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Healthy Homes for Healthy Lives: How Specialist Housing Can Address the Ageing Population Challenge

The UK is getting older

The UK has a rapidly ageing population – a growing demographic that will only put further pressure on our already desperate housing crisis. It is projected that, by 2039, the number of people aged 75 and over will double from 5 million to nearly 10 million.

Over recent years, the Government has focused policymaking on specific reforms to help younger people get onto the housing ladder; or, in some cases, they have actively abandoned any progressive housing reform at all. Schemes such as the Help to Buy ISA and Help to Buy Equity Loan threw a lifeline at those first-time buyers looking to get their foot on the housing ladder amidst a backdrop of austerity and a squeeze on the public purse. However, in this focus, the Conservatives have failed to properly address the vulnerable, rapidly ageing population who are unable to pursue the specialised housing they need.

Recently we have seen the need for a better approach to older people’s housing championed within Parliament and the establishment of the Older People’s Housing Taskforce, a joint effort from the Department for Levelling Up, Housing and Communities and Department of Health and Social Care. However, with the change in Housing Minister once again and the looming General Election next year, the Taskforce is unlikely to make the necessary progress to address older people’s housing challenges. Research from the National Housing Federation (NHF) argues that we need 38,000 new homes for rent for older people each year; much more than the 8,000 we are currently achieving.

Specialised social housing for older people is an important and necessary way to ensure that older people can live in homes that suit their needs, and to address vital health concerns. To address this, the next Labour Government will need to implement a significant programme of building for older people, embedded across two key commitments made at the 2023 Labour Party Conference: Angela Rayner’s commitment to building 1.5 million new homes, and Wes Streeting and Andrew Gwynne’s 10-year plan for a National Care Service.

What can Labour do about it?

Labour have recognised the need for adapted housing and have included provisions for this within the National Policy Forum document. However, whilst this is useful, there remains a need for large-scale development that can provide the need for housing at scale and foster communities.

This is where a partnership in Birmingham may provide the outline to give Labour a big step up in achieving its ambitious home ownership target whilst pursuing a deeper social cause

An exceptional scheme

In 2004, when Birmingham City Council was looking at closing 29 care homes that had become unsustainable, they pursued an alternative programme that would address the shortage of care options whilst increasing provision for older people on middle incomes and those requiring social housing. The programme was not only aimed at meeting the needs of older people, but also those in Birmingham seeking family-sized homes, as the initiative sought to release these back into the market, including social housing underoccupied by older people.

The resulting partnership with the ExtraCare Charitable Trust saw a £200 million strategic programme to build five large scale Integrated Retirement Communities (IRCs) in Birmingham: New Oscott Village in Erdington , Pannel Croft Village in Newtown, Hagley Road Village and Bournville Gardens Village in Edgbaston (pictured) and finally Longbridge Village, completed in 2017. Homes became available for outright purchase, shared ownership purchase and affordable/social rent.

In total, the partnership resulted in a total of 1,168 units being built in five retirement villages.

Of these, 30% were for affordable/social rent, freeing up 342 units of social housing that were previously underoccupied for families requiring accommodation, providing a solution to both meet the needs of the ageing population and address the housing crisis facing younger generations.

The partnership also supported Birmingham’s diverse population. 70% of Pannel Croft’s residents are from Afro-Caribbean backgrounds, helping to facilitate a community for the older Afro-Caribbean population in Birmingham.

The subsequent health and social care benefits of the partnership, confirmed by a longitudinal study conducted by Aston University, resulted in savings for Birmingham City Council in social care costs, savings for the local NHS in Birmingham and savings for older people living in these IRCs – highlighting how increasing such partnerships can address both the housing and care challenges of an ageing population. The partnership also helped the Council to reach its own Health and Well-Being Board targets, with a 38% overall reduction in NHS costs and a 46% reduction in routine and regular GP visits for those living in the IRCs. Replicating this partnership across councils nationwide would tie in perfectly with Labour’s aims for both large-scale housebuilding and a National Care Service.

What next?

