Author: Steve Hilditch

By Dermot Mckibbin
Just before Christmas Conservative MP Peter Bottomley and Labour MP Jim Fitzpatrick, the two joint chairs of the all-Parliamentary Group on Leasehold and Commonhold reform, secured a rare debate in the House of Commons on leasehold reform. (see also the House of Commons Library briefing for the debate).
The Government Housing Minister, Gavin Barwell MP told Parliament that he felt concerned about the difficulties that leaseholders were facing and that he would come back to the Commons in 2017 with reform proposals.  It is rumoured that the forthcoming Housing White Paper will contain further details. The Shadow Minister Ruth Cadbury MP announced that Labour would end the practice of excessive ground rents for leasehold houses and favoured the introduction of the Commonhold tenure as well as other reforms.
It is now clear that there is a political auction between the 2 major political parties in Westminster as to who can offer the best housing policies for leaseholders. Research by the coalition Government found that there are more than 4.1 million leasehold dwellings in England.  This figure is significantly higher than the previous estimate of between 2 and 2.5 million.
The Leasehold Knowledge Partnership Group (LKP ), who service the all-party group, estimate that there were around 5.37 million leasehold properties in England and Wales at the end of 2013.  43% of all new build registrations in England and Wales in 2016 were leasehold. There are too many votes at stake here for any political party to ignore the housing needs of leaseholders.
The problems of leasehold houses featured high in the debate. Both the Guardian and the Telegraph are united in their coverage of this issue. In the debate the Government Minister quoted LKP figures that 6,000 leasehold houses were built last year. Some of these properties have no estate management services and exist only to provide an income stream for the developer. The ground rent is sold off separately by the developer; often the leaseholder does not know about the sale. Some house purchasers who have  often been advised by a solicitor appointed by the builder find out that the ground rent can double every 10 years. This has the effect of making the house unsellable. This is an issue in the North West.
The consumer magazine Which estimated in 2012 that the amount of unlawful service charges was £700 million. Jim Fitzpatrick MP believes that the current figure could be £1.4 billion. Several MP’s referred to a national survey carried by the Leasehold Advisory Service in which 53% of leaseholders surveyed regretted buying a leasehold property. This is a high rate of dissatisfaction.
Several MP’s referred to the fact that the first tier property tribunal is no longer an informal dispute resolution scheme. Leaseholders who apply to the tribunal for a determination about unreasonable service charges are likely to face a barrister employed to defend the interests of the freeholder. Under the terms of their lease many private sector leaseholders can find themselves liable to pay the legal costs of the freeholder even if they have been successful at the property tribunal.
Peter Bottomley MP referred to a private leaseholder who was liable to pay the legal costs of his freeholder after a successful application to the tribunal. He refused to pay these costs. The freeholder applied to court for forfeiture of his lease as they were entitled to do. Had this application been successful the freeholder would have been entitled to all of the equity in his property even though the debt was comparatively small. Successive governments have ignored the Law Commission’s proposals to abolish forfeiture which is a nuclear weapon in favour of freeholders.
Insurance is a major issue for private sector leaseholders. The financial conduct authority has found that freeholders are able to pocket commissions of 40%.There  has been little interest by the Serious Fraud office and others in tackling cartels operated by at least one freeholder.
Unlike England and Wales, most English speaking countries no longer use the leasehold tenure system. The Commonhold and Leasehold Reform Act 2002 sought to introduce a system of Commonhold whereby the legal ownership would be held jointly by all leaseholders. Residents could decide for themselves how to manage their properties.
Unfortunately there are very few examples of the Commonhold tenure. The Act failed to make it compulsory for newly built properties. For existing properties all leaseholders in the property had to agree to convert to commonhold. This proved impossible to achieve. Under the commonhold system there is a strong potential for many leasehold problems to disappear as all the joint owners will have a strong incentive to manage their property as efficiently and fairly as possible.
The Conservatives are too close to the building lobby and the interests of property to be in favour of any large scale reform of the leasehold housing market. Their record since 2010 on leasehold reform speaks for itself. There is a now an opportunity for Labour to win the votes of leaseholders. More thought needs to be given to raising this issue within the Labour Party as leasehold housing issues are seldom discussed within the party itself.
Dermot Mckibbin is a member of Beckenham CLP. He is a retired housing lawyer.
 

As the Homelessness Reduction Bill completes its Committee stage – lengthy for a private members’ Bill because it has complex provisions that have been frequently amended during the discussions – suspicions are rising about the Government’s motivation in supporting the legislation. The fear is that it is setting a trap for local government to divert blame from Government when homelessness continues to rise, as it surely will.
The Government has always said it would ‘fully fund’ councils to enable them to deliver the significant additional services that will be needed to genuinely achieve the Bill’s aims of preventing more homelessness, as has been accomplished in Wales through similar legislation. This week it announced a headline figure of an extra £48 million additional funding. But the Minister’s (Marcus Jones) statement   makes it clear that this sum covers the 3 years of the spending review period, and amounts to £35m in 20170-18, £12m in 2018-19 and ZERO in 2019-20. He claimed that ‘offsetting savings’ will make sure there are no costs thereafter. Decisions have not yet been taken about the distribution of these funds between councils to reflect their differing needs of different councils, but it represents an average per council of less than £150,000 over 3 years.
The Association of Housing Advice Services called the funding allocation ‘desultory’. Based on data from five representative London councils, AHAS followed the findings of the earlier legislation in Wales and applied them to London, and estimated conservatively that the total cost to London alone would be more than £160 million. Their full analysis can be found here.
AHAS also make it clear that the rate of successful outcomes achieved in Wales is very unlikely to be repeated in London, where the pressures are significantly greater and ‘solutions’ to homelessness much more difficult to achieve. The most significant extra cost will be for additional temporary accommodation. According to Inside Housing, individual London boroughs have also been making assessments of cost that are significantly higher than the Government has allowed for – £2.4m in Lewisham, £2.6m in Ealing. In most cases, the extra funding from Government will be little more than a partial offset to the service cuts already made.
The Conservative chair of the Local Government Association, Lord Gary Porter, has called for a full review of the costs after the initial two year period because the initial costings are based on assumptions that are difficult to predict. The LGA has warned that homeless placements in temporary accommodation have already risen by 40% in the last four years and homelessness services face a funding gap of £192m by the end of the decade.
As previously discussed on Red Brick, the core of the problem is that Wales’ success in homelessness prevention is unlikely to be replicated in the more high pressure areas of England, and especially London, in the context of wholly inadequate affordable housing supply policies and benefit cuts. We are grateful for small mercies: anything that improves the services provided to homeless people and which helps some of them avoid homelessness is to be welcomed. But, rather like the management of beds in the NHS, the simple reality is that the use of temporary accommodation is rising rapidly because there is nowhere for people to move to.
‘Solutions’ to homelessness are becoming harder to find. Most homeless people simply cannot afford to buy on any scheme, many find it impossible to stay in or to find employment as they go through the experience of homelessness, access to the private rented sector is becoming harder and more expensive each year, benefit caps are pushing the PRS out of reach of many more people, and the social housing stock is in free fall – this week the Chartered Institute of Housing estimated that almost 250,000 social rented homes will be sold or converted to other tenures by 2020, intensifying the problem each and every year. Any notion that the Bill’s provisions will pay for themselves after two years is totally fanciful.

