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Ed Balls’ speech to the House Building Council yesterday was pushed down the news agenda by his own robust rebuttal of Cameron’s slurs on him and Ed Miliband over the Co-op Paul Flowers affair. But that shouldn’t detract from the importance of the speech.
First, let us look at what he said. He reminded us of Labour’s commitment to build up to 200,000 homes a year by 2020 and the various previous promises about the funding of affordable homes. As everyone acknowledges, this is not enough but it would be a significant step forward from where we are now – getting on for a doubling of performance so far under the Tories. He noted that successful previous recoveries from recession have involved substantial investment in new homes, and that housing would be central to his economic policy. He put the case for a higher share of affordable homes.  He set out a pathway to a new generation of New Towns, using the post-War Development Corporation model, backed by Government guarantees and forward funding of infrastructure.
Balls was nuanced in two important areas. First he defended the ‘brownfield first’ policy, arguing that weakening it would run the risk of undermining sustainable development in areas ‘where viable brownfield sites are widely available’. Many commentators take the view that greater use of greenfield land, and indeed green belt land, is essential. In my view, this is all about the terms on which greenfield land is released – and in particular avoiding endless new estates of executive houses like we have had in the past. One way forward would be look at how the rural exemptions policy has worked in the past and seek to apply it to new circumstances.
Second, despite the lazy reporting that Labour now supports ‘Help to Buy’, Balls distinguished heavily between the scheme’s first phase which supported first time buyers and the second phase which gives Government-backed loans to any buyer of property up to £600,000, including those re-mortgaging, which could have a serious impact on prices whilst supply is so heavily constrained.
Balls made much of the two independent reviews Labour has launched: Sir Michael Lyons looking at land supply and land banking, the planning system and the local authority role; and Sir John Armitt looking at infrastructure including drafting new legislation. We need these studies to proceed rapidly.
Overall, the speech represented further steady progress from the position staked out by Jack Dromey during his excellent stint as shadow housing minister. But more needs to be added if the policy is to be sufficiently comprehensive to be capable of meeting the challenge. To get housebuilding moving all the levers have to be pulled not just some of them. That’s why I call it half a policy.
Balls may return to other issues in future, but some of the questions still to be addressed include the following:

• What should be done about property and land taxation?
• How will greater affordability be achieved other than waiting hopefully for extra supply to temper prices?
• Is shared ownership an answer lower down the income scale?
• How can we ensure all sites, or perhaps virtually all sites, have a genuine mix of market and affordable homes to own and rent?
• What should we do with the disastrous ‘affordable rent’ programme which is stretching housing association finances while delivering hopelessly unaffordable homes in many cases?
• How can a genuine ‘benefits to bricks’ policy be developed to prioritise investment and reduce reliance on housing benefit?
• How can we develop policies that fit all of the different regions with their hugely different circumstances?
• The promise of Government guarantees indicates some willingness to lift ‘the dead hand’ of the Treasury, but will Labour commit to ending the cap on councils borrowing for new homes? And will the Party finally grasp the nettle of changing public borrowing definitions so councils can operate more like housing associations – to everyone’s benefit?
• And finally on my little list, how much grant will be available to support new social housing, and at what levels? – without grant to oil the wheels, none of the other policies will deliver fast enough.

