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No room at the Inn

Homelessness always has a special resonance at Christmas. Yesterday Crisis opened its doors for the 40th year running and will provide 20 different services, including food, accommodation and health checks to over 3,000 people. Crisis’s Leslie Morphy believes the importance of the Xmas service they provide is to help people start the journey out of homelessness: ‘The most important aspect of our Crisis at Christmas work is to help our guests begin to take steps out of homelessness: giving health MOTs, housing and job advice, and encouraging them to come to Crisis Skylight where we can offer year round support.’
Whilst people sleeping rough is the most visible sign of homelessness, countless others do not have a safe or secure home. On Tuesday Shelter revealed that nearly 70,000 children will experience Xmas in temporary accommodation, including hostels, bed and breakfasts and refuges across the country. Shelter’s Kay Boycott says: ‘We cannot underestimate the damage homelessness has on children’s lives. They often miss out on vital schooling because they are shunted from place to place and many become ill by the poor conditions they are forced to live in.’
Over at Pickles Towers, the Government talks the talk about tackling homelessness whilst making things far worse. The homelessness safety net has been reduced, money for affordable housing has been slashed, changes to housing benefit will make many tenants – private and social – much more vulnerable to homelessness, Supporting People work on homelessness has also been slashed. Grant Shapps grabs headlines cynically by announcing a bit of money here and there which doesn’t compensate for what has been taken away. Shapps has the nerve to say that homelessness is lower than in 18 of the last 20 years without acknowledging that it had been going down consistently for many years and has now started going up again. He is an expert at the use and abuse of statistics but even he can’t deny the serious change in direction caused by their policies.
As always Steve Bell sums everything up with his image on the theme of ‘No room at the Inn’ and the ‘Big Society Poor House’.
We wish our readers a very happy holiday and an excellent New Year. We hope you have enjoyed Red Brick’s first full year and found something of interest to read and comment on.
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RTB: not ‘one for one’ and definitely not ‘like for like’.

Yesterday’s publication of the consultation document (and the draft impact assessment) on the Government’s plans to increase the discounts available for the Right to Buy and for ‘one to one replacement’ with affordable homes is about as cheering as the pre-Xmas homelessness figures.
In many ways it’s a clever offer, or a clever bit of spin, in that it appears to deal with previous complaints about the RTB, and especially the lack of replacement of the homes sold, which meant that future generations of potential tenants effectively paid the price for sales.  It remains to be seen whether the proposed rise in discounts – to an upper limit of £50,000, an effective increase from 25% to 50% – will ‘reinvigorate’ the RTB as much as the Government hopes.  They estimate that some 300,000 tenants are eligible for the RTB and have the financial means to exercise it.  But many houses and the more attractive homes have already been sold and there is huge uncertainty over future property values – we are all more risk averse than we were.
A proportion of the additional receipts will be channelled back, either nationally or locally, into further housing provision.  But this will meet only a share of the cost of replacement, which will be variable between regions.  If the additional RTB proceeds only meet part of the cost it cannot be said that the new scheme itself achieves one for one replacement.  Replacement will require the use of other existing resources – land, borrowing capacity, local affordable housing funds (eg from s106 deals) and New Homes Bonus.  These should already be committed to affordable housing provision.  At best this seems like double counting and is more like a sleight of hand.
As a nationally conferred right, RTB sits uncomfortably with the Government’s commitment to ‘localism’.  Few if any local choices are available within the scheme and, given that local authorities are supposed to be in the driving seat of new housebuilding, the Government is reticent about placing the responsibility for replacing the homes sold at the local level.
Councils will not have any choice when it comes to deciding what type of replacement homes should be provided.  By central dictat they will be ‘affordable rent’ and not ‘social rent’.  Given that all of the homes that will be sold will be social rented, even if you accept the ‘one to one’ replacement argument it cannot be said that they are ‘like for like’.  The exclusion of the option to provide social rent is another step in its removal as a form of tenure and its substitution by the much less affordable and much less secure ‘affordable rent’ product.  CLG’s assertion that the provision of ‘affordable rent’ to replace RTB sales will ‘ensure that our ability to meet housing need is not impaired’ is highly questionable.  The misuse and indeed abuse of the word ‘affordable’ is getting worse every day.
The consultation runs until February and it is planned to introduce the new discounts through secondary legislation in April 2012 or shortly after.