Any notion that the Bill’s provisions will pay for themselves after two years is totally fanciful.

Concern about what the Government is up to was raised this week by a letter from Government to councils setting out its assumptions. As reported in Inside Housing, they are expecting a 30% reduction in homelessness acceptances by the third year of the Bill’s implementation.
I agree with the LGA and others that it is almost impossible to make predictions of what will happen due to the Bill, but I confidently forecast that there will not be a 30% reduction in acceptances, rather the opposite, unless councils’ actual response to the Bill is to become more severe at gatekeeping – as happened after the 2002 Act – and ‘advice’ becomes ‘diversion’ and ‘blocking’. Ministers have threatened to ‘intervene’ if councils do not deliver and send in staff where councils do not follow its requirements, proving yet again that empty vessels make most noise.
I also predict that in 3 years’ time, when the numbers have grown yet further, Government will be happily passing the buck onto councils. They were on board to the legislation, they will say, and we fully funded them to implement it. It is not central Government to blame, it is councils, and mainly Labour ones at that.
This does not in my view mean that we should ditch support for the Bill. Instead, it is vital to highlight the true costs of implementation and to make it clear that central Government is selling local government short by a long way. Councils must up their demand for Government to adopt policies that will lead to a dramatic increase in the supply of social housing – the only real long term solution to the homelessness crisis. Locally, it is important to campaign for proper implementation – some homelessness is preventable and of course it should be prevented wherever possible.
It is good that councils will have duties towards a wider range of people, many of whom have been neglected before. But the fact that many councils could do more should not obscure the fact that most are struggling to find genuine solutions to homelessness as the housing crisis for people on low incomes intensifies.
Inside Housing magazine has had excellent coverage of the passage of the Bill  and they have produced this excellent summary of its provisions, reproduced here for the benefit of readers.
AT A GLANCE: THE HOMELESSNESS REDUCTION BILL
The bill is made up of 12 measures:

1. A change to the meaning of “homeless” and “threatened with homelessness”. Each household that has received an eviction notice is to be treated as homeless from the date on which the notice expires, and the period at which a person is threatened with homelessness is changed from 28 to 56 days.
2. All homeless people have access to free advice and information.
3. Local authorities are required to carry out an assessment of what led to each applicant’s homelessness, and set out steps to remedy this in an agreed written plan.
4. Local authorities are required to help to secure accommodation for all eligible households who are threatened with homelessness, and at an earlier stage.
5. Local authorities are required to provide those who find themselves homeless with support for a further period of 56 days to help to secure accommodation.
6. Local authorities are able to take action to help to secure accommodation under the new duties to help homeless households.
7. Households in priority need who refuse to co-operate with prevention and/or relief activity will be offered a minimum of a six month private rented sector tenancy. They will not progress to the main homelessness duty. Households not in priority need who refuse to co-operate would be provided with advice and information only.
8. All young people leaving care will be deemed to have a local connection in the area of the local authority that is responsible for providing them with leaving care services under the Children Act 1989.
9. Applications are provided with the right to request a review in relation to the prevention and relief duties.
10. The bill introduces a duty on specified local agencies to refer those either homeless or at risk of being homeless to local authority housing teams.
11. The secretary of state has a power to produce a statutory code of practice to raise the standards of homelessness support services across the country.
12. A local housing authority must satisfy itself that specific requirements are in place where it secures accommodation for vulnerable households in the private rented sector