This example also demonstrates the wide-ranging socio-economic benefits that the building of social and affordable housing brings. By rolling out this partnership on a larger scale, Labour can facilitate a cyclical housing market where all older people who wish to downsize and move into accommodation such as IRCs can do so, and younger people and families can access family-sized homes. The role of IRCs in Labour’s National Care Service was noted in the Fabian Society’s recent report on this topic, which noted that “a major expansion of housing-with-care and supported living schemes” should be a “high priority”, recognising that “the UK has far less specialist housing for older people than many comparable countries, and what is available often does not provide sufficient support to prevent care home admissions when people’s needs grow more complex”. To remedy this, Labour should mandate that all local authorities have an older people’s housing plan which specifically mandates for provision of specialist housing and care for elderly.

Going further, Labour have recognised the urgent need to release parts of our greenbelt for development. Labour should aim to strategically release large parcels of land in conjunction with local councils, specialist housing providers and developers to develop these sites. In areas around cities, this could involve greenbelt land, allowing residents within cities to downsize and release valuable housing stock within urban centres.  By pursuing this, Labour would be bringing more homes back into the market, helping a vulnerable demographic and providing solutions to both councils’ rising social care costs and our ever-growing housing crisis.

Joshua Lee works as a Senior Researcher for Henham Strategy where he specialises in housing and planning policy.

Sarina Kiayani is Policy and External Affairs Manager at ARCO and sits on the Fabian Society Executive Committee.

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Rent to buy: the home ownership model with untapped potential?

The Levelling Up, Housing and Communities select committee is mid-way through an inquiry into shared ownership, which includes looking at the barriers to achieving full home ownership under the model and whether it is genuinely an affordable route to owning a home. Delve deeper into the terms of reference and it asks an interesting question: “are alternative schemes such as ‘Rent to Buy’ viable and do they offer more value for money?”

Rent to buy is not a new concept – the Coalition Government launched a £400m Rent to Buy scheme back in 2014 – but it has never really taken off in the way that other schemes to support first-time buyers have. From our experience on the ground, however, it feels like the tide is finally turning in favour of the tenure as more providers enter the market and an increasing number of local authorities adopt it as part of their housing mix. 

This is perhaps a result of increasing recognition that the model has the benefit of tackling two key problems at once: in the vast majority of cases it provides new affordable homes to rent, whilst also providing a realistic route to ownership.

The Government describes Rent to Buy as helping tenants to save for a deposit to buy a home by offering properties at a discounted rent, normally 20% less than market rent.

Historically, it has been seen as a ‘niche’ product and there has been limited availability of it across the country, perpetuating the lack of awareness of the offer. 

Now, with new entrants to the market, the sector is growing, but the challenge is that it is not homogenous. There are rent to buy products delivered by housing associations as part of their affordable rent provision; privately funded models that are included in local authorities’ affordable home ownership offer; and then rent to buy products that aren’t badged as affordable housing at all but are instead delivered as market homes. Muddying the waters further, the length of the rental period varies depending on the scheme – the 2014 scheme had a minimum of seven years renting, whilst the government website now states an initial rental agreement of just two. Some, like ours, offer a gifted deposit to add to renters’ savings, whereas others use the rental payments to count towards buying the property. This makes the sector hard to define in planning policy and confusing to navigate for local authorities, who are understandably wary of new providers in the market. Often, it is easier to stick to doing what they know. 

However, as the cost-of-living crisis continues to bite, it is an attractive offer for renters who are struggling to save for a deposit and meets a major need in the market. Importantly, we have seen that it can successfully turn renters into homeowners.

As Keir Starmer looks for tangible ways to deliver Labour’s commitment to becoming the party of home ownership, he would be wise to look at how he can support growth of the rent to buy sector. 

First and foremost, we know that saving for a deposit is one of the main challenges to getting on the housing ladder. In June, Zoopla found that the average deposit paid by a first-time buyer was £34,500, rising to £72,000 in the South East and over £144,000 in London.   

For those who can’t rely on the ‘bank of mum and dad’, the difficulty is that often there is very little money left to put aside after paying rent and other monthly bills. The English Housing Survey notes that half of renters – some 2 million households – don’t have any savings at all. This rises to three quarters of those in the social rented sector. 

This leads to a situation whereby the majority of first-time buyers come from the top two highest income groups, pricing out our nurses, teachers, retail and hospitality workers. This should not be the case. Workers across all income brackets should have a realistic prospect of being able to buy a home where they live. And we know that this is what they want; the aspiration to own has been constant at around 9 in 10 people for many years.   