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Oh yes he is: Tebbit stars as Jacob Marley

The news that Lord Tebbitt is supporting amendments to the Legal Aid Bill, which brings about huge cuts in entitlement, especially for civil cases, is a good example of a politician following a special interest then realising there is a bigger picture.  Admirably (I assume), he has a long term interest in medical negligence claims made on behalf of children, so he has joined a group of Peers seeking to change the Bill.  The problem for Kenneth Clarke is that a lot of people with special interests, who each oppose his Bill because of the impact it will have in their own policy area, might coalesce into a generic opposition to his main provisions.  Then he will be in trouble.
The Bill will have a big impact on housing and a number of organisations have been raising this for some time, including Shelter, Justice for All, the Advice Services Alliance, Advice UK, and the Housing Law Practitioners Association.  I recommend Shelter’s excellent briefing.  
Shelter estimate that the Bill will mean that around 40% of housing cases will no longer qualify for legal aid, around 42,000 cases, saving a miserable £10m.  Cases that will not qualify in future include damages claims for illegal eviction and many housing benefit cases.  Tenants will have fewer remedies against rogue landlords , and this will remove one of the key deterrents against illegal eviction and harassment.  The exclusion of all benefits work, except where the home is threatened, will prevent early intervention action that resolves problems before they reach the extreme: this has been an important aspect in the improvement in homelessnesss prevention over the last few years.
So in this one case we wish more power to the elbow of Lord Tebbitt.  The old Thatcherite, who did so much damage in Government, has a last chance to redeem himself and do something worthwhile.
I doubt that Kenneth Clarke can or will ever undertake the transformation of Ebenezer Scrooge, but Norman may yet prove to be perfectly cast as the ghostly Jacob Marley.  The hope for Bob Cratchit and Tiny Tim is that the House of Lords contains a very large number of lawyers who seem to be horrified by this attack on fundamental civic rights.

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DWP vs. CLG Again

This exchange in the House of Lords caught my attention recently:
Lord Kennedy of Southwark: So, who’s responsible here for joined-up government?
Baroness Hanham: Dunno, it’s not my department.
 
Actually, that’s not quite what they said. In full:
Lord Kennedy of Southwark: There is also the impact of 80 per cent of market rent, which means that a family of two adults and two children living in the London Borough of Newham needs an income of £48,000 a year to afford a home without claiming universal credit. Does the noble Baroness understand that, because of the lack of joined-up thinking across government and failed policies, hard-working families are paying the price?
Baroness Hanham: My Lords, that scoops up a whole lot of things, some of which are not entirely to do with me. The universal credit is not part of my department, although I recognise that the housing benefit goes towards the contribution of housing facilities. We are trying to provide, and will provide, affordable housing for as many people as we can. The universal credit and the amount of money paid in housing benefit is something that my noble friend Lord Freud will deal with in due course.
 
Over the course of the last few months, we’ve seen how the government’s benefits policies clash with their housing policies.  This is just one example. Lord Freud tells us that housing benefit must be cut for private renters, because it creates too much benefit dependency. Yet, the combination of his welfare policies and the government ramping up social rents creates vastly more benefit dependency in the so-called affordable housing sector – as Roy Kennedy pointed out.
It would be good if there was a parliamentary way for our MPs or noble Lords to get Grant Shapps and Iain Duncan Smith to sit together and explain how their policies add up. At the moment, DWP says it’s CLG’s responsibility and vice versa.
This is too convenient for them.