Having attended Owen Jones excellent lecture on ‘optimism’ over the holiday, I had resolved to view 2017 with more positivity, looking at what is possible in the future rather than what has gone wrong in the past. Sadly, the feeling didn’t last long. I read an article by Kate Davies (the chief executive of Notting Hill Housing Trust for more than a decade) in Inside Housing. On the surface there was little to complain about, mostly I agree with the content. It explains the benefits of social housing, low rents and security, and complains about the lack of grant for new homes. It sets out the serious implications of the shortage of social housing, a common enough theme on Red Brick.
But context is everything. My annoyance at the piece stemmed from knowing Kate’s role, as I see it, in undermining the cause of social housing over the past decade, in two ways. First, she has led an organisation which deliberately decided not to provide as many social rented homes as it could have done – amounting to thousands of homes over the period which could have been used to house people in housing need. Secondly, she was a leading light in the campaigns and lobbying that seriously challenged the existence of social housing as we had known it, policies that were taken up directly by the Coalition and now the Tory Government. In her article, she makes no acknowledgement of her previous views and takes no responsibility for their impact.
Of course, she was not alone. There were many others in UK housing who went down similar paths. People fell over each other to disparage the social housing ‘offer’and to stereotype its occupants. It is the combination of failing to deliver as much social housing as possible, failing to defend genuinely affordable housing from attack, and failing to contradict the media’s demonisation of tenants, that has led me to be so critical of leading figures and institutions, especially in the housing association world. Homeless and badly housed people have been the victims of their loss of commitment and weakness of vision.
I was on the Board of Notting Hill Housing Trust for six years, from 2002-2008, having served on area committees before that and having had connections with the Trust since 1972. It is an organisation that really matters in west London and has transformed thousands of lives. Along with Kate and many others I worked hard, with some success, to improve the performance of a once great organisation that had hit the doldrums. With regard to housing development I am a pragmatist: I supported Notting Hill’s role in promoting shared ownership, and have had a long-held interest in providing homes in the ‘intermediate’ sector as well as for those most in need. As a Board member I supported tentative moves into highly profitable private development because it could be used to cross-subsidise an increase in social rented homes. It was a time when grant for social housing was substantial and the Brown Government had increased the budget considerably.
But the Trust came to be dominated by a philosophy which saw social renting as something to be disparaged, a ‘dead end’ and a route into ‘dependency’, and which also placed home ownership on a pedestal called ‘aspiration’. Provision of social rented homes was downgraded in priority, there were moves into making tenancies conditional (eg on seeking work), whilst more and more effort went into shared ownership and private development. There were skirmishes at the Board over individual schemes where the proposed balance between social rent and shared ownership was weighted in favour of the latter even though the finances of the scheme seemed to allow for more social renting in the mix.
It came to a head in early 2008 when a new 5 year development programme was put before the Board. It was fully costed, certified by the Director of Finance as a credible and viable plan, and it reflected in full the policy of the then mayor, Ken Livingstone, that development should be 50% affordable (35% social rent and 15% intermediate). Having drafted Ken’s housing strategy, I was delighted that NHHT planned to follow the lead. But the proposal was withdrawn by the chief executive and a different strategy was brought to the next Board. The amount of shared ownership was significantly increased and the share of social rent significantly decreased. After a long and difficult Board meeting, where I was an isolated advocate for the first strategy, the revision was passed (as I recall) by 8 votes to 1. The mix in the programme was proposed to shift from (social rent: intermediate) 70:30 to 40:60, much more extreme than even the policy of the incoming mayor Boris Johnson (although still much better than now).
I resigned. In my (July 2008) letter to the Chair, a clever businessman who helped improve the Trust in many other ways, I commented:

I cannot support the Board’s decision to approve the strategic plan proposed by the Corporate Management Team and the underlying attitudes it reflects. The basic premise of the growth strategy is that NHHT should make ‘shed loads of money’ from private development, which can then be applied to meeting housing needs.  But this argument falls if CMT and the Board then decide to provide many fewer social rented homes than could be provided within reasonable business parameters.  Real choices were available in deciding the strategy – and the final decision reflects serious differences of principle.  In short terms, I feel that NHHT is fixated with promoting home ownership and has insufficient commitment to meeting housing need.
Any reasonable analysis of housing need in London shows that the highest priority is for more social rented homes.  Of course other objectives come into play, and I have consistently supported mixed development and intermediate housing options .………  Compared to the first version of the corporate strategy in March (which was also recommended by CMT), the revised strategy would produce 1,500 fewer homes for social rent over 5 years. 

Externally, Kate was often heavily involved in policy development and lobbying. Amongst other things, she was a key advisor to the extremely influential Localis review (Principles for Social Housing Reform) on which Red Brick has commented many times (for example here). She chaired the ‘Housing and Dependency Working Group’ for Duncan Smith’s (misnamed) Centre for Social Justice producing a report – using NHHT resources – on housing poverty in 2008, where she repeated her call for an end to security of tenure and criticised social housing for providing ‘low cost living for life funded from the public purse’.
Of course Kate is fully entitled to hold her own views and to pursue them as she wishes. In many ways she is very good at her job. But the antagonism to social renting affected both what NHHT was doing and what it was saying to Government as a prominent housing provider. For example, in 2006 I managed to get the Board to agree not to submit draft evidence to the John Hills review on the future of social housing because it supported tax relief for first time buyers (without evidence) and because it called for the ending of security of tenure for social tenants and higher rents. My view was that the proposed evidence stigmatised tenants: social housing was described as ‘subsidised’ whilst shared ownership was not; tenants were seen as second-class citizens who needed ‘a springboard back into society’; social housing was a ‘dead end’ where lives ‘stagnate’. Home ownership was seen as the miracle cure for social ills.
It has become fashionable once again for leaders in UK housing to describe in graphic terms the rise in homelessness and the appalling degree of housing need in our country. But the industry has an awful lot to feel ashamed about and failing to defend social rented housing is top of the list. People should be held to account for what they did when the money was available, what they have advocated for as individuals in public debate, and, crucially, how they used the platform and resources provided by their organisations to promote their views. One article does not wipe the slate clean.