Labour will not be able to increase levels of home ownership and social mobility unless it addresses the deposit barrier. Rent to buy models do this in a way that Shared Ownership does not, by enabling tenants to move into the home that they will one day own without having to pay a deposit upfront, and instead being given the time and support to save for this. 

The latest figures show that the average deposit for an initial equity stake under Shared Ownership was £20,800, putting it out of reach of the half of renters without savings. There is then the challenge of having to ‘staircase’ to full ownership, and the costs associated with this. Currently, comprehensive data on how many people reach full ownership and the time taken to do so does not exist, however, the House of Commons Library notes that the number of households staircasing to 100% in 2020-21 was equivalent to just 2.3% of all shared-equity homes owned by housing associations.

Homes England similarly does not collect post-sales information on grant-funded rent to buy homes; however under our model, 95% of renters have successfully become homeowners with a high street mortgage at the planned point. 

On the question of whether rent to buy offers good value for money, we and other privately funded providers have proven that it is possible to deliver affordable home ownership products entirely without grant. We are fully funded by institutional investment such as major UK pension funds, meaning that there is no cost to the public purse whatsoever. As well as bringing more funding to the sector overall, using private investment to deliver affordable home ownership products enables local authorities to direct their grant funding to deliver more social housing; a win-win. This is an avenue that the Party seems interested to pursue, as the NPF document outlines that Labour will “encourage more private investment, properly regulated, in new supply”. 

Rent to buy’s challenge is not that it is unviable, but that it has been small-scale and is not well known. With Help to Buy having ended, now is the time for it to be brought into the limelight and promoted as a major route to home ownership. Such a campaign from a future government would help boost local authority confidence and acceptance, encouraging more providers to the market and in turn increasing home ownership. 

In addition, whilst privately funded providers do not require government grant through the Affordable Homes Programme, one of the main challenges is that local authorities are often reluctant to accept providers that are not government funded due to uncertainty over their standing. A Homes England equity programme for the rent to buy market would help to provide local authorities with confidence that the models had government support and had been assessed for quality and viability.   

Following the G15 landlord Metropolitan Thames Valley Housing entering the rent to buy sector for the first time earlier this year, Inside Housing wrote: “Rent to Buy has been touted as a model that could replace shared ownership as the dominant affordable-ownership tenure.”

We believe that it can and that the Labour Party should be looking at how to make the most of its untapped potential. 

Steve Collins

Steve is the Chief Executive at Rentplus, and has worked for more than 25 years in both public & private housing and development sectors

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Forgotten Generation

“We are on our knees in terms of the housing crisis. I have worked in this sector for 35 years and this is the worst I have ever seen it”

 Fiona Fletcher-Smith, chair of the G15 group

To remedy what is already a catastrophe, we need to activate a national housebuilding programme to deliver the housing that the country needs now and into the future. It is only at this scale and by targeting the housing shortfall and needs of the country that we will stand a chance of providing the housing solutions this and future generations deserve.

Simply put, we need a lot of every type of housing, but mostly housing that is affordable, sustainable and secure. The housing we need is not being delivered due to a constrained planning environment, market conditions and funding complications. This is exacerbated by poor governmental leadership – 16 Housing Ministers in 13 years is not helpful. Institutes are unable to enact the measures needed due to being too risk averse and unable to support the affordable housing sector as they should.

Homeownership rates among 19-29 years olds fell by two-thirds over the period 1989 to 2013, from 23% to 8%. The housing shortage is also leading to an increased number of concealed households, with the number of adults living with their parents rising to 4.7 million in 2021, an increase of 700,000 compared with a decade earlier.

For younger people this is yet another setback in a long line of measures that are holding them back – lower relative incomes, rising housing costs and student loans. Not only is this having a significant impact on their short- and long-term life options, it also directly impacts on national productivity as younger people are held back in their careers due to their immobility.

In many areas of England, younger working people are often not eligible for, or are unable to secure, social rented homes. Due to a lack of affordable supply, home ownership or rental is beyond their financial reach too. 

Set against median incomes, we can see that most forms of affordable (intermediate) homes are out of reach to people under the age of 35. This pushes more and more people into living in overcrowded or inadequate homes.