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Shooting the troubled

Cameron and Pickles finally flipped this week.  Only they could tell the world, without a shred of humour, that they were going to tackle ‘troubled families’ by appointing ‘trouble shooters’.  Of course this might appeal to some of their backbenchers when they have finished with their Nazi-dress stag parties.
When interviewed, Pickles seemed not to have a clue what he was talking about and couldn’t even describe what the ‘trouble shooters’ would do.  Frankly, he didn’t seem up to the task set by Cameron a year ago when he said he wanted to ‘turn round every troubled family in the country’ by the end of the current parliament.
There is of course a serious point here, and no-one would complain about developing the good work done in Labour’s family intervention projects.  But many of the services that are most relevant to these families are precisely those that are being cut as the Government’s deficit reduction plan bites.
Serious doubts have emerged about the figure of ‘120,000 most troubled families’ who ‘cost the state £8 billion a year’.
Who are these families?  Well, according to much of the media, they are the ‘Shameless’ families who live on benefits, refuse to work, don’t send their children to school, adopt ASB as the family sport, etc etc, the typical everyday Daily Mail stereotype of the feckless working class.  John Redwood MP calls them ‘the worst problem families’ who use up ‘a small army of state employees’.  Even the better news organisations said these were ‘dysfunctional’ ‘problem’ families.  Sky News used examples of domestic violence, repeat offenders, people who have been in care, and children excluded from school.
Really, who are these families?  Over at Fullfact they have tried to track down the figures, stretching back to research done for the Social Exclusion Unit many years ago.  The ‘120,000 families‘ figure turns out to be a reworking of the SEU’s estimate of the number of households who scored on five out of seven indicators or disadvantages.  But none of the indicators concerned ASB or criminality or school exclusions or benefit fraud convictions, and it would be possible to be one of the 120,000 without being on out-of-work benefits at all.  The SEU indicators are not measures of bad behaviour but of poverty, overcrowding, disability, mental ill-health and low income as well as worklessness.  It’s not even clear whether we are talking exclusively about families with children at all and whether, for example, older people are included.
Cameron said the Government has estimated how many troubled families are in each area but this sounds like a very dodgy bit of arithmetic, taking an old figure based on different criteria and dividing by the number of local authority areas.  It is very different from having a list of households to work with and councils will struggle to operationalise the new policy even if they wanted to and even if they could afford to.
I’m happy to support more money being spent on co-ordinating services to low income households, although it is the height of cynicism for the Government to expect local government to put in 60% of the cost.  There are a lot of agencies involved offering a bewildering array of services with different eligibility criteria, so better co-ordination and more targeted service delivery seems like a good thing to do.  I suspect however that if the ‘trouble shooter’ starts by assessing the services received by the household then looking at what they need and what they are entitled to the cost will go up rather than down.
The ‘Shameless’ stereotype is now so strong that the automatic assumption in all debates is that it is a true depiction of the workless poor – see the newspapers but also watch/listen to the supposedly intelligent programmes like Any Questions and Question Time which are stuffed full of right wing demagogues peddling these myths.
Family intervention was indeed aimed at the tiny number of families who really could not cope with raising a family and needed intensive (and non-judgemental) support.  But this is not what Cameron and Pickles are up to.  They are on a propaganda mission, to convince the public (with the mighty media machine behind them) that the real issues are fecklessness and inadequacy and not poverty and unemployment.  In short, blame the poor and not the bankers, and certainly not the Tories.
And slightly off-piste: was anyone else rather shocked to hear Boris Johnson on the Marr show this morning say that he expected one nation to drop out of the Euro, but then comment that the upside would be that ouzo would be  lot cheaper.  Hilarious or not, isn’t he meant to be leading our capital city with a little integrity and dignity?  I wonder what the many Greeks living in London think of his little joke?

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Social Tenants' Bedroom Tax: now it’s up to Lib Dem MPs