By Dermot McKibbin
The 1997 Labour Election manifesto described the leasehold housing tenure as not worthy of the 20^th century. The leasehold form of ownership is feudal in nature.  You pay for a lease and when the lease expires, you revert to a mere tenant unless your lease is extended. It is a wasting asset. If you break the terms of your lease, or fail to pay your ground rent,  the freeholder can apply to court for forfeiture of your lease.
Former commonwealth countries such as America and Australia have a communal form of ownership to deal with flats in blocks. Scotland has abolished ground rent.
The 2002 Commonhold and Leasehold Reform Act sought to replace the leasehold tenure with a system of Commonhold. The freeholder interest would be replaced by a Commonhold system of ownership whereby all flat dwellers owned a share of the freehold. The residents could decide how to run the building themselves instead of the freeholder.
Unfortunately the Commonhold system failed. It was only voluntary for new build schemes. For existing leaseholders they would have to obtain the agreement of all other leaseholders in their block to transfer to the Commonhold system. This proved impossible to achieve.
Since the Act became law there has been a large increase in the number of applications to the first tier property tribunal to determine the lawfulness of service charges. The number of applications to the property tribunal has gone up by 400% in 10 years. Unfortunately these  tribunals are now too legalistic. Freeholders have deep pockets to pay lawyers who run rings round the average leaseholder.
In August 2014 the Coalition  Government published an important technical study into how many leaseholders there were in England. This showed that the number of dwellings owned by leaseholders was 4.1 million. This was much higher than the previous figure of 2.5 millions leaseholder households.
Whether Labour likes it or not the number of housing association  leaseholders is likely to increase. Indeed over 40 % of all newly built properties in England are leasehold. In London the comparable figure is over 60%.
The English Housing Survey 2013-14 revealed  7.4 million households who owned outright, 6.9 million households who had a mortgage, 4.9 million private rented households and 3.9 million households who rented either from a local authority or a housing association. Labour cannot ignore the votes of owner-occupied households.
Apart from the Labour commissioned Redfern Review into the decline of home-ownership, there has been little debate within the Party about the housing problems of the dominant tenure such as mortgage repossessions, how to deal with disrepair problems or the fact that under universal credit unemployed home owners will have to wait 9 months before they receive any state help to pay their mortgage.
There has been research into the amount of unlawful service charges  or detriment that exists in the leasehold housing market.  A 2011 Which survey estimated the annual detriment to be £700 million. This was based on the number of leaseholders being 1.8 million leaseholders.
In December 2014 the Competition and Markets Authority published a much criticised study of the residential property market.  No mention was made of the strict forfeiture rules or of the Law Commission’s proposals to abolish these rules. The  supreme court decision that seriously undermined the legal rules about how a freeholder consults with leaseholders was not mentioned. There was no review into how successful the 2002 Act had been.
The report did cautiously estimate that the  annual detriment could range  between £34 million and £98 million a year. It is likely that the actual figure is considerably higher.
The study concluded that there was little need for statutory regulation. Most problems could be resolved by voluntary measures. Unsurprisingly the Tories endorsed this approach.
The Guardian has recently exposed how volume builders such as Taylor Wimpey are making money out of the building  and selling of leasehold houses. The freehold is sold to developers who have the right to increase the ground rent by 200% every 10 years. This makes the property virtually unsellable.
This practice has been condemned by John Healey MP the Shadow Housing spokesperson. Unfortunately there is no evidence that the Party as a whole is aware of the need for leasehold reform. Labour cannot afford to ignore the plight of the growing number of leaseholders.
Many freeholders such as the Duke of Westminster have close links to the Conservative Party. Labour needs to develop a clear position on leasehold reform and to expose the links between freeholders and their political allies if they wish to win the political support of leaseholders at the next election.
Dermot Mckibbin is a retired housing lawyer who until recently worked for Greenwich Housing Rights. He is interested in leasehold reform.

It is hard to imagine a housebuilding policy that could be more extreme than the position reached by David Cameron and George Osborne last year. Having virtually ended new programmes of social rented homes, in favour of the so-called ‘affordable rent’ programme, they went one step further and pulled the plug on AR in favour of total reliance on subsidised home ownership products. The Government was only going to offer help to those who already had incomes that brought them within touching distance of home ownership. The rest could go hang.
Theresa May and Philip Hammond have rowed back from this position a little way. Quite how far is still unclear. The headline extra money that Hammond announced in the Autumn Statement sounds less impressive when you realise it covers a five year programme from 2016-2021. They will spend in half a decade what some might think is a reasonable programme for a single year.
It is good news that there will be more money for grant for new homes. The penny has dropped that a policy based on subsidising and supporting demand for home ownership is bound to fail in the medium term because the subsidy will feed into price increases unless there is a corresponding increase in supply, thereby defeating the original purpose. Subsidising supply is a much better thing to do. More grant will enable a bigger share of each development to be ‘affordable’ and, depending on the policies of the funder and the delivery body, should also ensure that some of the programme is for social rent. More grant makes negotiating s106 planning gain agreements easier.
It is also good news that there will be more money available for infrastructure to support housebuilding. Inadequate infrastructure has been a big barrier to many developments. However, there is still a lot to play for in operational terms to make the money work hard. Public funding of more infrastructure should mean more development is viable, producing more homes and more affordable homes, but, if not managed well, it could just feed into developer profits by reducing their costs. There is also a risk that it becomes another way of paying for roads. Programme management and effective negotiation will be key to getting the best possible social return.
It is also good news that the Government is now willing to see the grant that is available go into a wider range of forms of tenure – although the Treasury documents only talk about ‘affordable rent’ (ie rents at up to 80% of market rents) despite the Government’s talk of having policies that work for everybody. The extra money does not yet mean there will be  a new stream of social rented homes.
Strategic funding bodies – the London Mayor and the Homes and Communities Agency in the rest of England – will be encouraged to help people who fall into Theresa May’s  definition of ‘Just About Managing’, whatever that is. But a genuinely inclusive policy would also be aimed at those who are ‘Just About Sinking’. At this point a slightly less regressive housing investment policy comes face to face with a regressive benefits policy. Despite a small amount of amelioration, the impact of the new benefit cap and the general squeeze on benefits has not yet been felt. There are dire expectations that these changes, matched with a growing lack of access to private renting for people on benefits, will lead to a surge in homelessness over the next period. Measured against such need, the extra money begins to look very modest indeed.
The news has been well received in London, which will get the lion’s share of the new cash for investment. Sadiq Khan and his housing deputy mayor, James Murray, have played blinders so far, getting the balance right between shouting from the rooftops about London’s needs, winning the argument that housing is the biggest barrier to economic growth in the capital, negotiating stealthily with Ministers who are more open-minded than their predecessors, convincing them that they can help deliver Government priorities as well as promoting their own. Khan is now in a strong position: he controls the funding pot, can set the terms of trade, and is refining the planning requirements. Housing associations and developers are already beginning to go with the grain of his policies, just as they did with Ken Livingstone, and, miserably, just as they did with Boris Johnson. I think the new administration is genuinely committed to getting a social rent programme moving again. The extra cash oils all the wheels of their policy.
Outside London the response of the HCA to the new flexibility is harder to predict, and I have yet to see a response from them. In some places new combined authorities and, next year, the Metro mayors will have a much bigger say in what happens. Elected authorities should seek movement away from the priorities set out in the current Shared Ownership and Affordable Homes programme 2016-2021 – which was described by the HCA itself as ‘a decisive shift towards support for home ownership’. As the HCA is due to announce initial allocations under the programme shortly, effective intervention from local areas is needed now.
Together with decisions like dropping ‘pay to stay’, the deferment at least of forced sales of council high value homes, and action on letting agents’ fees, Gavin Barwell has made a strong departure from the policies of Cameron and Osborne. Yet the Office for Budget Responsibility raises doubt that the balance of new policies will increase housebuilding, predicting a reduction not an increase in housing association output.
So, should we welcome the new direction in policy? Well, that’s a big word. My feeling is that it is rather like going 10 rounds with Anthony Joshua. You would welcome the fact that he has stopped hitting you so hard. You also know that the pain is going to endure, but there is genuine relief that things might be less bad than they could have been.
It’s a victory for all those who have campaigned against the extremes of Government policy, but I can only give it one (stifled) cheer.
The response of SHOUT the campaign for social housing can be found here.

