One of the rabbits that the Chancellor pulled out of the hat in this afternoon’s budget was extra help for up to 10,000 first time buyers. What a great idea!
But, hold on, I’m sure I’ve seen this rabbit somewhere before…
FirstBuy announced today provides a 20% equity loan (jointly funded by the government and house builders) to help first-time buyers get a home. First-time buyers put down a deposit of 5% and get a mortgage on the rest.
HomeBuy Direct provided a 30% equity loan (jointly funded by the government and house builders) to help first time buyers get a home. Sometimes they had to pay a deposit and sometimes not, (depending on their lender) and they got a mortgage on the rest.
However, this awful HomeBuy Direct scheme was axed in the autumn and was described by Grant Shapps as “a very expensive flop”.
Thank goodness that they’ve introduced FirstBuy to replace it.
Alternatively, they could have maintained funding in HomeBuy Direct for the past seven months, especially as house builders are willing to match the government’s money (extra bang for your buck).
The real value of these programmes is that they keep house builders building because they provide a guaranteed stream of first-time buyers to buy the homes they produce. Without that confidence, they don’t build because they fear there’s no one to buy the homes. All quite simple really: create demand and underpin supply.
If they’d have stayed the course, they might have given extra ballast to a construction industry that was providing a big portion of the economy’s job and growth (a third of all growth in Q2 of 2010 and a quarter of all growth in Q3 of 2010). In Q4 of 2010, residential construction collapsed and the economy shrank by 0.6%.
Behind these figures are people who lost jobs they could have kept if the government hadn’t scrapped then re-introduced exactly the same policy. Complete stupidity.
In a recent post we covered the story of Westminster Council’s plans to introduce a new bye-law for the Victoria area of the city to ban street sleeping and soup runs.
Here, Nicky Gavron AM, Labour’s Spokesperson for Housing and Planning on the London Assembly, says that this ban is just one of many policies that will impact on homelessness.
Nicky Gavron AM
Former Deputy Mayor of London. London Assembly Member. Deputy Chair of the Planning Committee & GLA Labour Spokesperson for Planning.
The council made infamous by Shirley Porter is at it again, forcing people it considers undesirable out of the borough. In the eighties it was low income Labour-voting families; this time it’s some of society’s most vulnerable.
Westminster City Council’s pursuit of a byelaw to make it an offence to sleep rough and give away food in the most salubrious parts of the borough has been well documented.
Cllr Daniel Astaire, the council’s Cabinet Member for Society, Families and Adult Services audaciously told the Daily Mirror:
“Soup runs have no place in the 21st century. It is undignified that people are being fed on the streets. They actually encourage people to sleep rough with all the dangers that entails. Our priority is to get people off the streets altogether. We have a range of services that can help do that.”
But what Westminster councillors have not mentioned is that they are actively seeking to close the very hostels and services that help people off the streets and into a life of normality. One of these is the 100-plus bed Victoria Hostel in Castle Lane.
Westminster – like all borough councils – is given a budget to provide services for people in acute housing need, including rough sleepers. Most boroughs have had this budget cut, but Westminster has actually been given an increase – presumably in recognition of the need. And instead of using this extra money to carry out its legal and moral duty to help rough sleepers, it is slashing services and is prepared to waste police time and court resources by criminalising those who need help.
It’s difficult not to think that this is anything other than a cynical manoeuvre to turn Westminster into one big gated-community, and to seal it and its more well heeled residents off from a problem that’s getting worse across the city.
The combination of a stalling economy, rising unemployment, housing and benefit reforms will all conspire to push many more people into homelessness and increase levels of rough sleeping.
No assessment has been made by the government of the costs and impact of their housing and welfare reforms. The government’s total cap on benefits, which will hammer the budgets of families on low incomes, combined with their plan to raise social housing rents to 80 per cent of market rates will put intolerable stress on housing services in London.
Add to this the housing benefit reforms and the plan to make it easier for councils to discharge their homelessness duty, and the increase in rough sleeping seems inevitable.
Most damaging of all will be raising the age threshold for the Single Room Rate from 25 to 35. As one charity leader told me, rough sleepers will struggle to find normal shared housing. Forcing people to live together is a policy that has failed in the past and will fail again.
The Government must act now to stop rough sleeping getting worse. If it wants to convince us that these reforms are not ideologically driven, it must get tough with councils like Westminster by refusing this byelaw and reintroducing ring-fencing for those budgets that protect vulnerable people.
Without this, there is little the Mayor’s London Delivery Board on rough sleeping will be able to do to hold back the tide.
