I thought I’d flag up this article in the Telegraph from last week.
It’s about the construction industry hitting the buffers because of the poor weather in November and December this year.
It also notes that construction, despite being a very small part of the economy (6%) accounted for a significant proportion of what little growth there has been. Construction growth made up one third of all growth in the economy in Q2 of 2010, and one quarter of all growth in Q3. Not a bad contribution from a small sector.
This shows that the extra money invested in housing as part of the fiscal stimulus worked exactly as it was supposed to. The construction growth of the last year has kept people in jobs (and off benefits) and supported firms that otherwise would have gone under or contracted.
Think how much more anemic the growth in Quarters 2 and 3 would be without the extra housebuilding.
More worryingly for the future, construction is now contracting, jobs are being shed at a rapid rate and in particular “residential construction [is] falling at the fastest rate since April 2009, indicating the knock-on impact of a stagnant housing market.”
And I would add, deep cuts in capital for housing investment and the fiscal stimulus coming to an end.
And remember not only did this irresponsible, deficit creating spending splurge keep people off benefits, in jobs and supported competitiveness and capacity in the economy – it leaves a legacy of tens of thousands new affordable homes across the country that would not otherwise have been built.
In previous posts we highlighted the bizarre examples used in the government’s advice on how to deal with squatters, especially what to do if your home is squatted whilst out walking the dog. Bernard Crofton recalled that the dog example originated as an ironic comment made at a meeting many years ago. From his Freedom of Information request, it seems no such examples actually exist and, even if they did, the government wouldn’t know because it keeps no data on such cases.
It was with this in mind that I read the 7 January announcement by Secretary of State Eric Pickles that he planned to heavily restrict the use of Empty Dwelling Management Orders (EDMO), introduced by Labour to take action on properties that have been empty for 6 months or more.
Once again the justification for the policy is punctuated by colourful and extreme examples. Pickles said it was wrong that a bereaved family could face having their loved one’s home seized under an EDMO, and quoted examples of councils attempting to use the powers against someone caring for an injured daughter abroad and a 96 year old who had passed away in a nursing home.
These examples would indeed be extraordinary if true, and CLG will shortly receive an FoI request seeking more information about them. What is known is that only 44 EDMOs have been made since the law came into effect in 2006. Councils would indeed have to be out to lunch to have focused on such cases given how many empty homes there are to choose from.
Let me be clear: just as I disapprove of people squatting properties when homeowners are walking their dogs, I also disapprove of councils making EDMOs against ‘people in vulnerable situations’ as Mr Pickles calls them, or when a property is empty for good reason.
Having compulsorily purchased quite a lot of empty homes in a previous life (indeed under the Thatcher government) I know that owners get into complex positions especially if a relative has died intestate. Back then the owners would be given lots of opportunities to bring their properties back into use, and the same is true today with EDMOs. But the very fact that the council intervened and was willing to take strong action meant that many properties were brought back into use without any formal action being taken. The threat was taken seriously. Owners will see Pickles’ soft soap policy and laugh when the council comes calling.
The real reason for Pickles’ change is ideological: “The Coalition Government is standing up for the civil liberties of law-abiding citizens. Fundamental human rights include the right to property” he said. More important, it seems than the human rights of the homeless.
Pickles clearly has little understanding of the damage empty properties can do to neighbourhoods in a very short space of time. In future he will only allow EDMOs to be used where there has been vandalism or squatters and other forms of anti-social behaviour, and action can only be taken after the property has been empty for two years. So an owner will be able to keep a property empty in a vandalised state, a blight on the neighbourhood, for 2 years before the council can take EDMO enforcement action.
I hope councils will object strongly, both to the stupidity of the new policy and to the demeaning nature of the argument for introducing it.
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Right hand, meet left hand
The tough choices of joined up government…
As we reported, Grant Shapps made the case earlier this week that a stagnant housing market with prices remaining flat or decreasing in real terms would be a good thing for first-time buyers and achieve a more stable housing market in the future.
At the end of this week, David Cameron argued that the housing market “has become very stuck and we’ve got to get it moving again”.