The latest housebuilding figures, and especially the disastrously low figures for affordable homes and the virtual disappearance of new homes for social rent, have refocused attention on housebuilding.
In the run up to the Autumn Statement there has been some speculation that there will be a new Government housing initiative. Whether this will just be another doomed attempt to rejuvenate home ownership or something likely to be more effective, we will just have to wait and see.
One indicator that housebuilding really has risen high up the political agenda is the number of reports being issued by think tanks and others of all political persuasions. Thinking about and making recommendations about housing is in overdrive, and it is hard to keep up. So I thought I’d draw attention to a few reports I’ve looked at recently. (My apologies to those I have missed).
The Respublica think tank reported on ways in which the Government could finance the huge number of homes that the country needs. Its report, Going to Scale, proposes setting up a long-term National Housing Fund which would deliver 75,000 homes a year ‘and get the housing market to work for the many’ by dealing with the ‘fundamental problems of number, pace and scale’. The NHF would be a fully returnable £100 billion investment over 10 years with Government acting as a guaranteed buyer of new homes built by housing associations and small and medium sized builders, building up their capacity at the same time and reducing dependence on a few volume housebuilders. The report is critical of schemes to help people buy homes if there is insufficient action on the supply side to ensure the availability of new homes on the market. The homes would be let to economically active tenants who aspire to buy at a later date. Homes could be subsidised and targeted to specific groups such as key public sector workers. The scale would mean low borrowing costs and give builders the confidence to develop many more sites and faster. The report however has nothing to offer those on lower incomes who will never be able to buy.
An even more surprising report comes from Localis, much panned in these pages over the years for their sadly influential report calling for the end of social housing. Power Behind the Home makes the case for devolution as the key to building more homes, giving local authorities greater flexibility around finance and land. Their theory is that there isn’t one housing market in crisis but ‘hundreds in need of correction’, with each area needing a different prescription. After consulting key local government stakeholders, the report says that a better national housing strategy is still needed but it should set the political direction and be permissive in nature. For local authorities, the report proposes the lifting of the HRA debt cap, the setting up of combined authorities’ housing companies, the full retention of right to buy receipts locally and restrictions on the letting out of RTB properties, the levying of council tax on empty development sites, and ‘powers to freeze land values where there is a mayoral development corporation.
Also on the theme of devolution, the IPPR North think tank’s new report also calls for radical new powers to be devolved to new regional city mayors. Closer to Home sets out the challenges faced by the new metro mayors due to be elected in 2017, also using the argument that there is not one housing market, but many. It says the approach to devolution has been piecemeal and partial so far, with greater central control due to the National Planning Framework, Homes and Communities Agency conditions and prescriptive policies like Starter Homes and Right to Buy. In some areas it believes mayors should be able to determine issues such as building on green belts, the local retention of stamp duty receipts, and the release of public sector land, receive direct capital grant funding in return for raised housing targets, and have greater control over planning frameworks to co-ordinate housing and infrastructure.
Over towards the Labour Party, the report of the Redfern Review, commissioned by Labour’s Shadow Housing Minister John Healey MP, looks in detail at the reasons for the decline in home ownership over the past decade. The report says that home ownership has dropped from 71% to 64% since 2003 but for people aged 25-34 it has dropped from 59% to 37% – a huge drop. It accepts that house price growth is one contributor to this decline but not the biggest – which it says is the decline in access to mortgages (due to static or falling incomes as well as credit restrictions) especially since the financial crisis. It concludes that additional housing supply alone is unlikely to shift the homeownership rate in the near future because of the rate of household formation. Politically, the report calls for a long-term cross party non-partisan approach to housing that focuses on all tenures to create a fair market for all, with the establishment of an independent Housing Commission to own the national strategy. ‘What is needed is decades of consistent supply improvements, in both quantum and particularly location….  Longer term thinking and cross-party co-operation is needed so developers can safely invest in larger projects and in infrastructure.’
A new report from the Centre for Regional Economic and Social Research at Sheffield Hallam University by Tom Archer and Ian Cole takes a more critical look at the volume housebuilders. Profits before Volume points out that their performance over the last few years has seen a sharp increase in their level of profits and a much more modest increase in their output. Reasonably they point out that the business model applied by these developers over the past few years has escaped much scrutiny compared to the endless analysis of the faults of the planning system and other factors. These firms guard against volatility by controlling the release of land from their landbanks, which strengthens their negotiating position on individual sites. Consolidation in the sector has reduced the number of small and medium sized companies, putting the big companies in an even stronger position. Their strategies are understandable in that they are still working through the implications of the 2008 crash and especially by rewarding shareholders who were deprived of dividends then. Their conclusion is that these large builders are likely to continue to fail increase output to help supply meet demand.
I suspect that the sensible conclusion looking at all of these reports and others is that there is no single silver bullet but a wide range of new policies and funding are needed to make a difference. The common thread through all of the reports is the need for long-term thinking and the need to create long-term confidence that development will be supported in a variety of ways.

However, given that the worst housing performance since 2010 has been the number of genuinely affordable homes (see chart sourced from Neal Hudson @resi_analyst on Twitter) I would also like a much stronger focus on the policies that will deliver decent homes to people on the lowest incomes who will depend on rented homes for as far ahead as anyone can see. In a month which has seen a resurgence in interest in the rising crisis of homelessness, the policies we need are not just those that will build more homes generally but those that will build homes which are genuinely affordable to everyone on the income distribution.