Here we go again. This time it’s someone called Mick Kent, £187,000 a year Chief Executive of the Bromford Group (a housing association, built on public funds, who proclaim ‘Our culture: Proud to be different’), getting publicity after writing a letter to Iain Duncan Smith supporting the principles of welfare reform and condemning the social security system as unsustainable and socially and economically damaging.
I mention the salary only because it is amazing how many people earning huge sums feel able to lecture those earning 5% of that about how they should live. His mini biography on their website says ‘he regularly takes the red pill’ with an actual link to the Matrix. Pretentious, that.
Mr Kent’s main point seems to be that he supports the ‘dependency culture’ theories proffered by the now demonstrably incompetent Duncan Smith. Mr Kent takes the view that the allocation of social housing ‘according to greatest need and vulnerability has led to a race to the bottom and a focus on what customers can‘t do rather than what they can do. This in turn has led to the dependency culture and caused deep and untold damage to society’. This piffle could have been copied out of the Daily Mail, circa 2010.
The constant demonization of social tenants as workshy layabouts who should to be forced to work or train as a condition of their tenancy is so far from the truth that it is laughable. It certainly should not be reinforced by those who make a very good living out of their rents. I hate to say it, but the higher up the ladder you go in housing the more often you hear these things said. Perhaps Mr Kent would care to take a sample of his tenants who are economically inactive: take out those who are retired, take out those who are disabled or have a long term limiting illness, take out those with mental ill-health or learning disability, take out those already in training or actively seeking work, take out those looking after young children, take out those who are carers for others, take out those who can only get casual or zero hours contract work, and so on. See what you’re left with and then pass judgement on the tiny remaining number. But never pretend that this tiny group is somehow representative of the whole class of social tenants.
I am not arguing that landlords should stop offering people employment and training opportunities – as Mr Kent has said himself, ‘they have jumped at the opportunities we have offered them’. Quite, that’s my point. People respond to opportunity: otherwise there would be no explanation why there are always so many more ‘workshy’ people in a recession than in a boom.
Some of Bromford’s employment training and volunteering schemes look very good, and I welcome them. It is the conditionality they insist on that is offensive. In my view, there is no justification for general coercion (and no excuse for insulting and superior attitudes).  Like some other housing associations, Bromford make heavy use of short and ‘flexible’ (ie time limited) tenancies, which means the landlord always holds a sword to the throat of the tenant. If the tenant does not comply with the Bromford ‘deal’, it may lead to them ending the tenancy or not offering a new one.
All of this is justified by the ‘dependency culture’ thesis. This is a meaningless phrase that caught on because it was repeated so often in the media, and by people like Duncan Smith and Mr Kent. It is carefully designed to make us think that ‘welfare’ is somehow like dependence on drugs or alcohol, people are hooked and need to be encouraged or bullied out of it. Of course people who live on very low incomes are dependent on the normally meagre benefits they receive. Of course they worry that going into insecure work might make them even worse off. Living on benefits as a ‘lifestyle’ is already extremely hard and the existing regime has any number of punishments like benefit withdrawal. Why on earth should loss of tenancy be added to the list, and why should this only apply to social tenants?
Mr Kent is critical of the implementation of the bedroom tax, but not its principles. He fails to mention the punitive retrospective aspect of the policy. And to show how out of touch he is, he comments: ‘Most of the people who need a spare room due to disability will probably eventually be covered by the extra discretionary money made available to local councils’. This is inexcusably ill-informed and I wonder if he would care to meet the people who are in the first wave of bedroom tax evictions to tell them that.
Rather than commenting on the perceived failings of poor people, perhaps Mr Kent should take a look at the vast fortunes being piled up in this country, people who make even housing association chief executives look as if they are on their uppers. My favourite magazine (not), ‘Absolutely Notting Hill’, this month contains an article by Rachel Johnson, sister of the London Mayor. She talks about the decline of the NH neighbourhood. ‘More often than not’, she says, families that move in come ‘complete with a fleet of cars, trained nannies, housekeepers, nutritionists, private tutors and personal trainers (and that’s just for the dog)’. Life is so hard: she says ‘According to one friend, who has grimly ‘done the math’ … annual household expenditure, just on food, restaurants, education, services, holidays and staff, approaches £300,000 round here’. There are, she laments, now 2 socio-economic groups: the haves and the have-yachts. The article is based on her new book, ‘Notting Hill, Actually’ about the lives of such people. Don’t rush to buy.
The point about people like Mr Kent is that they see the poor as ‘the problem’ that good-meaning people like him have to solve. They seem incapable of seeing the structure of our society, growing inequality, the extraordinary enrichment of the people at the top while the poor are told ‘we are all in this together’, decried as scroungers and punished for being ‘welfare dependent’.
Mr Kent could stand up for his tenants. He could do something useful like condemning the damage being done by massive rent increases and the additional requirement for benefits this brings. Then he really would be different. Keep taking the pills.
 