Chart 1 – The chart above shows what households should be spending on housing costs (green bars) based on the latest ONS data for median incomes against what is charged (blue bars). The affordable threshold for housing cost is calculated at 40% of net income (London Plan), which is the criterion set for affordability. It is 30% of gross income (Manchester housing strategy). The housing costs above are taken from actual housing offers around London and represent typical costs. It clearly shows that for people on median or lower incomes, they must exceed allowances to afford a home.

The Government states that you can buy a home through shared ownership if both of the following are true:

  • your household income is £80,000 a year or less (£90,000 a year or less in London)
  • you cannot afford all of the deposit and mortgage payments for a home that meets your needs

Yet, there is a huge gap between incomes and housing costs. The median incomes for all people aged between 30 to 39 (2020 ONS), in England was £32,259 – dropping to £27,087 for women, who make up the nearly two thirds of people buying shared ownership homes. Even with London weighting, this is a far cry from what is needed to buy a Shared Ownership or Discounted Market home in London which require incomes above £48-63,000 as shown below. A report from UCL illustrates that over the last 7 years, the value of the staircased share has increased by 60% implying that shared ownership is becoming less affordable.

Chart 2 – Example of typical incomes required for Shared Ownership Homes in London.
Chart 3 – Example of typical incomes required for Discounted Market Sales Homes in London.

The result is that well over 50% of younger working people, regardless of their jobs, do not have access to any independent housing options – this is a terrible situation and it is only getting worse. We are not building enough homes and not the right types of homes either.

To overcome the disparity between income and cost, we need to greatly increase housebuilding. We need to look beyond housing types and focus more on whether they are actually affordable to people. Too many people are getting further into debt and spending far too much of their income on housing and energy rather than wellbeing and their prospects.

There are a number of housing models (discounted rents or fixed shared equity) that can ensure affordability, but we are not providing anywhere near enough of these homes. Affordable housing providers and Local Authorities, if given the right levels of support, funding and expertise, can make significant inroads into delivering the homes we need. All suppliers of affordable homes should be supported with access to appropriately priced land and funding.

With the right housing policies and structures in place we can deliver the homes we need that are affordable, safe and protect us from the climate. We need stability and a determination to resolve the housing crisis. We can then aim to make housing a human right and begin to address the shortcomings set in front of younger people.

Pieter Zitman is an affordable housing provider and champion. He recently founded a Bursary to support disadvantaged architecture students in South Africa.

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Shared Ownership: The Consumer Perspective

Shared ownership sharply divides opinion. Is it a “great product” as claimed in a Shared Ownership Market Review 2020? Is it a ‘scam’ – an accusation that at least one housing association apparently feels obliged to counter on their website: “Rumour has it though… Shared Ownership must be a scam – it seems too good to be true!” Or does the truth lie somewhere in-between?


It’s undeniable that many shared owners are extremely happy with their home purchase. And yet… In December 2021 Housemark published analysis revealing that only 57% of shared owners were satisfied with their landlords.

My report – Shared Ownership: The Consumer Perspective – explores gaps between aspirations and outcomes. It does so by assessing claims made for the scheme: that it is affordable, a pathway to full ownership, fair, user-friendly and a good product for the market to deliver. The report concludes that, despite the benefits of the scheme, there are also hazards arising from the characteristics of targeted homebuyers, the complexity of the model and of ownership structures, a lack of standardisation and consistency, inadequate information provision and weak regulation of marketing and delivery.

Here I touch briefly on three key underlying themes: long-term outcomes, consumer protection and value for money.

Long-term outcomes

Somewhat surprisingly for an affordable housing scheme launched over four decades ago, there are significant gaps in national data. How many shared owners staircase to 100%? (Excluding ‘back to back’ sales where a homebuyer purchases 100% by purchasing the shared owner’s share and the landlord’s share at the same time.) How many transition to full home ownership via a gain on sale? Is shared ownership financially sustainable over the long-term? What are the whole-life costs, and what are the opportunity costs if shared ownership turns out to be significantly more expensive than buying on the open market?

And without this information how can we possibly evaluate whether shared ownership is delivering for entrants to the scheme? Consequently the report recommends that Government and the Regulator of Social Housing undertake robust data collection, evaluation and reporting on the outcomes that matter to shared owners themselves: ongoing affordability and/or transition to full home ownership.

