Author: Tony Clements

I’ve just read a measured and eloquent piece which demolishes the government’s claims for housing and welfare reform – a piece worthy of Red Brick – courtesy of Eric Pickles.
A formal letter from Eric Pickles’ Office to the Prime Minister details the range of problems with the government’s housing and welfare policies that casual readers will be well aware of:

• Increases in homelessness
• Increases in public spending to deal with homelessness
• Fewer homes being built, especially family homes
• The disproportionate impact in the south and on children

All the issues which ministers have denied point blank will be a problem. They have constantly claimed that criticisms of their housing policy are overblown, extreme or just untruthful. They have exhorted us to trust them, because they have thought through the impacts and have been satisfied that the effects won’t be as bad as everyone is saying.
How about this from Grant Shapps:

“People like me – who set up a homelessness foundation, worked with all the homeless charities, authored probably six of seven homelessness papers – don’t make changes without thinking through the impact of them on the homeless”

And true to his word, he (and Eric Pickles) had done a lot of detailed work to show the impact of their policies on homelessness. As Eric’s letter to the PM says:

“Our modelling indicates that we could see an additional 20,000 homelessness acceptances as a result of the total benefit cap. This on top of the of the 20,000 additional acceptances already anticipated as a result of other changes to Housing Benefit. We are already seeing increased pressures on homelessness services. … It is important not to underestimate the level of controversy that this would generate (likely to dwarf anything already seen on the HB only caps) and the difficulty of justifying this in policy terms as well as implementation.”

They know the impact of their policies, but they just don’t care. It is a price worth paying. Even after this letter  had come to light, we hear from Eric that “We are fully supportive of all the government’s policies on benefits.”
I believe him. They support the policies and they support the effects of those policies. The retoxification of the Tories continues apace.

If top down targets ‘indisputably failed’ according to the housing minister what can we say about the emerging alternative?
More and more small local stories are coming out which show that for many councils local freedom means the freedom not to provide homes for their residents, especially those on lower incomes (as many predicted).  
Take this from the Basingstoke Gazette:

At a meeting of councillors last week, the ruling Tories called on officers to explore the “lowest possible” annual housing target after residents said too many new homes are built every year.

 And Windsor and Maidenhead Conservatives are brazen in saying they want no social rented homes. Their election manifesto tells us they will:

 “Only support shared equity and staircased home ownership options for affordable housing delivery”.

 To give them their due, the Royal Borough does claim the construction of 157 shared ownership homes since 2007. Red Brick can only caution them that if such largess continues they should prepare for the stampede of first-time buyers heading their way.
A clear picture is emerging of a patchwork of local policies which add up in total to very few homes being built, especially for those on lower incomes.
 
I’m all for localism as it happens and believe we should live in a country where communities have greater local freedom to make their own decisions. I would echo Sam Elliot at the excellent ‘Unnecessary Role’ blog when he says:

“If we are an egalitarian party then not only are we fighting for equality of opportunity but we’re also fighting for equality of power (it says so on the back of the membership card). Isn’t part of that making sure that all communities have the ability to make decisions about their local area?”

 But, to offer a hackneyed quote from an almost as insightful figure (Spiderman):

 “With great power comes great responsibility”

We must oppose a localism which excludes the absolute responsibility to provide enough homes and enough affordable homes for your residents. The coalition’s localism is an invitation to do just that, leaving other areas to carry the burden.