Most crucial of all, the government must rethink its housing and benefit reforms. As they stand they will lead to social segregation on an unprecedented scale – and rough sleeping is just the tip of the iceberg.
You can follow Nicky Gavron on Twitter at twitter.com/nickygavron. This article also appeared in Inside Housing magazine.
Steve mentioned in the IPPR work in his last post. I made it along to the launch seminar, where Caroline Flint and Grant Shapps’ Parliamentary Private Secretary Jake Berry were speaking.
Jake Berry is a rare thing in the Conservative Party – someone interested in housing and someone with a background in it. He was also clearly well up to speed on government policy. Something that not all PPS’s focus on. Unfortunately, it also meant that he shared the same fallacies as his boss.
Pressed on the boom and house price rises, he echoed John Healey (oh and Grant Shapps) in saying that a house is a home, not an investment and referred to the need to keep prices in control.
When pushed on what ‘levers’ the government had to do that he mentioned three things:
Liberalising planning laws,
Abolishing housing targets and Regional Spatial Strategies, and
The New Homes Bonus
He clearly assumed that a flood of new supply would keep prices down (and indeed that these measures would deliver it). He can only hope that the restrictions on mortgage lending stay in place long enough for this new supply to flood the market. Otherwise, as soon as lending loosens again, prices are back on their way up.
The idea that we can get enough new supply built quick enough to affect house prices is clearly non-sense.
So in the short-term prices will remain high and mortgage lending tight, meaning bad news for first-time buyers.
Caroline Flint made a big point of the importance of improving the private rented sector and went beyond Labour in government, arguing we should consider longer-term tenancies in the private rented sector and greater security for tenants.
Caroline of course would support the principle that people who want to own their own home should be able to and should be supported to. However, I wonder if she isn’t more realistic than the government and is looking at what will really improve the lives of younger people in the housing market.
Private renting is commonly seen as for the young and the poor, but it will increasingly be the option for those on middle incomes for longer periods and their rented property may be where they look to start a family. With aspirational voters finding themselves priced more and more out of homeownership, it’s a good time to win support for measures to improve the private rented sector for them and everyone else.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Tony obviously spent much of the weekend counting up the number of housing reviews and commissions taking place at the moment for his post yesterday. One of those he listed has already produced some interesting research for its launch event last week – the Institute for Public Policy Research (ippr) fundamental review of housing policy.
The project, led by Andy Hull, Senior Research Fellow ([email protected]) will have four streams of work. It will look at housing’s role in the economy and how housing could play a less destabilising part in the macro-economy; housing supply and how to meet the projected increase in housing demand between now and 2025; housing allocation and use, and how to achieve a fairer and more efficient use of the housing stock we have; and housing management, looking mainly at the need to professionalise the private rented sector and encourage mixed communities.
The project’s first report on housing demand to 2025 presents a detailed model for estimating the number of households in each region requiring homes, which as they rightly say, should underpin the development of housing and planning policy. The model looks at how housing demand might vary according to changes in the growth path of the economy – the good, the bad and the ugly as they call their various economic growth scenarios.
This is a detailed and slightly techie read, but the headlines are clearly presented. Housing demand will outstrip supply by 750,000 by 2025 ‘equivalent to the combined current housing demand of Birmingham, Liverpool and Newcastle’. Between 3.3 million and 4.5 million additional households will be formed by 2025. Household growth will vary by region, with the fastest growth expected to continue to be in the South East and London, but even in the region with least pressure, the North West, the increase in overall housing demand relative to current demand will be in the range 9–15 per cent: ippr say there will be ‘a substantial imbalance in the supply and demand of housing in all regions’.
The demand for homes in the different tenures is seen to be closely linked to economic performance – the poorer the performance, the greater the demand for social rented homes. The demand for social rented homes (supply of which the government has just reduced to zero in the future) will still be high under all scenarios.
It will be worth keeping an eye out for further publications and events by ippr as the research progresses.
There are at least nine housing reviews and commissions running at the moment: Institute for Public Policy Research
The Fabian Society
ResPublica Oliver Letwin/Cabinet Office RICS The Labour Party The Mayor of London
The London Borough of Ealing
The London Borough of Lambeth
I’m sure there are more, especially from local authorities trying to work out how to respond to the government’s changes.
It’s definitely an important time to consider where we go with housing next and what new ideas can be practically brought to bear on the intractable issues we all know about.