He rightly points out that mortgages are now hard to get even for those who are able to pay them and are likely to be able to in the future:
“If you are a single person, you are earning a decent salary. You go to the bank or building society, you are actually quite a good risk – they won’t give you 80 per cent of the value, they won’t give you four times your salary.”
Here’s the problem however – as soon as you start opening up mortgage lending again, to exactly the people David Cameron describes above, then house prices will start rising again, exactly what Grant Shapps doesn’t want.
As I said, in my last post the brake on house price increases is mortgage availability. The price of homes in Britain rises to the amount of available credit in the economy. Increase the credit, increase the prices.
It’s one of the tough problems you face in government. They can try to help Britain to develop a more stable and secure housing market. The result of that is locking first-time buyers out of the market in the meantime. Take your pick.
Without some really radical reforms (that some of our previous commenters have flagged) the government has pretty limited powers over shaping the housing market. They’re going to find it really hard to force the banks to free up their lending, not least because they also want to banks to build their reserves back up so they can pay back the public’s money.
In contrast, if/when banks in the future begin to lend more freely and the housing market gets motoring again, they’re going to have to take some pretty tough steps to stop prices spiralling again. Grant Shapps hasn’t said what steps he would take or what levers government really has in these circumstances, but it would take quite a lot of political steel to intervene.
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March of the Meanies
A Day in the Life of Ministers in and around Communities and Local Government. On January 3rd, Housing Minister Grant Shapps took action to prevent the demolition of a single house in Liverpool, occupied from the age of 0-4 by one Richard Starkey, later a drummer in a band. “Let It Be” trumpeted Mr Shapps in the CLG press release. More like Back in the USSR.
Meanwhile, just along the corridor, Bungalow Bill* (played by E Pickles) was condemning, in the strongest possible terms, “Whitehall’s addiction to micromanagement” whilst ending requirements limiting car parking spaces in new developments, alongside his friend, Lovely Rita, meter maid (aka Transport Minister Philip Hammond), who was removing restrictions on councils’ parking charge regimes. CLG didn’t risk calling the policy Drive My Car.
All I can say is Help. And Run For Your Life.
*John Lennon said that “‘Bungalow Bill’ was written about a man at the Maharishi’s meditation centre who went off to shoot a few tigers then came back to commune with God.
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A new type of Labour A-List?
I was thinking about more party reforms that Ed Miliband could pursue, and especially what kind of people we want to be Labour MPs.
There are well known barriers to becoming an MP for some groups and Labour has taken the most steps to address under-representation – most obviously through all women shortlists, which have resulted in Labour having more women MPs than all the other parties put together.
The Tories have tried, but with less success with their derided A-list of bright young things, who ‘get’ the Cameron project.
To become an MP requires in most instances years of steady hard work, dedicated campaigning, attempts at an unwinnable seat or two, a lot of time, supportive friends and family and much more. It’s unsurprising really that given these demands politics is becoming more professionalised.
People who already work in politics-related jobs are most likely to understand the processes and are likely to have employers sympathetic to their ambitions and give them the time they need.
So do we need more people in Parliament who have done different things in life and perhaps have had a career in business, local government, the health service, housing associations and charities, before entering parliament?
The truth is if you have a serious job in any of these fields, you’re going to find it hard to put in the time to devote yourself professionally to winning a seat. Some do, and great credit to them.
So could we have a Labour A-list that supports experienced people onto the Labour benches? People who know how to run things and led serious organisations and have not made professional party politics their lives.
Potentially this would add gravitas to the PLP, probably make for more independent-minded MPs, provide a greater pool of people who would make good ministers (they’ve run things) and widen the pool of talent and expertise from which we draw.
Not directly housing related I know – but I got started on this thinking about the people I know in the housing world. Many in local government, housing associations and housing charities were politically engaged on the left at some point, but chose to pursue their politics through a public service route, to the exclusion of elected politics. It would be good if it were easier for them to bring their skills and experience back into politics later in their careers, rather than being forced to make one choice at an early stage.