Rarely have I been less impressed by a minister than when I saw Lord Freud speak last week at the Chartered Institute of Housing Conference. It was a virtuoso performance of refusing to engage with any of the issues, however reasonably raised, all to the end of irritating a room full of people. He’d have been as well to stay in Whitehall.
He did however (accidentally I’m sure) stray into making a couple of relevant comments. We have constantly heard from Shapps et al that everyone is being ridiculous saying that the poor will be pushed out of expensive parts of London. Lord Freud took a different tack when questioned. London is a city of commuters he told us. It’s highly inter-connected. You can get around easily and cheaply. A bus fare is only £1.30 and – by the way – he often gets the bus. The average London commute is 68 minutes. Why should people in social housing get special privileges to be able to live next to their jobs?
In making this argument he acknowledges that the government is fully aware that people will stop being able to afford to live in large parts of London. It’ll be a price worth paying to get the benefit bill down and what we heard from Lord Freud was their rationalisation for why that was OK.
Second thing of interest was the staggeringly disingenuous argument that the welfare reforms were being driven by the need to support people into work, and not the reduction of the benefit bill. Frankly, it’s insulting people’s intelligence to tell them the removal of £18bn in a side effect of helping people into work.
He told the audience that the reason for reducing people’s benefit in the private rented sector is to put people in cheaper homes and keep people out of the benefits trap. He correctly said that benefits allowed people to afford very high rents which meant that some families never had a realistic chance of earning enough to pay their rent without housing benefit.
What is remarkable about this argument is they are duplicating exactly this problem through the ‘affordable rent’ model. They are raising rents in social housing to near-market levels where workless and low earning families are unlikely to ever earn enough to pay the rents without benefit. Ministerial double-think at its worst.
As I’ve said frequently on this blog and elsewhere –rent that people can afford from their own means supports aspiration and employment. Low rents keep people out of the benefits system and means they keep any extra money they earn – from overtime, promotions or someone else in the house getting a job.
The fact that the Tories don’t recognise this is the giveaway that it’s cuts and adherence to the market that drives their approach – regardless of the consequences on employment.

I liked Ed Miliband’s speech today. Responsibility, reward for contributing to society, reciprocity and ‘doing your bit’ have always been part of the Labour tradition and it’s good to hear the Labour leader putting it to the fore. For too long it’s been territory we surrendered too easily to the Tories. A
nd, it’s right for Ed to draw the dividing line between us and the Tories: Labour believes everyone has responsibilities, at the top and the bottom. The Tories however care a lot about benefit cheats, but have little to say on the spiralling pay of Britain’s wealth-wrecking bankers and chief executives.
His decision to draw on housing as an example was good too. If we are to maintain the legitimacy of public housing, it needs to be a more universal good – available to support working people on a range of incomes. If it becomes housing of the last resort and for the poorest only, the political argument to sustain it becomes ever harder.
It’s the same argument for the Labour Party really: at the last election, as Ed says, we became seen as the party for those on benefits and out of work – the social housing position on the political landscape. It’s hard to sustain a political party on that basis. For legitimacy, you have to make a universal offer that the majority can buy into – the NHS position on the political landscape.
Ed’s argument would see Labour move away from a position which privileged need as the main factor in getting social housing to a system where people’s contributions through work, caring, responsible behaviour were recognised in getting public help with your housing.
As readers of this blog will know – this isn’t a problem free, ‘motherhood and apple pie’ policy – it has tough consequences. There is only so much housing and the more you allocate on a contributory principle, the less there is for those in need, for whom alternative provision will need to be made.
However, I think that passes the public’s fairness test and provides a future Labour government with a strong foundation to invest in social housing and make the case for why.
The choice isn’t between social housing for the working versus social housing for the poorest, but social housing as a more universal offer, or no social housing for anyone.

I still have loads of junk in my Mum’s house. It fills the shed in large boxes and tumbles out of less used cupboards. And it seems I’m not alone. According to the Telegraph:

“Now the younger generation – not wanting to mess up their own, often small, living space – are increasingly relying on the old family home to store their share.”

In my case, I’d have to say that the remaining junk is due to my own lack of organisation and a case of ‘out of sight, out of mind’.
But this amusing life-style story (planted as insurance company PR by the looks of it), reflects a reality about housing for the younger generation:
Far more people find themselves renting and sharing with friends for longer than in the past -because buying’s impossible, there’s little chance of social housing and the cost of private rents means several people sharing is the only option. And, as the article suggests, the homes younger people are renting or buying are getting ever smaller – the newest are the smallest homes in Europe. 
It’s no wonder, when parents finally get rid of their kids from the family home (at an increasingly later age), that half their stuff stays behind.
So it may be a pain, when you’re pottering at home in your retirement*, to constantly come across boxes of CDs of angry teenage music, old tennis rackets and bin bags full of WWF magazines 1990-1994 (Sorry Mum – they’ll be worth something on eBay one day), but it’s nothing compared to the pain many have of trying to afford a decent place to live.
 
