies worth £159 billion are ‘expensive’ when judged on this basis: 21.8 per cent of England’s council and housing association stock. Of those 339,000 are council (18.7 per cent) and 479,000 housing association (24.3 per cent).
If you’re assuming this is mainly to do with London, you’re wrong: almost one in three social homes in London are ‘expensive’ but so too are 26 per cent in the East of England, 22 per cent in the South East and 20 per cent in the South West. The least affected region, the North East, still had 15 per cent of properties classed as ‘expensive’.”

The AS also announced a new initiative to increase the right to buy through the introduction of agents to help people negotiate their purchase. Trotters Independent Traders come to mind. The Tory promise that council sales would be replaced ‘one for one’ is looking increasingly sick as the latest figures show that only one council home is being built for every seven sold. Not just smoke and mirrors. Deception as well.