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We need Isambard and a tin hat
As Tony suggests in his post I agree with Grant, Grant Shapps deserves (begrudging) respect for raising the importance of achieving long term house price stability, but I hope he has his tin hat on in anticipation of the reaction in some parts of the media. The Mail has already highlighted Shapps’ own personal property dealings as they smell ‘hypocrisy’. Of course, never one to miss a political trick himself, Shapps also tries to pretend that house price hyper-inflation came in with the Labour government in 1997, whereas all the key trends and policies, long booms followed by a sharp and damaging busts, have been in place for a couple of generations now.
The real problem is that I can’t see anything in his or the government’s philosophy that might lead to the necessary actions being taken to bring house price stability about. The Mail quotes Shapps as saying that homeowners should no longer rely on their houses to fund their retirement and that ministers were hoping to engineer an era of ‘house price stability’ in which property values would gradually be eroded by rising earnings.
‘Engineering’ a market seems rather at odds with everything else they stand for.
Indeed rather a lot of extremely heavy engineering projects would be required to achieve long term price stability. We may need the housing equivalent ofIsambard Kingdom Brunel because all of them are hard to achieve.
The first is a better balance of supply and demand, which will need policies to massively increase the rate at which new homes are built over a sustained period of time, more than a decade. With the regional planning framework scrapped, and huge cuts in infrastructure investment, this seems a forlorn hope to me.
The second is the stable supply of mortgage funds on sensible terms, targeted towards the cheaper end of the new build market, to encourage developers to produce more affordable homes. This will require a stiffer attitude towards regulation than this government promises and lenders are used to.
The third is to tackle land prices and not just house prices – the problem in many places is not the cost of construction, but the price of the land – which can probably only be done through some kind of land value tax, not natural territory for any of the main political parties.
And fourth, we need a stronger safety net for home owners when interest rates spike or redundancy strikes – Labour’s policies during the credit crunch were a good start in this direction. Stable or falling prices need to be accompanied by reduced risk for individual households.
At the bottom of it the hardest change to make will be in attitudes. A good home ownership market is vitally important, but it will fail if it is regarded as the only tenure that brings status and respect, or as a get rich quick scheme or a proxy pensions market or even a place to bung the latest bankers bonus. The core business should be about delivering reasonably-priced homes to people on reasonable incomes, and shared ownership to people on ‘intermediate’ incomes who want it. But the market will still fail unless we have a better understanding of the relationship between tenures. A balanced housing market needs far more renting as well as more homes built for sale, so people at all income levels have real choice at different stages in their lives and are not forced into debt that they cannot sustain.
More care is needed with the language of ‘aspiration’, which has become synonymous with wanting home ownership. Of course many people would like to own their own home if they can afford it, but the aspirational classes may well give higher priority in future to getting their children through college and protecting their retirement.
These are real challenges not just for Grant Shapps but also for Labour’s housing policy review when it gets under way. It would be nice if a new consensus was emerging that enabled serious long term policy options to be discussed rationally, but I suspect the odds are against.
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I agree with Grant
I know, I know, we’re not supposed to say this here. But by advocating the need for real terms fall in house prices he is right. Grant was twisting and turning trying to avoid using the term ‘falls in house prices’ on R4 just now, but that’s what his house price stability means. His example is house prices rising by 2% while earnings increase by 4%.
No bad thing – so spit it out next time Grant.
More remarkably, Grant says to Sky News that ‘A house is a home not an investment’ – exactly the stance he attacked Labour for just a year ago.
It would be bad for the economy to have any sudden drops in house prices, so the aim of gradual reductions I’d say is about right.
Interestingly, Grant wants a housing market that is more ‘rational’ than it currently is. I thought Conservatives were supposed to believe that free markets are necessarily ‘rational’ and it’s state interference which makes them work in ‘irrational’ ways?
It’s good to see a Conservative minister coming round to a left-wing way of thinking.
This aim requires considerable intervention in the housing market by the government. What do the right-wingers in his party think about this? Interfering seriously in a private market and pushing down the value of people’s homes?
Labour could look to make cheap political capital out of arguing that this is an attack on homeowners and homeownership, as Grant did in opposition.