Consumer protection

Shared ownership can be tricky to get to grips with. The costs aren’t ‘shared’ and it’s not exactly ‘ownership’ either. Moreover, the ubiquitous marketing slogan – ‘part buy, part rent’ – was recently deemed to be misleading by the advertising watchdog, the ASA.

The ASA also found that adverts that do not “include material information relating to the costs of extending a lease” are likely to mislead. How many shared owners didn’t receive the facts they needed at the point of sale in order to make informed purchase decisions, taking into account likely future lease extension costs?

Of course, it’s impossible to turn the clock back. But many shared owners now face a double whammy. If they can’t afford to extend their lease, even selling may not provide the panacea they hoped for. The new model for shared ownership, quite rightly, requires a significantly longer 990-year lease term. But this could create a two-tier market further disadvantaging existing shared owners. Surely it’s only right to level the playing field by funding lease extension at a nominal flat fee for all those shared owners persuaded to buy a short lease and not informed, at the time, of the implications.

The complexity of shared ownership means that sometimes even the experts get it wrong. It’s an open secret that many shared owners have overpaid Stamp Duty Land Tax (SDLT) on simultaneous sale and staircasing. Unfortunately, HMRC currently imposes a 12-month deadline for refunds of SDLT overpayments meaning shared owners could unknowingly be left out of pocket as a result of incorrect professional advice. It’s a situation that clearly shouldn’t be allowed to drag on.

Value for money (VfM)

Value for money for shared owners

The Government’s annual rent review policy ensures that shared ownership rent rises faster than inflation, on an ‘upwards only’ basis. Hence Savills’ assessment that – although shared ownership provides the cheapest entry point into home ownership – ‘monthly costs will rise faster than for full ownership’ which ‘ultimately leads to shared ownership becoming more expensive than full home ownership by the end of the mortgage term’. Many shared owners also report rapidly rising service charges.

As one shared owner explains in Shared Ownership: The Consumer Perspective: “I had to pass an affordability test with the housing association initially to see if I could afford to pay for the share of the flat and its associated costs. But now, nobody cares whether I still can afford it. If I could sell, I would… but I cannot. Absolute and utter madness.” 

Staircasing can also represent poor value for money. Unlike other instalment payment schemes where the initial cost is spread over a number of payments, shared ownership requires the prevailing market rate to be paid for each and every share. If property prices have increased since they bought their initial share, shared owners could pay considerably more in total than had they been able to afford to buy that home on the open market in the first place.

Value for money for taxpayers

Only around half  the shared ownership homes built to date remain categorized as shared ownership. Staircasing to 100% is, in some respects, a measure of success. It was, after all, the original intention that homebuyers purchase their home in full.  But 100% staircasing could be argued to be counterproductive in transitioning scarce social housing stock to the open market. As one senior housing professional pointed out on BBC Radio 4’s Money Box in 2020. “How high would you want those figures to be because what you’re doing is you’re losing affordable stock if people staircase out to 100% all the time.”

There appears to be even less justification for transfer of social housing stock to the open market via ‘back to back’ sales. What’s the likelihood of those homes ending up in the private rental sector, possibly subject to the unaffordable rents that drive many households to shared ownership in the first place?


The Shared Ownership: The Consumer Perspective report is aimed at decision makers in government, its agencies, regulators and housing providers, and makes a total of 18 recommendations. The Executive Summary and full report are available here.  A suggested donation of £8.50 helps support the Shared Ownership Resources project.

Sue Phillips (FCCA) is a writer, retired charity finance manager and former shared owner. She launched Shared Ownership Resources in 2021.

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Setting the right housing targets will be critical for Scotland

Unlike in England, where the new Government has denounced housing targets as Stalinist in another sign of an uneasy relationship with its own 2019 manifesto (300,000 a year were pledged), the question of how many homes Scotland needs and where to put them is a live policy debate. The National Planning Framework 4 (NPF4), expected to be laid before Parliament this year, will set out for each local authority a minimum requirement of the number of homes for which land should be made available. 