*To avoid the risk of unfairly characterising retirees, my co-Blogger spends his retirement making up for my lack of posting, running the London Labour Housing Group and fighting the good fight. I think he’s busier than ever.

The Tories are moving forward their plans to gerrymander equalise the number of constituencies. The aim is to have the same number of registered voters in each constituency. Of course this will mean vastly different numbers of people in each constituency: those who aren’t registered will be invisible to this process. And those who aren’t registered are disproportionately the young, the mobile, people who rent, lower income groups – basically Labour leaning groups.
Consequently, it is due to remove more Labour seats than Tory seats, though recently it seems the hapless Lib Dems may be on the sharp end.
One thing the Tories haven’t considered and perhaps the Boundary Commission either, is how they equalise constituencies in the south east when housing changes bite. High ‘affordable’ rents, cuts in housing benefit and the introduction of the benefit cap will cause lots of people to leave expensive areas and move to cheaper ones. The Boundary Commission is going to be playing catch-up from the start, trying to equalise constituencies as significant numbers of people are forced to move.  
One report already has 82,000 people leaving London for the surrounding towns and that’s ignoring the movement within London which is due to lose 5 seats in the review. When Central London’s larger less well off families end up in outer London and surrounding south eastern towns, how will the Boundary Commission keep tabs on them?
If they don’t, it’s important the Labour Party does, or people already uprooted from their communities will continue to find themselves disenfranchised. Local Labour parties should try to engage with people early, tackle the concerns that new arrivals (from anywhere) can bring and, importantly, get them registered to vote.
With many less well off voters heading out of central London and with real reasons to be angry with the Tories, perhaps MPs in places like Enfield, Barnet, Thurrock, the Medway Towns might regret supporting their party’s housing and benefit reforms.
It’s possible that even the gerrymandering won’t be enough to help them.

This is an addition to my previous post really about how we get ‘generation rent’ into homeownership, if indeed we should. There’s a paradox that the measures you take to ensure ‘responsible’ lending from banks are the measures which prevent more first-time buyers form getting a property. Opening easy credit again could be seen as one answer to the problem of younger people being unable to buy.
That would be the wrong lesson to draw from the financial crisis and its aftermath.
There are some people at the moment who can sustain a mortgage but to whom banks won’t lend. But that’s not really the issue. Looser lending may help in the short term, allowing some more people to buy a home. But in the long term, it’s cheap credit which fuelled the housing boom, drove up prices and locked most first-time buyers out. It’s not something we want to repeat.
As a colleague put it to me once: ‘house prices in Britain rise to the level of available credit in the economy’. More lending means higher prices.
That’s why the IPPR are right to say that there should be limits which ensure lenders act responsibly. I don’t know whether that’s a certain loan to value ratio as they suggest or something else. But, I do think the timing’s important. If limits like this are going to prevent another bubble, they need to be imposed before their effects bite, during a slack period. Once the housing market begins racing away, it’ll be difficult and unpopular to draw it back again with borrowing limits. Better that when it grows again, it does so under more sustainable rules.

After a long lie-in on Tuesday (I had a day off), I found myself surprised by the rarest of things – a front page housing story. Nope, not asylum seekers jumping the queue into council housing, or a big family in West London claiming 50k in housing benefit. But, a story about homeownership in the Independent and a serious one at that. It was followed-up with coverage by Sky and the BBC.
It seems people are waking up to something aspiring first time buyers have known for a while: if you haven’t got parental help, owning a home for most people is a distant prospect.
House prices and deposits for mortgages are so high that it feels (and indeed is) an unrealistic goal for people to achieve.
We either accept that many people will become renters in the long term and put renting on a more equal footing with owning your own home. That means greater security for tenants and ensuring higher standards, with better ways to enforce tenants’ rights. It also means providing renters with tax-efficient ways to build assets and save in the same way owner occupiers build value in their homes and benefit from prices rises.
Or, we need to do something to keep house prices lower compared to earnings, so younger people can afford them in the future. That means limiting the real-term rises in house value the older generation may be relying on – to fund later care perhaps or provide their pension. It means making homeownership once again the goal of public policy, but a reformed homeownership, which is about a secure place to live and not a financial investment.  
In both cases, it’s about transferring wealth from an older generation to a younger one, to those who own assets to those who do not – whether they are housing assets or take a different form.
The problem is what will convince the baby boomer generation to back reforms that do this? Only, I suggest, the realisation that their children will never realise an aspiration which the post-war generation came to take for granted. And that’s why this debate is a good thing, because at least it’s happening beyond the ranks of the housing professionals and creating wider awareness of stark housing choices.