Or Labour could welcome this. I argued here that one of Labour’s future principles should be intervention in the housing market to prevent further excessive house price increases. We should take Grant at his word and challenge him to tell us how he will intervene in the mortgage and housing markets to make this a reality.
He’ll still find that pretty tough to answer.
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A Christmas Carol (in prose)
A guest post for Xmas from Bernard Crofton adding a seasonal spin on a topic previously reported on Red Brick here.
A Christmas Carol (in prose)…… being a …….. ghost story for Christmas.
In November of 2010, the two government departments facing amongst the biggest budget cuts, the Department for Communities and Local Government, and the Ministry of Justice, issued a new guidance leaflet : “Advice on dealing with squatters in your home” available as a pdf download from http://www.communities.gov.uk/publications/housing/advicesquatters, where there is a helpful summary as well :-
There are an estimated 20,000 squatters in the UK. This guidance is aimed at homeowners and to make them aware of their rights where their property has been unlawfully occupied. It has been jointly produced with the Ministry of Justice which makes clear that it is an offence for a squatter to fail to leave a residential property when required to do so by or on behalf of either a displaced residential occupier or certain other occupiers whose interest in the premises is protected under the legislation.
That stirred some queasy questions about the “new” advice; mainly “Why?” and “Why now? “ .
However, when I clicked and the pdf started its weary download, I heard the rattling of chains in the cellar. Surely Jacob Marley has been dead these seven years (or 17 since the Criminal Justice and Public Order Act 1994).
The Advice starts with these words:
“What can I do if my home has been taken over by squatters?
1 If you return from holiday or walking the dog to find squatters in your home and they refuse to leave, you can call the police and report a criminal offence. “
I was fascinated by the imagery. Mainly because part of it was mine, come back to haunt me. I was among the local government representatives consulted by the Home Office about the legislation. Actually the law, as laws of that era went, ended up quite fair. I never met any supporter of squatting who thought squatters should be able to move into an occupied dwelling and effectively evict the occupants. Nor did I ever find a case where this had happened. Canvassing round the councils in London (where statistically almost all the squatting in the UK was concentrated) we couldn’t find a single case where that was alleged to have happened.
We found a few cases where home-owners were trying to repair a newly acquired empty property before moving in, and it being squatted while undeniably unoccupied. We found very many parallel examples on council estates (and I managed a tenth of that national 20,000 squats figure) But the pubIic debate had far more of the tang of the illegal immigrants debate It was about scroungers and spongers but with a more direct threat: they wouldn’t just take your money indirectly through the tax system, they would take your home and all that was in it!
One newspaper (I think of it as being the Daily Mail but I may just be prejudiced) ran a tale of a family returning from holiday to find their home squatted. “Vox populi” in the neighbourhood were said to be frightened to leave their homes unattended in case squatters moved in. We tried to find this example. The local council, where it reportedly occurred, only came up with a couple who lived abroad and owned several rented properties in the UK, one of which they found squatted on a visit back to the UK. They were certainly neither “displaced residential occupiers” nor “protected intending occupiers” of the property.
So in discussions with the civil servants I pointed out that if I went out to walk the dog and found someone in my home when I returned, I would not find the Police reluctant to act on straightforward “breaking and entering” or even malicious damage grounds. My sarcasm was effective. That “walking the dog” phrase alongside the “returning from holiday” one became shorthand for the fact the legislation was an over-reaction or a pandering to right wing prejudices. I still do not believe any owner-occupier was ever “displaced” by squatters while the kettle was still warm, or as Confucius say “swinging chain, warm seat”.
The issue, as local government and voluntary sector consultees all argued, was the time it took to get to court to repossess a squatted property. Ironically,court waiting-times meant that if you bought an empty house that was immediately squatted, you were kept out of it for the full term of that other brilliant invention of the era: the shorthold tenancy. So the law was eventually drafted to include the situations of both “a displaced residential occupier” and a “protected intending occupier” of the property. And rather than put resources into reducing court waiting lists we got the “interim possession order”.
Now I never rule out the possibility there really was a case where people left their home to go on holiday and found it squatted on returning. I never completely rule out the possibility that somewhere there is a Big-issue seller who gets into his Rolls Royce at the end of the day. But I never met one remotely near that bracket, and so I remain sceptical. But as for home-owners being squatted while out for a walk with the dog, I never heard anyone ever suggest it has happened – except me as a sarcastic example of the hysteria over squatters.