This important decision has taken on added salience because of the cost of living crisis. High rents and massive mortgages have left us little capacity to absorb economic shocks, whether external such as energy costs or the self-inflicted hike in mortgage rates following the budget announcements. Ensuring sufficient land is available for housing is crucial to bringing housing supply and demand into better balance and thereby improving affordability. It is also critical in ensuring there are enough shovel-ready sites to realise the Scottish Government’s commendably ambitious target of 110,000 new affordable homes between 2022-2032.  

Housing targets are partly a practical necessity (aligning housebuilding with infrastructure) and partly a democratic middle ground which balances competing interests. These attributes may not endear them to those seeking ideological purity, but they chart a course through undesirable alternatives. Targets are a compromise between a libertarian free-for-all, where people can build wherever they choose, and an exclusive, communitarian beggar-thy-neighbour approach, where those fortunate to live near undeveloped land in and around cities and towns are able to exercise an absolute veto over its use. The former fails to recognise people’s desire to shape, debate and influence what happens in their local area. The latter fails to give voice to families seeking a home of their own, which meets their needs and aspirations, and most of the population who consider we are facing a housing crisis.  

The housing crisis, while national in nature, must be solved on individual sites across the country. Without a clear target which local authorities are required to meet there will be a high risk of vocal local objectors successfully lobbying Councillors to prevent housebuilding. While those in need of a home make their voices known at a national level (evidenced by the prominence of housing issues in political debate) they do not, and cannot be expected to, lobby in favour of specific developments. Objectors and those commenting on planning applications play a valuable role in the process but without housing targets representing those in need of a home there would be a clear democratic deficit in planning for housing. 

Because land for housing is rationed in this way, unlike the inputs for the other of life’s essentials, it is critical that targets are as accurate as possible with sufficient tolerance for changes over time. The risks of setting targets which are too low are profound – placing upward pressure on affordability and leaving local authorities chasing scarce land at high prices to deliver their affordable housing. 

The Scottish Government is right to set out targets in NPF4. However, the figures in the 2021 draft are based on a flawed default methodology. The defaults have been changed in response to evidence submitted by some local authorities. However, these changes are haphazard; some local authorities put forward detailed, considered evidence such as households surveys, others submitted limited information probably due to pressures on resources. Remarkably, two of the least affordable local authorities in the country, East Renfrewshire and East Dunbartonshire (where house prices are 10 times average earnings) successfully lobbied for targets below the already low defaults.  

There are two components to the Scottish Government’s methodology. Household projections are added to an estimate of households in existing need to give a target. Uncritical reliance on household projections leads to unsatisfactory housing outcomes being projected forward as Professor Glen Bramley has observedIf household growth has been artificially suppressed by the undersupply of new housing, then basing future need calculations on those lower growth figures will by necessity under-estimate that need”. This is acknowledged by the National Records for Scotland who produce the projections. The past decade or more has seen worsening affordability and housing outcomes we should be planning to improve upon, not perpetuate. No attempt has been made in draft NPF4 to quantify the additional homes needed in areas where houses are less affordable and have become less so over the last decade (below).

Image: Average house price multiples of workplace full-time earnings in 2021 (left) and change since 2011 (right). Using Registers of Scotland Average House Price data and ASHE full-time earnings by workplace location

The definition of existing need only recognises it in its most acute form; those in temporary accommodation and households which are both overcrowded and concealed. Concealed and overcrowded households are where two or more families live in one home without sufficient rooms. This is an exceptionally high bar missing many other forms of urgent need such as overcrowded households, adults and adult couples living with their parents, on waiting lists, in unsuitable or physically unfit homes and those in unaffordable homes. It is not fit for purpose and will underestimate the extent of housing need. Household surveys are needed to better understand existing unmet need.

The Scottish Government has been less bombastic than the UK Government in its growth ambitions, but its Strategy for Economic Transformation is clear and aims “to deliver economic growth that significantly outperforms the last decade, so that the Scottish economy is more prosperous, more productive and more internationally competitive”. Draft NPF4 should be changed to provide targets which are fit for purpose, fully understand existing need and address affordability challenges. These will be essential in providing the homes Scotland needs to deliver housing outcomes which significantly outperform those of the last decade and take pressure off household budgets. 

Joe Larner is an Associate Director at Holder Planning based in Edinburgh, with around 8 years of experience focused on housing projects of all tenures in Scotland and England.