Many of these reviews and commission have excellent memberships from within and beyond the housing world and there will be a lot of ‘cross-fertilisation’ of ideas and approaches. The interactions between what comes out of these bodies will be interesting: I doubt the Fabians and ResPublica will agree and what difference will we see between bodies that actually have to deliver (councils, the Mayor, the Cabinet Office) and those that are just tasked with the thinking?
I doubt there are this many reviews and commissions going on in other sectors and policy areas. It does beg the question whether the housing sector as a whole really has the faintest ideas what to do and how to win over support for some actions many agree on.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
A rare opportunity to welcome an initiative by a bundle of ten councils of all political persuasions – Tory, LibDem, Lab and NOC – arose this week. The issue is an old one on which a dedicated band of experts have campaigned for 20 years or more. And the question is whether George Osborne is any more likely to listen than any of his predecessors as Chancellor. My feeling is not because the tradition of orthodoxy runs deep at HM treasury.
Changing the borrowing rules has been a celebrated cause, where everyone except the people who matter most, in Whitehall, favours change. In essence, in the UK borrowing to invest in council houses has been included in the main measure of public sector borrowing, and therefore subject to strict control. Other countries especially in the Eurozone, do things differently, and we could count council housing and other public corporate activities as separate trading activities where borrowing is determined by the business plan of the organisation involved and its revenue streams – and governed by the prudential code – rather than being controlled by an artificial national count of all debt that only the Brits use.
Detailed work led by the CIH in the 1990s (their report was entitled ‘Challenging the Conventions’) led to high hopes that the new Labour Government would change the rules. Some adjustments were made, mainly with the prudential borrowing regime, which helped, but the breakthrough never arrived. The research for the CIH report was undertaken by the (then) leading Coopers and Lybrand accountancy company, now part of PWC. They then did follow-up research with financial institutions, revealing in a second report called ‘Consensus for Change’ that the City was wholly relaxed about the proposed revision to borrowing measures and that it might lead to over £1 billion of extra investment being available for council housing.
This new initiative, supported by councils from all over the country as well as all political persuasions, takes the campaign into yet another decade. They assert that the change would not affect UK credit ratings, would ease unemployment in construction, and would help deliver the Government’s aspiration to build more homes during this spending review period. Their current estimate is also that an additional £1bn could be raised for investment in new housing.
HM Treasury being what it is, silence will probably be the response. I don’t think they have ever issued a serious rebuttal of the arguments. Time will tell, but some of us have already grown old and grey waiting for this sensible reform.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
There has been speculation in the last few days that the charitable status of housing associations might be under threat. It would cost the sector a huge amount in additional tax if charitable status was lost. The issue has been bubbling under for a while, but the new debate has been triggered by a request from the Tenant Services Authority to the Charity Commission to express a view on the implications of the new (mis-named) Affordable Rent regime.
The Commission’s response is of course equivocal: it depends on the circumstances of each association, what their charitable objectives are, and how Affordable Rent fits in with their activities as a whole. The key sentences in their reply are these:
“Generally, where an association has a charitable purpose to relieve those in need by providing housing, then those who benefit must be poor and in housing need…….. Associations will be aware of whether, in practice, some affordable rent products have rents at a level that people in poverty cannot access, and where housing benefits are capped at a level below the rent.”
“In summary, in principle, charitable housing associations can provide an Affordable Rents product. However, the extent to which the product will be used to relieve poverty may determine whether it is able to satisfy the public benefit requirement and one aspect of this will be the extent to which housing benefit will cover the rental. Charitable associations operating in areas of high market rents will therefore need to look at this aspect in detail to see whether the affordable rents can provide a means of relieving poverty.”
From an ideological point of view, it is clear where the Government is headed. By dictating that there will be no new social rented housing built in future, only ‘Affordable Rent’ (ie up to 80% of market rents), and by requiring that a proportion of re-lets in developing associations are also let at ‘Affordable Rent’ levels, the government is signaling the transformation of housing associations from bodies dedicated to providing homes for the poorest in society to institutional private landlords of near-market homes.
Some people in the sector have also been asking for this problem to visit them. Many housing associations are brilliant at what they do and serve homeless and badly-housed people, their tenants and their communities very well, but some look and act less and less like charitable bodies as each year passes and give every impression of not liking poor people much let alone wanting to relieve their poverty.