Abigail Davies (of the Chartered Institute of Housing) blogged on Wednesday about her concern that social housing was beginning to be seen as a type of welfare.
I think this is a horse that is about to bolt, if it hasn’t already, and we’re going to need some very robust arguments to shut the stable door.
It’s clear that David Cameron sees social housing as a form of welfare dependency and living in social housing a ‘problem’ to be resolved. As he put it so eloquently in 2009:

“Generations of families are trapped in social housing, denied the chance to break out or to buy their own property. I don’t want a child’s life-story to be written before they’re even born, and a responsible housing policy which helps people up and out of dependency can help re-write that story.”

So, if you’re in social housing, you’re life story’s already written, unless you get out fast.
If the Tories and Liberals win the argument that social and affordable housing is ‘welfare’ making the case for it is going to be even harder than at present.
Here’s why it isn’t welfare and this is the case we should make:
Social and affordable homes help people to stand on their own two feet and look after themselves – providing good quality, decent homes at rents that low earning families can afford. Because families can afford their housing costs out of their own wages, they don’t need to be part of the mean-tested benefits system. And that gives people every incentive to work more, get a promotion or help another family member into work. A secure and affordable home is not a threat to people’s independence, but the platform from which people strive to improve their circumstances.
A policy of expanding the numbers of affordable homes will allow more people to be supported in this way, especially those who, at other times, would have bought their own home.
Secondly, we must be clearer about the ‘subsidy’ in social housing. Yes, it requires grant and government funding up-front to build it. But it pays its own way overtime. The rents from social housing more than pay back the grant it takes to build them. Britain’s ‘social housing business’ makes a profit for the country.
Council housing currently provides the Treasury with a surplus and will until HRA reforms next year. Rent revenues from homes owned by housing associations helps fund further new build, or in organisations that don’t develop, ends up accumulating as a surplus.
In a nutshell, affordable housing isn’t subsidised by the taxpayer and makes money in time.
The housing sector makes a compelling case for the importance of social housing for the poorest and most vulnerable. This is important and essential. But, if we want to make a better case to counter the ‘welfare’ argument, we need to be more robust in showing how good affordable housing helps people to work and provide for themselves.

Flicking through the Telegraph website on Friday, I came across this arresting headline ‘How Osama Bin Laden helped push up prime UK house prices.’

It reminded me of one of the most important facts of the London housing market – a large proportion, if not the majority, of the most expensive properties are purchased by foreign cash-buyers. The global super-rich find London a safe and secure place to invest and live – unsurprising if the alternative is Russia where the rule of law isn’t always strictly applied to oligarchs or a Middle-Eastern country where there is the potential for the occasional uprising.

The point of the article is that London became the destination of choice for Middle-Eastern investors owing to the antipathy towards foreign muslims in America after 9/11. This created more demand for our most expensive homes and pushed prices up further.  

Cash-rich foreigners aren’t just buying up West London’s prime addresses, but are also changing the character of areas further afield, like Hampstead and Highgate. (I can report however that they do not seem to have reached Hackney yet).

These buyers operate in a market and an economy far divorced from everyone else experiencing a sluggish economy, falling house prices, a mortgage famine, shrinking public services etc. Property prices at the top end continue to soar away, while they fall elsewhere.

In a time of little public investment in anything, let alone housing, I wonder whether we couldn’t ask the global elite to contribute a little more for the security and stability of a London home? Perhaps an additional charge on stamp duty for foreign purchases above a certain amount? The revenues could be hypothecated to help first-time buyers, especially those with families, get a stable and secure home of their own.

Given the astronomical prices, the number of purchases and the fact that these people are so wealthy even the global financial crisis didn’t dent their appetite for Mayfair mansions, I think we could raise a fair sum to put to better purposes.