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The elephant in the room: to broaden home ownership access, governments must tackle housing affordability head-on 

Boosting home ownership: an overriding housing policy objective for many decades, not only in Britain but the world over. And yet, as also seen in many countries, the past 10-20 years have witnessed owner occupancy rates static or falling – see graph. 

Figure: Changing home-ownership rates (owner occupiers as a percentage of all households) in selected countries indexed to 2003 (2003=100) – for sources see Figure 19 in our report

Home ownership levels among young adults have widely plunged in much more dramatic fashion. In the UK, for example, the 25-34 age group owner occupancy rate declined from 51% in 1989 to only 28% in 2019. And, in another concerning dimension, both in the UK and Australia, within each age cohort, ownership rates have declined disproportionately among lower income households. Given the range of inherent benefits believed associated with home ownership, these trends present a major housing policy challenge.

It is not as though official endorsement for home ownership can be dismissed as purely rhetorical. Quite the contrary. As demonstrated by our recent research comparing approaches across eight countries including the UK, a highly diverse array of first-time buyer assistance interventions have been, and are being, pursued around the world. 

Demand-side and supply-side interventions

In Britain this has lately involved schemes such as the Help to Buy shared equity model, where government effectively takes an equity stake in the value of an acquired home via a (time limited) interest-free loan, thus reducing the size of a purchaser’s necessary mortgage. Significant stamp duty concessions and government-backed low deposit mortgages have also been recently offered for first time property acquisition.

Since these types of help effectively enhance consumers’ ability to pay for housing, they can be classed as ‘demand-side’ instruments. Supply-side measures, by contrast, involve government support for home ownership targeted through housing suppliers (developers) or through the below-market-value disposal of publicly owned assets. 

UK examples include grant funding for housing association shared ownership dwellings and the effective subsidy offered to council tenants exercising the Right to Buy, as well as developer contributions to affordable home ownership mandated through land use planning. 

In Australia, while supply-side interventions are nowadays virtually absent, government-commissioned build-for-sale schemes formed an important instrument for boosting home ownership in the early post-war period. Direct state involvement in land and housing development to generate ‘entry level’ homes for sale meanwhile remains significant in both Germany and the Netherlands, and extensive in Singapore. 

All demand-side and supply-side models identified in our research feature among seven distinct forms of first-time buyer assistance identified in our generic policy typology – see Table 1 in our published report.

Political potency

Generally speaking, anglophone countries (e.g. Australia, Canada, Ireland, New Zealand, UK) have in the past 10-20 years tended to see growing deployment of demand-side first-time buyer assistance measures. 

Approaches of this kind chime with the neo-liberal preference for governments to act as ‘market enablers’ rather than to play a more direct role in provision. They also tend to be politically attractive because of their media appeal and electoral resonance. 

However, especially where they take the form of cash grants or tax concessions, demand-side measures are widely criticised by economists and public policy experts as inequitable (because the beneficiaries tend to be moderate income rather than low income households) and ultimately counter-productive since, by boosting purchasing power for a commodity with inelastic supply, they contribute to house price inflation. 

Those losing out under this type of approach – because of the higher prices consequently faced – include all aspirant first-time buyers failing to qualify for such assistance. The main beneficiaries, on the other hand, are existing home owners, whose properties consequently appreciate in value without any effort by property holders themselves. 

Nonetheless, the political potency of home ownership affordability was notably highlighted in recent national elections in both Australia and Canada where rival demand-side first time buyer assistance measures were pushed high among contested issues by the leading rival parties.

Broadening access to home ownership?

How far do first-time buyer assistance schemes in fact broaden home ownership across the income spectrum, as sometimes claimed? From our own work we would largely endorse the conclusion of UK researchers who concluded in 2017 that:

‘[Low cost home ownership] schemes are not expanding … social mobility by opening up home ownership to new groups of lower income households. Rather they are being used by households who would most likely buy anyway’.

Instead, the main effect of models such as shared equity (e.g. Help to Buy) or low deposit mortgages is to bring forward home purchase for moderate income earners otherwise destined to buy some time later. Alternatively, beneficiaries are enabled to buy a home somewhat bigger, or better located, than in the absence of assistance.