As the debate over how to build more new homes intensifies, a new report on the politics of housing commissioned by the National Housing Federation takes a long look back over nearly 100 years of housing policy. It seeks to answer the questions: which governments successfully addressed housing supply issues and what factors explain their relative success/lack of success in doing so?
Starting from the premise that recent governments, over the last 35 years, have been remarkable less successful at building new homes than previous ones, the analysis offers a variety of possible explanations.
The authors argue that political debate is driven by voter concerns, and the typical voter is now more likely to be well-housed and to own their own home, to have less interest in the supply of housing for others, and to be more interested in house price growth. They fear that new housing will reduce the value and amenity of existing houses: home owners are more likely to be hostile to new development than existing renters.
In consequence, they argue, the debate has shifted away from housing supply as such to focus more narrowly on the level of home ownership and the concerns of existing and aspirant home owners. As the public has become more apathetic about housing, seen increasingly as a minority or individual problem, so the political parties have reduced their emphasis on anything other than promoting home ownership.
Over the same period the hardening of attitudes towards ‘welfare’ has impacted on social housing, so that ‘housing need’ as a concept has also come to be viewed more negatively. The trend away from subsidising bricks and mortar to subsidising housing costs through benefits has reinforced this change in attitudes, making the income stream on which investment depends vulnerable to general ‘welfare’ policy as well as housing policy.
The housing shortage is less visible than it was in some past times, for example after WW1, with the ‘Homes Fit for Heroes’, and after WW2 when there was an urgent need to respond to the destruction of nearly half  a million homes – and the people had very high expectations of what the state should deliver for them. The post-WW2 ‘numbers game’, during which the parties competed vigorously over housebuilding promises during elections, was ended partly by a feeling that housing quantity issues were being resolved but mainly, in my view, by the financial pressures after 1976 followed by the ideological policies of the Thatcher government.
Non housing factors have had a major influence, especially as the expansion of housebuilding has normally been used as an effective way to help the economy out of recession – until 2010 that is.
There has also been a general ideological shift, affecting all parties, towards market solutions and away from state solutions. Compare, for example, current attitudes to private landlordism following deregulation with those of the 1960s and 1970s, when, following the Rachman and other scandals, the predominant view was that the sector should wither away.
Inevitably the report looks at planning regulation, which it argues has become more complex with a wider range of objectives competing with the housing supply objective and the growing influence of objectors. The authors see the planning system as including perverse incentives to hoard land and discuss the role that land taxation might play.
The authors make the point that uneven regional growth has become more pronounced, making it harder to introduce effective national housing policies that are appropriate everywhere. Although it is covered, I think they underplay the importance of the removal of local authorities as housing developers in the Thatcher era and the failure of the policy that housing associations should fill the gap. There has never been a period of strong housebuilding provision without councils taking a leading role.
Any report with such an ambitious aim is likely to have holes and gaps and to come to conclusions about events that could be interpreted very differently. That is the case here. I think they underestimate the importance of the ideological battles that take place within and around the parties, seeking to lead rather than respond to public opinion. In progressive times, I would point to the influence of John Wheatley after WW1 and Aneurin Bevan after WW2 who not only helpe create the public mood of the times but also showed great personal leadership in driving policies through. They also have little to say about the influence of the media, which I think has been very strong – for example in promoting the ‘ideal’ of home ownership and diminishing social housing. But it is a fascinating and provoking read and an interesting piece of work for the NHF to have commissioned.
I found the section on the implications for current policy a little weak, although I accept that this was not the report’s primary purpose. I would have liked to see more analysis of the era we have entered – are we on the cusp of another major change in public attitudes towards housebuilding as home ownership declines and a tenure that has much less public approval becomes the dominant force in the housing market? They do make an interesting point that, in previous times, shortage was highly visible whereas much of the current debate is about shortages that might arise in the future if we fail to build now – a more nebulous concept.
The report is written by the Social Market Foundation and can also be found on their website, where they also have an interesting animation of housing policy from 1918-2012.

Bill de Blasio, who scored a spectacular landslide victory this week to become the next Mayor of New York, could be an inspiration for Labour, for Ed Miliband and for whoever becomes the London mayoral candidate for 2016. His campaign slogan was “One New York, Rising Together” and he focused on tackling the cost of living crisis, tackling inequality, and increasing taxes on the very wealthy to fund new programmes.

“Make no mistake: The people of this city have chosen a progressive path, and tonight we set forth on it, together.” Bill de Blasio
Standing on a radical affordable housing platform, de Blasio emphasised the dangers of growing inequality and the stark contrast between the wealthy and ordinary New Yorkers who can barely pay the rent. He also focused on homelessness and the growing numbers living in shelters. He tapped effectively into the growing frustration of the city’s residents that NY was becoming a rich person’s city.

• One-third of New Yorkers spend at least half of their income on housing.
• 50,000 New Yorkers, including 21,000 children, live in homeless shelters and many more are turned away.