Yesterday’s defeat of the Government in the House of Lords on the ‘Bedroom Tax’ – the punitive proposal to remove benefit from social tenants deemed to be underoccupying their homes (on very strict definitions) even when they have no possibility of being able to move to a smaller home – gives the Coalition a decision to make.  They can either accept the amendment agreed by the Lords or seek to overturn it when it goes back to the Commons.
The electoral arithmetic is such that the Government will not be able to get this nasty little proposal though the Commons if all Lib Dems MPs oppose it and threaten to join Labour in the voting lobby.  This is what should happen because there is nothing in Lib Dem policy or in the coalition agreement that would suggest they are required to support the Government on this.  Given that Cameron’s favourite game, no doubt learned at his educational institutions, seems to be the ritual humiliation of his fag, it is time for Clegg to make a stand on a matter of principle.
The amendment means that the bedroom tax – loss of £13 per week on average for some 670,000 working age social tenants on housing benefit – would not apply to social tenants with only one bedroom additional to their needs and would not apply unless they had been made an offer of suitable alternative accommodation.
The bedroom tax proposal aims to save some £500m a year on the housing benefit bill, a figure that seems unachievable given that a proportion of households would inevitably become unintentionally homeless at considerable expense to the public purse and a proportion of those having to pay the tax would move into private rented accommodation at higher rents and higher benefit costs.  It has also been argued that it would be counterproductive in tackling underoccupation because it excludes older tenants who are more likely to underoccupy.
Many examples were given during the debate of households that require additional space for entirely justifiable reasons.  Lords also quoted the work done by the National Housing Federation which showed that the number of hosueholds needing to move to one bedroom accommodation to escape the tax would far exceed the total supply of one bedroom properties available to meet all needs.
The whole debate can be found in the House of Lords Hansard .
The amendment was moved in the Lords by Lord Best.  He said:

Under the fierce new test, a family would be counted as underoccupying if, for example, two teenage girls were not sharing the same room, or if an older couple, one of whom is below pension age, have a two-bedroom flat. All those deemed to be underoccupying will have to move and downsize to somewhere smaller. If they do not, even if there is simply nowhere smaller for them to move to, then they must pay the new penalty.
Six hundred and seventy thousand households receiving housing benefit will be caught in this trap, rising to some 740,000 in the years ahead. If they do not move out, they will be charged an average of £13 per week, which will have to come out of their low earnings or their other benefits, which are meant to cover food, fuel, clothing, and specifically not housing. These areby definition very poor households, and the new tax will represent a significant reduction in their living standards.

Speaking in support, Lord McKenzie of Luton said

No one doubts that underoccupation is a problem. We have a chronic shortage of housing stock and a huge demand for affordable housing. Yet the Government’s policy is the wrong way to go about tackling the problem, as it punishes people for housing choices over which they have little control rather than enabling the best fit between the available properties and the needs of households.

Also speaking in support, Baroness Hollis of Heigham said

Grant Shapps said that we should not bully people out of their homes. He is right. Yet in this Bill we are saying to people who have lived in their homes all their lives, done what was asked of them and behaved responsibly-two-thirds of them having some disability-that their benefit is being cut from underneath them through no fault of their own but just because we in Westminster are changing the rules. We tell them to downsize while knowing that they cannot do so, so we fine them instead for what is not their fault and for what they cannot change. It is morally wrong to punish people for something that is not their fault and to punish them when they are innocent. That is not decent, it is profoundly unfair, and we should not do it.

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The Candidate who kicked the hornet’s nest