BY Dermot Mckibbin, Beckenham CLP*

This review was commissioned by the John Healey MP Shadow Secretary of State for Housing though is independent of the Labour Party. Peter Redfern, the Chief  Executive for Taylor Wimpey chaired the review. (click here Redfern Review for more details)
The review reflects John Healey’s  determination to put widening the opportunities for home ownership at the heart of Labour’s approach to housing. It is a signifiant development in the Labour Party’s housing policy for a tenure group that it is often ignored by the Left.
The review takes the view that the fall of home-ownership in England from 71% to 60% frustrates the legitimate desire of most people to own their own home. There have been too many short term initiatives in housing policy. Solutions seeking to improve home ownership without considering the impact on other tenures will be unsuccessful.
The reason for this decline are  several. Real house prices rose by 151% from the end of 1996 to the end of 2006, while real earnings have risen only about a quarter as much as that. The growth of buy to let mortgages and the global economic crisis have also contributed.
The review does not adequately address whether subsidising demand for house buyers is inflationary. Page 15 claims their studies show that 1% increase in the number of dwellings would reduce house prices by 1%. However on page 49 the review concedes that a 1% increase in housing stock lowers housing prices by 1.8%. This inconsistency is not adequately explained.
Student loans and tuition fees have hindered young people from saving enough to pay for a deposit. The number of 25-34 year olds living at home with their parents has increased by 1 million between 1997 to 2015. No consideration is given as to how this group would benefit from rent controls in the private rented sector.
The solution is decades of consistent improved supply. This can only on be achieved by a political consensus between all major political parties. The Help to Buy Equity Loan Scheme even though it is inflationary needs to be retained and better targeted especially towards young people. Under this scheme the Government lends buyers  up to 20% of the cost of a newly built home. Buyers only need a 5% cash deposit and a 75% mortgage to make up the rest. This scheme is very beneficial for builders.
The right to buy ‘one for one’ replacement policy should be extended so that all council homes sold should be replaced and not just some. Housing  policy making would be improved by the setting up of an independent Housing Commission similar to the Infrastructure Commission.
The review concedes that Help to Buy: Equity Loan will inflate house prices to the extent that it does not create incremental supply. According to a 2016  government evaluation study, this means that for every 100 homes built through the support of these equity loans, 57 would have been built anyway. The evaluation study and not the review itself mentions that this scheme is funded to the tune of £9.7 billion until 2020 and is expected to cover up to 194,000 new home buyers. The review does not question whether this  amount of public subsidy is fair.
Ideas to support existing home owners to remain in their homes were apparently outside the scope of the review.  These are:

• Unemployed home owners only receive state help with their housing costs for 12 months.
• Giving low income home owners greater help to improve their properties.
• Greater legal rights when lenders take possession proceedings against home owners.

No mention is made about the problems faced by leaseholders as covered by the Guardian in a series of articles recently. Taylor Wimpey and others have been criticised  for their policy of building leasehold houses and then selling on the freehold. The lease contained a clause that doubled the ground rent every 10 years. According to the owners their house is now unsaleable.
Research by the Coalition Government has found out that there are more leaseholders than previously thought in England and Wales. The figure is up from 2 million to over 4 million. London alone has two thirds of all leaseholders in England and Wales. Over 60% of all newly built properties are flats. Any proposals to improve the  rate of home ownership needs to address this widely ignored research.
The Redfern Review will hopefully start a much needed debate within the Labour Party about owner occupation and the leasehold housing market. There needs to be much a much wider debate about whether the Help to buy: Equity Loan scheme represents value for money.
 
*Dermot Mckibbin is a retired housing lawyer who until recently worked for Greenwich Housing Rights. He is interested in leasehold reform.
 
 

The film Cathy Come Home, directed by Ken Loach and written by Jeremy Sandford, can be seen in full here. It is highly recommended if you have never seen it. The credits track was ‘500 miles from my home’ by Sonny & Cher, hence the title of this piece.
I would also like to draw attention to another blog remembering Cathy, by Tom Murtha on Inside Housing, which can be found here. Inside Housing has launched a campaign to mark this week’s 50^th anniversary of the landmark film – campaign logo below and more information here.  It is also carrying an interview with the Director on his feelings about what has happened since he made Cathy. (IH’s Cathy anniversary stories are free to read and not behind the paywall).

Much to their credit, a group of housing associations has also been organising ‘Homes for Cathy’ events and activities around the anniversary. Many associations were founded at this time as concern for the homeless grew, one being Shepherds Bush HA, who held an anniversary event this week.

More links and reflections can be found by using the hashtags #CathyComeHome and #Cathyat50

Below are my thoughts.
50 years ago today the BBC screened ‘Cathy Come Home’ as one of its series of Wednesday Plays.
I remember it as if it was yesterday. I was 16 and I have more memories of 1966 than of any other year of my childhood or youth – the World Cup, ‘O’ Levels, Aberfan, the escalation in Vietnam, the first General Election I paid attention to, the Moors murder trial, the Rhodesia crisis, Revolver by the Beatles (Dylan’s Blonde on Blonde was also released but I wasn’t aware of it at the time). And Cathy……..