De Blasio has a track record on housing. He was a regional director of the Department of Housing and Urban Development during the Clinton administration. In various elected and administrative roles, he has taken on negligent landlords (including through the ‘Worst Landlords Watch List’) and campaigned on housing standards, including the right to energy supplies.
De Blasio’s policy commitments centre on providing or preserving affordable housing, arguing that the process of development is reinforcing class segregation rather than weakening it. He argues that the process of ‘rezoning’ should require homes to be built for middle and low income families and not just the wealthy. He plans to direct $1 billion of city pension funds to affordable housing construction. He will raise taxes on developers who keep land vacant waiting for prices to rise, set up a non-profit land bank, and conduct an annual census of vacant buildings. He will campaign to restore rent stabilization and rent increase exemptions and set up new services to help tenants fight evictions. He has promised to tackle the backlog of health and safety repairs to New York’s public housing. He will help small landlords repair their properties and strengthen the homeless safety net with stronger guarantees of access to shelters.
De Blasio intends to lead the US cities in a campaign for a new national urban agenda, including more public housing, low income tax credits and other affordability policies.
The parallels with Ed Miliband’s ‘One Nation’ policies is striking. Like New Yorkers, people in Britain are beginning to realise that letting rich people do what they like and make as much money as they like will never lead to prosperity trickling down to middle and low income people.
The Bill de Blasio campaign website housing section is here.
And his Mayoral transition website is here.
And the New York Times report of his election can be found here.

Despite almost universal objections either to the principle or to the practicalities, the coalition is determined to go ahead with its plan to force private landlords to check new tenants’ immigration status.  The measure is part of the Immigration Bill, due to enter its committee stage in the House of Commons on Tuesday.
The Immigration Bill and its impact assessment seem accurate in what they say about the scale of the scheme: nearly two million private landlords, many of them sole operators and half of whom do not use agents, will need to learn how to make immigration checks on around three million adults who enter new lettings each year.  Given the number of mistakes and the time it takes for the Home Office to make its own immigration checks, you’d think it would be rather less upbeat about how easy it will be for landlords to establish not only an applicant’s identity (which they already often do) but whether they are entitled to be in the UK as a long-term resident. The latter can be far more complicated and not obvious from the paperwork. The clearest warning of impending disaster came from the Immigration Law Practitioners’ Association:
‘We do not consider that the Home Office is in a position to take on a challenge of this scale. We urge caution. This project sets the Home Office up to fail. Again.’
When immigration minister Mark Harper was grilled on these issues by the Bill’s scrutiny committee last week, Pat McFadden MP put him under pressure about the difficult of dealing with less simple cases, for example where someone is entitled to an extension of their leave to remain in the country but they can’t get a reply from the Home Office.  A couple of days before, Katharine Sacks-Jones of Crisis gave a different example of someone escaping domestic violence who urgently needs somewhere to live with their kids, but whose paperwork is still in the ex-partner’s possession.
Harper either has remarkable faith in or is staggeringly complacent about the measures which the Home Office says will address these problems.  There will be an advice service for landlords with a target turnaround time of up to 48 hours and a ‘code of practice’ which landlords are expected to follow. If he thinks these will protect migrants applying for a tenancy, in the dog-eat-dog parts of the private rented sector in London and some other places, he is showing how little he knows of the reality of life in the poorer parts of Brent or Newham.  Perhaps there is a degree of irony in the Home Office assessment of ten minutes as the average time that landlords will take to check more complicated cases: it might take them rather less time than this to decide the prospective tenant is not worth the risk.
It’s unlikely that Mr Harper will take advice from Red Brick on this issue (though he could do far worse), but perhaps he should pay more attention to the views of landlord organisations. Several of them have expressed their fears that landlords won’t be interested in making checks in complicated cases, and in fact will have every incentive not to do so: first because it will take time and may delay a letting, and second because they face a fine of £3,000 if they mistakenly let a flat to someone not entitled to residence. The obvious consequence will be discrimination, not necessarily the result of racism but simply because landlords won’t want the hassle. The National Landlords’ Association said that if getting advice from the Home Office takes the promised 48 hours, ‘in many, many cases the property will have gone by then’.  They are worried that more tenants will have to go to ‘rogue landlords’ and be subject to exploitation:
‘This will leave vulnerable tenants forced into the arms of an underclass of rogue operators, who will not care and certainly won’t inform the immigration authorities.’
The UK Association of Lettings Agents said:
‘UKALA is deeply concerned that the bill’s requirements will further restrict access to housing for people from outside of the UK, or with non-standard requirements. Many areas of the UK have very competitive lettings markets and it is entirely conceivable that landlords will instruct agents to favour those tenants they perceive as ‘low risk’.