Charitable status might be protected as long as it is possible for people on low incomes to access ‘Affordable Rent’ homes. That in turn will depend on the allocations policies followed and the continued availability of housing benefit. Some associations think they will not be able to let the new homes to people who could be defined as charitable beneficiaries; for schemes to be viable they will have to let the homes, or at least a significant proportion of them, to people who can afford the rent without the risk associated with needing housing benefit to support their payments. For the moment, the government says HB will be available for AR properties, but in high cost areas it is the operation of the overall benefits cap and the uprating by less than real inflation that will make it impossible for families on benefit to access these homes.
The loss of charitable status would be a blow, but, in the context of government housing policy, it is the bigger question ‘what are housing associations now for?’ that needs to be answered.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
Most people will never get to know about the work that many MPs put in, in quality and in quantity. But anyone following the Committee stage of the Localism Bill would be impressed by the hard graft put in by the key members of the Labour opposition, their analysis of the issues and their knowledge of the subjects under discussion.
The Bill covers such a wide range of topics and working out the ramifications of over 200 specific clauses and more than 20 schedules is a herculean task. As of 10 March there had been 24 sittings of the Bill Committee, and the leading Labour members have attended just about all of them, making dozens of amendments and speeches.
I have been following the debate on the homelessness sections of the Bill – see my previous post for more background here. The government’s policy of allowing councils to discharge their homelessness duty by obtaining a private rented sector letting for the applicant drives a coach and horses through the homelessness safety net, legislation that is arguably one of the legs of the welfare state. The whole debate can be read here.
On 10 March Nick Raynsford made a powerful speech on this section of the Bill – unfortunately to no avail. It traces the history of the homelessness legislation, how the Tories have always opposed it, and how the Lib Dems have always supported it – until now. Raynsford was of course heavily involved in achieving the passage of the original homelessness legislation in 1977. Here are a few highlights from what he said.
“Homeless people are not different from other people. There are some who have special problems, but the vast majority of homeless people are those who have fallen on difficult times. They may have lost their home through a variety of different circumstances, and they are exposed to all the horrors of not having a home. Above all, they need help and support to get back on their feet and to move back into the mainstream and normal life.
“That is what brought me into working in housing in the late 1960s. I was of the generation that saw “Cathy Come Home” and was horrified by the revelation in that powerful programme of just how badly we as a society treated homeless people in the 1960s. It was a revelation. I was not aware that old workhouses were still being used as accommodation, or that families were routinely split up and husbands were not allowed to go into accommodation for homeless families—only the women and children could go in, and the husbands were split away. There was no proper safeguard for homeless families or people. That led me not only to work in the voluntary housing sector, but to campaign in the 1970s for a law that would give hope and security to homeless people and help the process that I have just described.
“That process involved helping homeless people through the difficulty and back into the mainstream of society, rather than allowing them to be stigmatised, marginalised and punished, as was the case before the Housing (Homeless Persons) Act 1977. That Act was very important, and I helped Stephen Ross, the Liberal MP for the Isle of Wight, who bravely undertook to promote that as a private Member’s Bill in 1976, a time when he could have easily adopted other causes that might have been more popular in his constituency. I know from talking to him at the time that he was determined to do something hugely important for society, not just take on something that would be popular and help him to win a marginal seat in the ensuing general election, so I pay huge tribute to him. He did so with the support of the then Labour Government, which had a wafer-thin majority, so Liberal support was important. The two parties worked together, and that legislation was the product of Labour and Liberals working together to give rights to homeless people.
“I am sorry to say that the Conservative party at the time opposed that legislation. It voted against it and fought it literally clause by clause through this House. However, it got onto the statute book and made a difference. It changed attitudes towards the homeless, and it ensured that provision for homeless people was brought into the mainstream of housing provision, rather than being something on the margins that separated them from the rest of society. That continued throughout the 1980s, until in 1996 a Conservative Government sought to weaken the safeguards for homeless people. In Opposition, we in the Labour party fought that unsuccessfully, supported by the Liberal party—I think they were the Liberal Democrats by then—who were absolutely at one with us in defending the 1977 Act against the Tory Government’s attempt to weaken it. I welcomed that support.
“In 2000-01, when I was Minister for Housing and Planning, I had the privilege of introducing the Homes Bill, which reinstated the principal safeguards of the 1977 Act which had been weakened by the 1996 legislation, and also introduced the concept of local authorities developing homelessness prevention strategies. That Bill did not reach the statute books immediately—it fell because of the 2001 general election—but it was re-introduced by my successor immediately after that election, when I had moved to another responsibility, and made it on to the statute book. That was passed by a Labour Government with the support of the Liberal Democrats. In fact, I well remember the right hon. Member for Bath (Mr Foster), who led the Opposition for the Liberal Democrats in the Committee that discussed the Homes Bill in the run-up to the 2001 general election. He was pressing us to go further, rather than saying we should weaken in any way our commitment to homeless people.