I have seen the film dozens of times (it was a regular feature when I used to give talks while working for Shelter in the 1980s) but it is hard to explain the impact the first showing had. Years later it was voted the ‘best single television drama’ and ‘the UK’s most influential TV programme of all time’. Twelve million people watched it that first night, about a quarter of the population. No-one had ever seen anything like it, it was so realistic. And genuinely shocking. It felt like everyone had watched that Wednesday Play, and everyone talked about it the next day. No single TV programme could have that kind of impact today, with hundreds of channels and many other distractions.
My Dad was a plasterer, in work nearly all the time, my Mam a part-time cleaner, and we could hardly be described as well off. We lived in a council house – a Bevan house – on the large Montagu estate near what was then the northern city boundary of Newcastle. The house was of an amazingly high standard, front and back gardens that were my Dad’s pride and joy, and at the top of the road the Kenton Bar was the last building before open countryside stretching all the way to Cheviot. It could be tough but it was a great place to grow up. Until I saw the film it was unimaginable to me that people like Cathy could exist or that stories like hers were possible. All she ever needed was the one thing we had – an affordable council house, a secure and comfortable base on which to build a life.
There was little public consciousness of homelessness prior to the film, and the revelation that homelessness could lead to children being taken away from their family was shocking. It is so shaming that the number of homeless people is vastly bigger now. Ken Loach’s latest film, ‘I, Daniel Blake’, is also having a serious impact and shows how little some things have changed. Its theme has echoes of Cathy. The circumstances are different, but the core story is the same: a decline from a contented and stable life into poverty, caused by ill health (Daniel’s heart attack and Reg’s accident at work), the experience of state institutions that punish rather than support, ending in destitution and total break-down.
I met Ken Loach when I worked at Shelter in the 1980s, I think introduced by Des Wilson, the founding Shelter Director. I tried to interest him in doing another film on housing and showed him around the sights of Paddington, the dozens of bed and brekfast hotels housing homeless families in Bayswater, the huge and squalid multi-occupation terraces of Sutherland Avenue and the rapidly deteriorating Mozart Estate, then only 10 years old but already neglected by Westminster Council. He didn’t bite but proved to be both charming and quite hostile to the very idea of soggy liberal housing charities (something that made more sense as his own political position became better known). There ended my career as the second Jeremy Sandford.
50 years since Cathy means that the 50^th anniversary of Shelter is imminent. The two were widely assumed to be linked but in fact it was just a remarkable coincidence that Shelter was launched a few days after the film was shown. It still gave Shelter huge impetus. Now a large organisation providing vital advice services, it seems to have lost some of its campaigning edge and punches below its weight in terms of influencing public attitudes and Government policy.
Cathy was the start of my political awakening, an event in my teens only matched by reading Robert Tressell’s ‘The Ragged-Trousered Philanthropists’ and being exposed to ‘ideas’ at University that converted my working class chip into a vague leftish philosophy. I have suffered periods of optimism since – 1974 especially, and 1997. But the 50^th anniversary of Cathy, the resurgence of homelessness matched by the apparent indifference of much of UK Housing, Labour’s divisions and ineffectuality, all in the context of a global resurgence in nationalism and intolerance, make me feel that I have been deluded for fifty years in thinking that, as day follows night, each generation will do better than the last.

A surprising degree of consensus has broken out in support of the Homelessness Reduction Bill, a private members Bill due to be debated in the House of Commons tomorrow (Friday), with backing now being given by both the Government and by the Opposition as well as the Local Government Association (whose members will have to implement it) and the charitable homelessness sector, primarily Crisis, which is in enthusiastic support. The Bill will need to get the backing of 100 MPs in a division tomorrow to be able to pass the first substantive stage and then go into Committee for more detailed scrutiny.
The version of the Bill to be debated tomorrow (it has already been amended from the original version after negotiations with the LGA and scrutiny by the CLG Select Committee) can be found on the House of Commons Library site here and the Library has also done an exceptional (as usual) Briefing Paper for those interested in the detail, which can be found here.  There is a summary and a full briefing, covering not only the Bill but the current legislative framework and the various measures of homelessness. You can also sign up to regular Library bulletins on the Bill if it progresses to further Parliamentary stages. The scrutiny report by the CLG Select Committee is also of interest and can be found here. All of this background activity suggests that there is an expectation that the Bill might go the distance.
The Bill seeks to bring into English practice something similar to the system developed in Wales which is widely deemed to have been successful in reducing homelessness by providing early intervention and support and proper advice and assistance to all homeless people not just those deemed to be in priority need. Bob Blackman MP, the Tory sponsor, has said he wants the English system to do more to prevent homelessness in addition to being a safety net (one with large holes these days I have to say). He believes councils do not engage early enough when people are threatened with homelessness, especially from a private tenancy, single people are often turned away without advice, and there is too much variation in council practice.
Of course any improvement in the provision of services and enhancement of the rights of people threatened with homelessness is to be welcomed. My purpose here is to make a few more general comments.
First, the system introduced in Wales was carefully developed after detailed research and in close consultation between the Welsh Government and local councils – a method they call coproduction – and it has been regarded as being a success in its first year of operation, providing advice to a wider range of people and preventing homelessness actually occurring for many. Sensibly, there is close monitoring of the outcomes so the Welsh Government is in a good position to assess progress. Given the budget cuts imposed on Wales it is an outstanding piece of cooperative governance. However, the pressures in Wales, great through they are, are not as overwhelming as those in some parts of England and especially in London. It is good news that the LGA has considered the Bill in detail before agreeing to support it with a few amendments, but it will still be hard for some councils to respond in the way intended.
Secondly, there are doubts about some of the detailed content of the Bill which should be borne in mind if it goes into Committee. Those interested in the legal detail – how the Bill might operate and its impact on the existing legislation – are advised to follow Giles Peaker’s contributions on the Nearly Legal blog. After consideration, Giles also supports the Bill’s second reading, saying: ‘Overall, taken as a whole, the Bill is a positive step and my view is that second reading should be strongly supported. But there are some serious issues and drafting points that need to be addressed in committee and subsequent stages.’
Third, my cautionary tale. I was closely involved with Shelter during the implementation of the 2002 Homelessness Act. This introduced mandatory homelessness reviews and each council was obliged to put in place a homelessness strategy. There were positive changes to the priority need categories. In parallel, Government adopted a target to reduce the number of households in temporary accommodation by half (which was achieved a few years later). It all seemed so positive. Sadly the emphasis in strategies on the prevention of homelessness, combined with strong Government moves towards meeting the TA target, had some perverse outcomes. In particular, the desire to increase prevention led to the introduction of ‘housing options’ services which too often spilled over into stronger gatekeeping, as we have reported on Red Brick before. Use of TA came down (until the Tories took over in 2010) but it seemed this was often at the expense of homeless people who were turned away rather than an improvement. Similarly, councils have been under an advice and assistance duty in relation to single homeless people before, but with only limited results.
Fourth, the title ‘Homelessness Reduction’ is a total misnomer and gives a false flavour of what is happening in the housing world. Councils, especially in the highest demand areas, are struggling to find even temporary accommodation at present and the supply of genuinely affordable permanent accommodation will continue to fall as a result of Government policy. Councils have faced massive cuts to budgets and most have struggled to maintain any kind of advice service. The impact of many of the social security changes, especially the new benefit cap, has yet to be felt and there is likely to be a significant rise in homelessness as a result.
Homelessness can only sensibly be seen in the wider context of housing supply and poverty. None of the relevant policies and none of the indicators are going in the right direction. I hope this Bill will provide more support for individuals facing the trauma of threatened homelessness and will help many of them to postpone homelessness or obtain other accommodation: if it does, it is worth supporting just for that. But let no-one be in any doubt that homelessness is going to get worse not better. Cathy will not be coming home any time soon.