Labour has sensibly put down a new clause for the Bill which would require the government to pilot the scheme properly before it can be rolled out nationally. It is vitally important that, if the scheme is to go ahead at all, there should not only be pilots but that the effects on vulnerable people are properly assessed. But it would be even better for Labour to argue that the scheme in practice won’t have much effect in deterring ‘illegal’ migrants at all, since they are unlikely to try to get accommodation from regular landlords. Instead, it is pretty obvious that the measure will make life even more difficult for legitimate migrants who are looking for decent housing; the suspicion is that this is exactly what the government intends.

There has been quite a furore about two council houses that have been sold by the London borough of Southwark. They were, according to Amelia Gentleman in the Guardian, ‘an attractive pair of Grade II listed semi-detached buildings’ near London Bridge and the Shard. Despite Savills claiming that they are the most expensive council houses ever sold, they are in in serious disrepair, nearly uninhabitable. They raised £3 million for the council at auction and are now occupied as a protest.
You can take your pick on the rights and wrongs of this one: the council are either denuding the borough of social housing, according to the campaigners, or wisely cashing in by selling properties they can’t afford to do up to enable them to build 20 more social homes, according to the council.
The fuss draws attention to the madness of the London property market but it is also the extreme end of a growing threat to social housing. While the new development programme is mainly producing unaffordable homes at ‘affordable rent’, the stock of social rented housing being let at target rents is being reduced rapidly without being replenished. Social rented housing is under threat from many directions:

• the Government’s ‘reinvigorated’ (ie give away) right to buy council houses which has increased sales markedly.
• the Government’s ‘conversion’ policy, whereby social rented (mainly housing association) homes becoming available for letting are, in growing numbers, switched to so-called ‘affordable rents’ at up to 80% of market rents.
• many ‘regeneration’ schemes, mainly flatted council estates, where the price of regeneration is the loss of a very large proportion of the social rented homes – because the works are paid for by building for private sale.
• almost all social landlords now have an ‘asset management strategy’ which sounds like a good idea until it becomes a pretext for selling properties, normally the most valuable or the ones needing most repair, in order to fund new development.

Some councils and housing associations use the ‘Made in Chelsea’ argument to justify reductions in social housing – that is, poor people shouldn’t be allowed to live in expensive places. The problem with this rationalisation is that ‘expensive’ now includes much of London and many other parts of the country as well.
Labour is grappling with a ‘benefits to bricks’ policy which will tackle the ludicrous position where 95% of the money spent on housing is in the form of housing benefit and only 5% is in the form of investment subsidies. This is the end result of 30+ years of policy designed to raise rents and to let housing benefit take the strain.
The first clause in such a policy will need to be to stop things getting worse. The only way to make a ‘benefits to bricks’ policy effective will be to bear down on rents in the long term. The prime determinant of rents in social housing should be to cover costs net of subsidy not to bring social homes into line with market rents, which are determined by shortage. A new Labour Government will need to end the ‘affordable rent’ policy because it is making the problem worse.  Homes converted from social rent to ‘affordable rent’ should be de-converted as they become available for letting again. Beefed up regulation should put asset management under the microscope to make sure it is a useful tool designed to grow the stock of social housing not diminish it. Councils and housing associations should be under stronger duties to report on and justify sales. And there should be much stronger scrutiny of regeneration proposals if the outcome is the loss of social housing.
Most people will think the Southwark decision is entirely defensible and a good deal – as long as the 20 new homes actually get built and are let to people in housing need – but it is the sharp end of a very thick wedge. Social rented homes are the biggest asset we have in the fight to meet housing need and it is vital that the stock is protected.