Suddenly at the end of 2010, I find the example heading a new advice leaflet, not just from one but two government departments. So I wrote to them both under the Freedom of Information Act (we didn’t have that when the 1994 Act was proposed, it was up to us to produce our own statistics). I asked:“Please supply me with any statistical information held or viewed by the Department or its predecessors, as to the number of owner-occupiers who have found squatters in their homes: a) on returning from holiday; b) after walking their dog.”
DCLG were first to respond, with the classic line from Fawlty Towers “ I know nuzzing”. The Ministry of Justice were more helpful. The person with “responsibility for answering requests in the Ministry of Justice (MOJ) which relate to civil (non family) law and housing possession related statistics which are to be handled under the Freedom of Information Act 2000 (FOIA)” told me :
“I can confirm that the Department does not hold the information you have requested. MOJ does not record property owners or property occupiers who have found that whilst away from the property, for whatever reason, that it has been occupied by squatters.”
After advising me of the rights of the un-numbered disposed occupiers, he helpfully provided the following table which he was not obliged to do under FOI, as it did not directly answer my question. He hoped it would be of use to me, so I am using it below. He warned me :
Table 1 below shows the number of Interim Possession Orders and Possession Orders against trespassers made in the county courts of England and Wales for the past full five years. Please read the footnotes underneath the table which describe how the data were compiled. Please note in particular that the figures include cases where properties were occupied by types of trespassers other than squatters (figures for squatters alone could only be determined by inspecting individual case files at a disproportionate cost), involving non-residential properties; and also that not all such orders given result in actual repossession of a property from a trespasser.
Table 1 Number of possession orders and interim possession orders given for trespass in the county courts of England and Wales, 2005-2009
Possession orders Interim possession orders
2005 929 117
2006 1036 114
2007 752 154
2008 626 164
2009 653 136
Source HMCS manual returns
Notes:
1. Data from 2005 to March 2009 were gathered from the Dept’s Management Information System. Data from April 2009 were collected from the courts online data monitoring system One Performance Truth
2. Quality assurance checks have been carried out to remove outliers. However these decisions have not been verified by contact with the courts. These figures should therefore be treated with caution.
3. Orders against trespassers and IPOs can be given for the possession of both commercial and residential properties from trespassers.
4. Not all orders and interim orders given for possession against trespassers relate to properties that are occupied by squatters.
5. Not all possession and interim possession orders result in actual repossession of a property from a trespasser.
Now let’s ignore that the table includes squatted shop-units etc. and that not all trespassers are squatters. The table shows possession orders against trespassers (I recall the definition used to be “against persons who entered as trespassers” but that mayhave changed).
I conclude from this table the following.
The number of full orders has declined significantly in the last five years.
The number of interim orders has started to decline, after a rise.
That at the current rate of full orders it would take 30 years to remove the current number of squatters….if there were no new cases.
That at the current rate of interim (i.e. urgent?) orders it would take nearly 150 years.
No one seems in a hurry.
Is it me or is there something odd about the emergence of this new governmental advice from financially strapped departments just in time for the Xmas season? Conspiracy theories are accepted, but any genuine leaks as to why this ghost has been disturbed would be especially welcome.
Bernard Crofton
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Remember this?
I remember reading this a few months ago and thinking that as a plan for housing it was fairly anodyne, but largely harmless. The only really interesting measure being the tentative promise to examine council borrowing for housing:
Better and more affordable homes
In a fair society, everyone should have the right to a decent home, but this is not the reality of Britain today. There should be quality social and private rented housing available for those who need or choose it. And it should be easy to keep your home warm without harming the environment; British houses are frequently poorly insulated, wasting money and contributing to global warming.
We will:
- Make sure that repossession is always the last resort by changing the powers of the courts.
- Bring 250,000 empty homes back into use with cheap loans and grants as part of our job creation plan.
- Begin a national programme to insulate more homes paid for by the savings from lower energy bills.