Dave Hill is an award-winning (and deservedly so) commentator on London and I’ve never had much cause to take issue with him. But on the issue of regeneration/gentrification (they are not the same but let that pass for now) he takes a line that is a deliberate challenge to the developing orthodoxy. As someone who can’t avoid the charge of being a metropolitan leftie – although I’m not sure it’s an insult – it is important to take his commentary seriously.
Dave’s latest blog for the Guardian – Let’s get our gentrification story straight – sets out his argument. I would summarise it as this:
Gentrification is now getting blamed for destroying London’s soul. Pejoratively, it characterises demographic change as colonisation by the rich and the pushing out of the working class. Reaction to it has created a political battlefield across the capital. There are genuine anxieties but the analysis of it is not as solid or righteous as it seems. It has been going on for decades. It is the product of (Inner) London’s revitalisation after the era of decline and falling population. Ordinary people have always migrated to the suburbs and continue to do so. Growth and the failure to meet housing demand cause competition for space. Yet there are still high levels of social housing in the most gentrified boroughs, like Islington. Poverty rates are still high. There are also benefits: like middle class pressure for better schools. It is not a simple battle between communities and gentrifiers. Urban neighbourhoods are constantly changing. He quotes the Centre for Cities who say it is a ‘myth that creative incomers are to blame’ and the true root of the problem is ‘poor city management’. Dave concludes by saying we need a constructive practical flexible political response ‘that helps to shape urban change to best and most equitable effect’.
I hope I’ve done his argument justice in one paragraph. But the point of this is that I absolutely agree with the last two sentences – I would also agree it is the product of revitalisation – but I would get there through a different logic. Location and city growth theory would predict that something like this would happen in a free market. A rich centre, spreading outwards, surrounded by a poorer ring with more affluent suburbs beyond. Over the last thirty years, London’s poorer ring has moved out organically. It appears to me that parts of what used to be Outer London now resemble what Inner London used to be like. Market responses are leading to large family houses being divided up into a lot of small (and profitable) flats and sharing of existing accommodation (sometimes to the point of overcrowding) is becoming more common. When I first moved to north Paddington in the 1970s the area was a mix of private renting and cheap home ownership, housing mainly working class English, Irish and West Indian families. Physical conditions were pretty awful. This population has now gone – I assume by moving out to Harlesden,  Willesden, Cricklewood and beyond – it is now a cosmopolitan area where houses have been converted to flats occupied mainly by professional people of all nationalities, but with private renting winning the battle against home ownership over the last decade. It has not yet reached the point of neighbouring Notting Hill or Queens Park where even middle class professionals can’t compete.
So a growing city produces organic but often predictable market change. It is the outcome of millions of individual decisions, most of them quite rational given the circumstances of the individuals concerned. But there is another factor: it is not a free market for space, it is a regulated market. Government, national and local, sets a framework of planning policy, housing regulation, subsidy and tax. To do so, it must have objectives in mind. Ken Livingstone’s objectives as mayor were totally different from Boris Johnson’s. Market-driven change can be facilitated through laissez-faire policies or channelled through policies designed to protect good features of London (like, I would argue, mixed communities) and to provide housing to those who cannot compete in the market (through, for example, social housing).
Two of the most important public policies that have affected London concern Government attitudes to tenure. First, the deregulation of private renting and the encouragement of ‘buy to let’ which has become such a big force in London, to the point where it is displacing home ownership. And secondly, the failure to provide enough additional homes of all kinds but especially those designed to meet the needs of people on lower incomes, now compounded by active policies to reduce the number of social rented homes.
These were political choices: other choices were available, the outcome could have been very different, and the City could have been shaped to better preserve the rich tapestry of mixed communities which most people see as one of London’s greatest attributes.
In the 1970s and 1980s the struggle against ‘gentrification’ focused on private landlords and estate agents who were ‘winkling’ tenants out (infamously, Prebbles in Islington which led to a bitter campaign). Now, there are big issues in the private sector like the impact of the housing benefit caps, and rents that are generally unaffordable, but most areas of predominantly private housing in Inner London have already seen transformative change.
Most of the protests that are taking place concern plans to redevelop existing council estates which find themselves sitting on very valuable land which could be more intensively and profitably used, but often at the expense of the existing residents. It’s hard without researching each development to be precise about the rights and wrongs, but the London Assembly Housing Committee last year looked at 50 council estates that had been ‘regenerated’ in the previous decade, bringing some transparency to the debate for the first time. In total, some 67,000 homes had been proposed to replace 34,000 but there was huge tenure shift. The increase was largely in market homes with some ‘intermediate’ but there was a large loss of homes for social rent – down from 30,000 to 22,000.
These regeneration schemes were having clear redistributional impacts. The 8,000+ lost social rent dwellings alone could have provided homes for one in six of the households forced to live in temporary accommodation in London (often a long way outside London) in 2015 – not an answer to the housing crisis but a damn good start. The Committee made a number of important recommendations, many of which will form the basis of the revamped policy on regeneration being adopted by Sadiq Khan.
So, City Government has failed. The policy framework facilitated rapid organic market change that benefited some people at the expense of others and produced outcomes that simultaneously enriched London life (revitalisation) and impoverished it (loss of traditional mixed communities and homes for people on lower incomes). So I agree with Dave – it needs a constructive flexible response to shape these changes. But we need to have clear objectives. It’s not about blaming incomers, it’s about adopting public policies that protect the poorest from paying the price.