Well, that’s the first 500 posts on Red Brick. That’s quite a lot, more than I imagined we would achieve when Tony Clements and I started the blog off 3 years ago, in response to the General Election defeat, as ‘the place for progressive housing policy debate’. At an average of say 600 words, that’s around 300,000 in total, the equivalent of 3 typical books. Although I do most, Tony and the estimable ‘Monimbo’ have added an enormous amount. Other contributors are always welcome, especially those who can provide different geographical perspectives.
It’s hard to estimate how many readers there are. Getting on for 400 email subscribers, who get every post automatically. Moving towards 100,000 views on the site and there are others who read it through other means. Each post is tweeted to Labour Housing Group’s 3,500 followers. Over 1,000 comments received, with the redoubtable Dan Filson the most regular followed by France’s own Bernard Crofton and a free-thinking Conservative, known as grahamangus, third.
Housing is the theme and we try to stick to that. It would be easy to wander off into general commentary about politics but temptation is there to be resisted. The original intention to be a ‘progressive’ blog, linked to Labour Housing Group but willing to take contributions from a wide range of political positions, has to some extent been stymied by the existence of the Coalition. Red Brick has been hostile not just to the Tories, who have turned out to be more right wing than anyone could have imagined, but also to the LibDems: in housing at least they have failed to act as a brake on the worst excesses of Tory housing policy despite having an excellent party policy.
It’s pleasing that quite a few people enjoy the blog. But it’s a pimple on the face of Inside Housing or the Guardian Housing Network or the bigger Labour blogs like LabourList or LeftFootForward. So why do it? Well, top of the list for me is a 40 year passion for the topic and opinions that need to get out. Blogging is better than shouting at the TV or fulminating in the pub at the latest Tory outrage. And I get a bizarre sense of pleasure from writing a headline based on a Bob Dylan song (‘Desolation Row’ and ‘Dear Landlord’ perhaps being a bit too obvious).
To borrow some jargon, the blog is a way of constructing a different narrative around housing and especially to tackle many of the negative stereotypes about social housing, people on social security, and the rest, some of which, to my great embarrassment, had infected the Labour Party. There is some success to be recorded in terms of raising debate in the Labour Party and prodding it in a more radical direction on a range of issues like borrowing for investment, the ‘benefits to bricks’ agenda, and the virtues of security of tenure.
Will there be 500 more? Maybe. It can be quite hard work. Sometimes the words won’t flow. Sometimes I think it would be easier just to tell everyone to read Jules Birch instead: his posts even have facts in them and he doesn’t rant. It’s tempting to try to comment on everything but it is a blog not a newspaper. I get irritated by good things that appear in my inbox too frequently, so we mustn’t impose. The next target will be to keep going until the General Election so we can see the back of these terrible people. I hope housing will be a big topic in the Election campaign, and if Red Brick can contribute to keeping housing high on the agenda then it will be a job worth doing.
Thanks to you for reading, and contributing, and especially to those of you who go out campaigning on the issues. Because housing really matters.
Steve Hilditch

Naming a storm after St Jude, the patron saint of desperate or even lost causes, felt like overegging it. Weekending in Swanage on the south coast, where the storm passed through relatively unnoticed overnight, I wondered what would happen if we had to face real tropical weather conditions.
However it was the prospect of a very wet Sunday that led me to buy the Observer. Like a lot of Labour supporters I abandoned spending money on the Guardian group after their appalling behaviour during the 2010 General Election. It is true to say that their papers remain the best of an extremely bad bunch, my resolve has reduced with the passage of time, and sometimes it’s nice to hold a real newspaper rather than look at a screen.
Anyway, back to the Observer. It had a lot about energy and a lot about property. One main feature, a strange concoction of mainly anecdotal information on ‘four generation families’, had a large picture of the Windsors, one Queen and 3 future Kings supposedly. My interest was stirred by the fact that, in the photograph, taken indoors, the Queen was not only wearing an outdoor coat but also gloves. I thought that was taking David Cameron’s jumper advice to the extreme.
There was an altogether more serious piece by Daniel Boffey on house prices in the north-east, an important antidote to the rash of recent stories about London. In the north east property prices are continuing to drop, which has broadly been happening since 2007. One contributor said there were property pin-pricks rather than hotspots but there was little evidence to make anyone believe things were going to change anytime soon.
The gap between London property and the rest is clear from this excellent chart by Neal Hudson – @resi_analyst on Twitter. The London prime market explosion is having severe ripple effects, but they don’t stretch as far as the Tees or the Tyne. The super-prime market remains a law unto itself, with an estimated 460 transactions over £5 million and 160 transactions over £10 million in the last year, increases of 20% and 32% on the previous year, according to Savills.
It’s not so much a ripple as a tsunami of price rises spreading out from the centre: the strongest price growth is now in the rest of inner London, in Hackney, Camden, Wandsworth and Lambeth. As the global super-rich squeeze the merely rich out of central London, so the merely rich squeeze out the quite well-off, and so on down the chain.
It is complete madness and the result of the interplay of several long-term factors: the failure of regional policy to promote balanced growth across the country, the general failure of housing supply, the lack of protection afforded to low cost housing in inner London, of which there used to be a lot, and the lack of appreciation that London’s success as a ‘global city’ might just have a downside.
So when he has dealt with the storm named after him, it may just be that housing should be the next lost cause on St Jude’s list.