“This is what really saddens me about what is happening now, because we are seeing here a coalition of Conservatives and Liberal Democrats weakening a piece of legislation that should be a proud monument to parties working together to advance the prospects of disadvantaged people and help those in difficult circumstances to get back on their feet. I am delighted that the hon. Member for St Austell and Newquay has—to a degree—maintained the honourable tradition of his party in seeking to safeguard the position of homeless people. I hope when on Report he will continue to do so with a commitment to voting for his views, rather than simply articulating them.
“I say to this Committee, and to all Members of this House, that this is a retrograde step. This is weakening the safeguards for homeless people…. it will expose more people to a position where they are subject to a dependence on benefits; where the work incentives are to very large degree taken away by punitive rates of taxation because of the withdrawal of benefits; and where they do not have the security to be able to rebuild their lives because they live in insecure lettings where they cannot be certain they can stay from one year to the next and continue to occupy it as their home, providing they pay the rent and meet the tenancy obligations. This is a sad, retrograde step, and I believe that the House will ultimately regret it and will come to realise that if it passes the clause, and the Bill, it will have made a serious mistake.”
Old fashioned social housing was originally to support the majority of working people with decent homes at a low rent, for the long term, in stable communities. Indeed, right at the beginning social housing was reserved for those working and often working on better incomes than the average.
It became a tenure in which we housed the poorest and most vulnerable who could not afford the housing they needed in the market. It provided for them a long-term home and the chance to build a life in a community.
In both cases, there was a clear rationale for what social housing was for, even if the latter did not succeed always in creating the prosperous or sustainable communities.
‘Affordable Rent’ is at an intermediate rent level, but the government still say it is for the poorest and those in need on council waiting lists. It can only do this job however once combined with housing benefit to make up for the higher rents which the poorest can’t afford.
But even then, housing benefit will not cover the new higher rents in many places. So housing associations want to pitch the homes higher up the income chain, to those working on low to medium incomes.
So is it more accurate to say that this is a sub-market rent for working families in stable communities, as traditional social housing was? That is, it is not the option for the poorest.
Well, not really. It will force many working people on to housing benefit when in the past, the low rents of social housing kept them out of benefit dependency. And the government’s tenure reforms (fixed-term and when your ‘need’ ends you move out) makes affordable rent more like a safety net only for the most vulnerable in certain circumstances.
I can only see that the purpose of this ‘affordable rent’ product is to help the government keep up affordable housing stats. Who in the real world is it designed to help? It’ll help some people depending how housing associations use it and any new homes are needed, but it hasn’t been designed with any family, household or ‘end user’ in mind.
Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone. Steve sits on the Editorial Panel of Red Brick.
‘Neigbourhood Watched’ on the BBC seems to be achieving cult status, ‘The Wire’ without the guns (and without the Americans). Although I’m not sure whether I’m more disturbed by Michelle and Laura, two of the ‘stars’ of the last episode, or some of the twits who tweeted about it.
It is refreshing to have a programme about the work and challenges facing housing officers. They came across as caring and business-like, offering the families chances to change but then being decisive when the chances were spurned. The focus of the programme on anti-social behaviour may have given a distorted view of what housing officers do, but it demonstrated that it is a serious blight in many neighbourhoods and can ruin an estate. For a family to nickname a small child ‘asbo’ is pretty disgusting. I may have missed it but the one weakness in the approach was that I can’t recall any reference to Children’s Services being made. The families will live somewhere when they are evicted, the children will still be there, things may get worse not better, and there are no housing officers paying attention in the private rented sector.
Most of us go into housing because of Bill and Elsie and have to put up with Michelle and Laura. After a good life bringing up their children in their council home (the distinction between the council and the housing association seemed irrelevant to them) all they wanted was a sheltered flat with no stairs as they approached their 80s in declining health. The housing officers knew the house would be in high demand for a family but it was touch and go whether they would qualify for a sheltered flat. How crazy is that? But their story demonstrated the huge significance of a decent affordable home to the quality of life of ordinary decent people – and in my experience they are far more representative of social housing tenants than the stereotypical spongers we read about everyday.
I expect the programme is available on BBC i-player if anyone missed it. I hope there are more Bills and Elsies in the rest of series. They make the struggle worthwhile – for resources, for more affordable homes, and for decent treatment of tenants as human beings not chess pieces to be moved around the board every year or two.