Ken Livingstone’s ability to get major political issues aired and debated was demonstrated again yesterday with his speech on housing, which focused mainly on the private rented sector.  He raised 2 key proposals which have got extensive coverage, for example here and here and here.
First, that he will launch a campaign for a London Living Rent.  Possibly mischievously this has been interpreted as calling for a rent cap or rent control, but it is a different concept.  It is about launching a campaign to raise the issue of excessively high and unaffordable rents, to undertake research into what is genuinely affordable compared to incomes, to set a benchmark against which real rents can be compared, and to develop ideas for future regulation.  He argued that no one should pay more than a third of their income in rent (the traditional measure of affordability used extensively in the past is 35%, and there is more debate to be had about the precise level), and that rents had risen by 12% in the capital last year with no benefits for tenants in terms of improvements in the quality of the housing provided.
LLR obviously has parallels with the London Living Wage, which started as a campaign arguing that the minimum wage was unacceptably low given the costs of living in London, then gained traction when it was endorsed by Ken as Mayor and others, then developed into a reference wage now used by many employers.  In that case, no legislation was needed, no mayoral powers were needed, but the campaigning skills of London Citizens, the mayor and others made a huge difference to the living standards of many people on low incomes.
Ken made the point that rent control has served some cities well, and cited New York.  Research published last month by LSE showed that the countries with the most successful private rented sectors, like Germany, embrace both a measure of rent control and a stronger degree of security of tenure, which give confidence to both landlords and tenants.  In London, excessively high rents fuel inflation, firms have to pay more to attract staff and the high cost of living remains a key barrier to London’s economic growth.
Of course Boris Johnson made asinine comments in reply.  He says the mayor has no powers in relation to this, but fails to recognise that Ken achieved huge amounts in housing in London between 2000-2008 despite having few housing powers – he made advances by showing leadership and by using his planning powers in innovative and dynamic ways.  Johnson achieves less despite the fact that he has stronger powers; regrettably they are not applied to serving the interests of Londoners.  He also, equally ignorantly, said that rent control would dry up the market, but the evidence from major cities elsewhere shows that this is far from the case.  The truth is that he is a laissez faire politician who believes in letting the market do its thing, whatever the cost to Londoners.
Ken’s second proposal was to establish a non-profit lettings agency.  Although working across the spectrum of private renting, the agency would be likely to focus on the housing benefit market. As landlords become more resistant to taking tenants on housing benefit because of their fears that they will fall into arrears following the cuts to local housing allowance, the aim of the agency would be to put ‘good tenants in touch with good landlords’ to help modernise and professionalise the sector, and to cut costs for both sides.  It would help develop smart regulation of the sector based on accreditation, licensing, enforcement of standards, and tenant deposit protection.
There is increasing anger at the role of agents in the housing market.  Some are members of regulatory associations and try to provide services against a decent code of practice.  Others are not, and encourage what Ken called ‘the churn and burn approach’.  Agents get paid more for finding new tenants and rents tend to rise fastest when there is a high turnover – decent landlords tend to reward decent tenants by not increasing rents as fast as they would for a new tenant.  The role of such agents therefore undermines the fair operation of the market, leads to unnecessary churn, and doesn’t even benefit landlords because they end up having to cope with void periods when no rental income is coming in.
Johnson again was against this.  Just as his government has made clear it is on the side of the bankers versus the people, he is on the side of the estate agents versus the tenants.  He has nothing to offer private tenants, and the fact that Ken has made the running on housing just as he has made the running on fares is a good sign that Johnson might be on his bike come May.
Ken has played a huge part in politics for a long time because he is willing to kick the hornet’s nest and provoke a real debate about the big issues that face ordinary people.  The housing hornet’s nest has been waiting to be kicked for a very long time.

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Direct pension funding of social housing

Last week we carried a piece by Graham Martin called Funding affordable rented homes – are Insurance Companies the answer?  about the interest being shown by Insurance Companies in getting into the affordable housing market, and the innovative ways of structuring loans that might make investment a realistic proposition.  Here Peter McCormack, the Chief Executive of Derwent Living, explains how they blazed this trail. 
Derwent Living, a registered housing provider based in Derby, was the first organisation to get direct pension funding of social housing. In September 2011, Aviva’s own staff pension fund invested £45m to enable us to purchase 850 tenanted social rented homes from the Home Group. This was part of a larger portfolio of 1150 homes which we bought.
The funding mechanism is based on a sale and leaseback over 50 years. Derwent pays an annual lease premium to Aviva and this rises at RPI each year. The starting cost of funds is 3.9% and if RPI averages 2.5% over the 50 years the cost of funds is circa 5%. The properties revert to Derwent as freehold at the end of the period. Tenants are fully secure as assured tenants of Derwent Living. Aviva is not interested in day to day management and only requires that the total size of the portfolio is maintained leaving us to substitute properties and manage assets as necessary. Aviva have launched a £1 billion fund.
At a time when conventional borrowing is expensive and comes with onerous conditions this is a valuable new source of funding. It does not require asset cover and for Derwent gives us a more balanced loan portfolio where we already have £300m of loans with conventional funding.
Derwent was able to make this breakthrough because of our longer term relationship with Norwich Union then Aviva where we used sale and leaseback for market rented housing and invested in a Jersey based Unit Trust run by Aviva to provide student accommodation. These successful enterprises gave Aviva the confidence to work with us on social housing.
We do plan to try and use more Aviva funding for new affordable housing. Unfortunately the HCA only awarded us funds for a 123 unit programme, however we will use our commercial profits of circa £2m a year to cross subsidise and provide a further 500 homes without public funding.
Derwent may be a model for the future where 40% of our turnover is ‘commercial’ enabling us to work without public money!
Peter McCormack