- Make sure every new home is fully energy efficient by improving building regulations.
- Investigate reforming public sector borrowing requirements to free councils to borrow money against their assets in order to build a new generation of council homes, and allow them to keep all the revenue from these new homes. Over time, we will seek to provide a greater degree of subsidy as resources allow to increase the number of new sustainable homes being built.
- Scrap burdensome Home Information Packs, retaining the requirement for homes to have an energy performance certificate.
Clearly what I missed in these words were were the seeds of the most right-wing attack on the principle that the state should provide good quality housing for its citizens, above all for those that cannot afford it themselves.
It is, of course, an extract from the Lib Dem Manifesto for 2010. I’m sure they must have said somewhere that they would accept cutting housing investment by 75%, forcing ever more people on to housing benefit at the point where you’re slashing it to below poverty levels – as they admit themselves.
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The ghost of Christmas yet to come
We don’t often link to the Telegraph on Red Brick. But the sting operation against leading Liberal Democrats has had a focus on one of our favourite topics – housing benefit.
So here is what Business Minister Ed Davey actually said to the undercover reporters on this topic. Hear the tape here.
“Well, their housing benefit cuts, for example, which are going to mean in my view if they go through that some people on the breadline will be put below the breadline. And that’s just deeply unacceptable. There is (sic) five changes to housing benefit, and there are two which I find are unsupportable. One which will come in in 2010-13 where if you were unemployed for 12 months and you still were passing the working test which is actively seeking work – to get jobseekers allowance, which is about £80 a week, something like that, so you can eat you will have to show that you are looking for work…… I don’t understand why you are on the breadline, you’ve been trying to look for work, you’ve been passing all the government tests, and you’re suddenly going to have your rent, which is your highest cost, your help with that, taken down by 10 per cent. No logic behind that whatsoever…. We spend too much on it. It’s pushed up rents and landlords, rich landlords, are getting their pockets filled. So the system doesn’t work, but I don’t think you kick people when they’re down.”
Contrast that with the pugnacious and ever so slightly pompous Mr Davey’s attack on Chris Bryant and Boris Johnson on BBC’s Question Time in October for using the word ‘cleansing’ to describe the housing benefit changes. He said:
“Chris and Boris Johnson should apologise. The language they are using is appalling and I think it is scaremongering and I think their analysis is completely wrong. And I’ll tell you why it’s appalling. I have Kosovan asylum seekers in my constituency who really were ethnically cleansed ….. what is being proposed is nothing of the sort, you should use temperate language and have a moderate and grown up and adult debate…. People will find that 790,000 social homes in London will be completely unaffected. They will find that the vast majority of housing benefit recipients across the country will be unaffected. And yes there will be some but we have increased massively the fund that will assist if there are problems to £140m. And even those people who will be affected, they will be able to find that up to a third of private rented sector homes in London still affordable under housing benefit. Now I’m afraid you are being factually wrong and pandering to people’s sentiment when we’re actually putting in a sensible policy….. The real issue here is that we are proposing after all these changes the state will still subsidise up to £20,000 a year rent in the private sector – £400 a week”.
A few facts
– Many social tenants will be affected by the 10% cut in jobseekers allowance, uprating benefits at less then RPI, and the increase in rents for some tenancies to 80% market rents
– The £21,000 a year cap is irrelevant to most private tenants. Many more will be affected by the 30th percentile rule and the overall benefits cap of £26,000
– The ‘vast majority’ of private tenants will be affected, as the government’s own figures now show.
As an aside, Ed Davey’s rage about the use of hyperbole about cleansing looked synthetic at the time – after all, Lord Turnbull said Gordon Brown was Stalinist – but it looks even odder now that Vince Cable has called the government ‘Maoist’. It seems that comparisons to genocidal maniacs are more common that we think.
We’ve observed before that the more the government accuse the opposition of scaremongering, the more likely it is to be true. Below the breadline…… kicking people when they’re down. Mr Davey’s real views deserve to be heard, and should be acted upon.
Even Ebenezer Scrooge finally repents. If the LibDems stand up for their principles, they might just get to play the part of the ghost of Christmas yet to come.