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A reminder of the key problem

I was critical of Channel Four’s Great British Property Scandal for obscuring the real housing problem: supply of new homes.
The media, along with the government, the house building industry, local authorities, mortgage lenders all share some blame for this. However, it seems to me more and more that these institutions are the wrong targets.
The biggest barrier to new homes is the public – an awkward and uncomfortable fact for housing campaigners because it’s always easier to blame the government, the media and private companies.  
People don’t want new homes to be built anywhere near them. Here’s a quick reminder from a presentation by Ben Page from MORI:
 
83% of people think there are too few homes for local young people. Only 18% of people believe we need to build more homes (in this case in Essex).
Unless we can convince enough of our fellow citizens that we should build more homes for those who need them and that in doing so we benefit everyone, there will not be the significant change we need.
And at the moment no policy seminars, round-tables, lobbying meetings, think-tank pamphlets show signs of recognising or achieving this.
Could there be a different way forward?
Could the various housing bodies re-orientate their campaigning away from government and policy towards changing minds in communities where new homes could be built? Could the housing charities employ community organisers to run local campaigns and in the process find out what type of development and on what terms people will accept? Could housing associations join them – and perhaps rather than spending quite so much trying to influence political parties, try to influence local communities where they want to build homes?
It would be great to see in the next housing pamphlet produced by a think tank a serious piece of research about how to overcome public opinion against new homes.
The Labour Party too has an important role in doing this.
I read recently that in rural Essex in 1946 the Labour Party conducted a successful campaign among local farmers, labourers and aristocratic landowners convincing them of the advantages of thousands of new homes in a brand new town. Without any legal challenge, a Development Corporation compulsorily purchased 2,588 hectares of Essex countryside and Harlow now houses 80,000 people*.
It can’t be impossible.  
 
*Though it could still do with a good few extra homes to house them all well.

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Is Britain becoming the Daily Mail society?

It was striking to watch Question Time last night and see how the debate about unemployment turned round when one of the participants mentioned that Job Seekers Allowance is £67.50 per week.  Constance Briscoe, a rather unpleasant right wing judge, who had been making extraordinary generalisations about subsidising those who don’t want to work and the ‘something for nothing attitude’, was close to being silenced by this one little fact.  Her well-known book, Ugly, tells her story of a hard childhood, but seems to me to also be an accurate description of her opinions.
Harsher attitudes towards the poor and unemployed were a theme of the week, and seem to be growing in strength according to the latest British Social Attitudes Survey.  Views such as the poor are lazy, benefits are too high, child poverty is the fault of the parents, seem to be on the rise.  It showed that 54% of the public believe jobless benefits are too high and thereby discourage the unemployed from finding work, up from 35 per cent in 1983, the first year of the survey (coincidentally just after a recession and with Tories in power).
I suspect the outcome would be different if for every appearance in the media by a Constance Briscoe there was a Mehdi Hassan (of the New Statesman) who put up a stout defence of the poor on the programme.  But the constant drip feed of Mail/Telegraph/Sun etc stories about benefit scroungers and the dependency culture, duly repeated on TV by leading broadcasters, means that the conventional wisdom is that it must be true.
The Social Attitudes Survey asked some questions about housing, but there were only one or two surprises.  Opposition to new homes ‘in your local area’ is greatest where the shortages are most severe, rising to over 50% in the south and outer London.  But, interestingly, only 20% maintain that no new housing is needed in their area.
Whilst the preference for home ownership (if affordable) remains as high as ever, when asked about the tenure of the homes that should be built, the results are unexpected:
Tenure of new homes needed                                                                        %
No new homes needed                                                                                  20
Homes to buy                                                                                                  27
Homes to rent from private landlords                                                         8
Homes to rent from local authorities or housing associations             39
Homes to part-own and part-rent                                                              25
So, despite all the propaganda against social housing, the public are in a surprising place, recognising the need for social rented housing above other options.
The tenure the Government is trying to destroy, social renting, is wanted most by the public.  And the fastest growing sector, private renting, is the least loved.  That’s food for thought for Jack Dromey as he gets to grips with Labour’s housing brief.