Arguably, regarding the scope for broadening access to home ownership, the discounted sale of council housing to sitting tenants could be something of an exception to the rule, since many scheme participants have indeed been relatively low-income households. Nevertheless, considering the eye-watering value of the effective subsidy receivable via discount entitlement (currently up to £100,000 per buyer), the true program cost to government is, and has been, colossal.

Because such costs have been historically incurred without direct government expenditure (but, rather, by accepting a below-market price for a state-owned asset), they have had low political visibility. However, if the Conservative government was serious about its recently declared intention to promote housing association Right to Buy sales, this would change because the associations concerned would expect Treasury compensation for the value of discounts approved. 

Some more recommendable first-time buyer assistance measures include:

  • Mandating developers to include below-market price housing for sale (as well as affordable rental) in residential developments is recommendable on the grounds that the discount is effectively financed by taxing land value
  • A strength of the shared equity model (e.g. Help to Buy) is its potential for lowering both the income and wealth threshold for home ownership access, to the benefit of lower income households.
  • Enabling development of for-sale housing by state agencies or housing associations offers a means of providing dwellings that can be sold to qualifying applicants at cost price (i.e. no need to factor-in profit), while also expanding overall housing supply to the benefit of the wider market.

Housing unaffordability – the elephant in the room 

Well-chosen measures to assist first-time buyers are a desirable element of a wider housing strategy. But their potential for expanding access down the income spectrum remains very limited if other key policy settings remain sacrosanct. Overall home ownership growth demands systemic change to tackle the much tougher challenge of easing broader housing affordability. 

Yet this objective calls for the dampening of property values, an objective in tension with the dominant theme of home ownership policy: to facilitate wealth accumulation through asset ownership. 

Some will argue that this demands land-use planning de-regulation to ‘free up supply’. In our view, however, the volume of new housing output is primarily influenced by developer response to market conditions, not by the planning system. Rather, the key problem lies in the taboo status of key tax and/or social security policy settings that in many countries encourage people with spare money – or credit capacity – to plough it into housing. In the UK context this could refer to the unlimited exemption from capital gains tax for the principal home, the weakness of the inheritance tax regime and the absence of a broad-based land tax.

A serious commitment to expanded home ownership demands consideration of phased reforms in areas like these. 

<strong>Hal Pawson</strong>
Hal Pawson

Hal Pawson is Professor of Housing Research and Policy at the University of New South Wales, Sydney. He is also well known in the UK for his many years of work at Heriott-Watt University, where he worked up until 2011, and where he is still an Honorary Professor. Hal’s latest co-authored books are: ‘Housing Policy in Australia: A case for system reform’, and ‘The Private Rental Sector in Australia: Living with uncertainty’, published in 2020 and 2021 respectively.

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Terrors of Temporary Accommodation

‘I can say it is cold, very cold in my room. I have got no access to the kitchen, no fridge, no basic things that I need.’

Many complex social challenges have not received much focus over the last 18 months while we have been grappling with the pandemic. But they have continued to bubble away out of sight and, as we are now (hopefully) moving towards the end of the pandemic, some of them are reaching boiling point.  This is true of hidden homelessness and the stark lack of truly affordable housing which causes people to be stuck in Temporary Accommodation for far too long. 

I work for Justlife Foundation, an organisation that works to ensure stays in Temporary Accommodation (TA) are as short, safe and healthy as possible. TA is a broad term that describes short-term housing used for people who are homeless while waiting for something more permanent that satisfies the main housing duty under the Housing Act 1996. Residents of TA might have a short-term agreement, nightly licenses or non-secure tenancies, offering little or no tenancy rights, and they may or may not receive support from services.

We would call everyone living in TA ‘hidden homeless,’ however, some are arguably even more hidden than others – with tens of thousands single homeless households living in insecure housing, not placed by local authorities under homelessness legislation and not included in the official statistics that tell us how many individuals and families are living in local authority-placed TA. All those who are ‘hidden homeless’ are not visible to the public and wider society in the way those who sleep rough.


Life in Temporary Accommodation

Experiences for hidden homeless households in TA is anything but short, safe and healthy. Research conducted between 2014-2016 with the Institute for Public Policy Research (IPPR) North uncovered a bleak reality, where individuals with limited access to local authority support ended up staying in TA for anywhere from six months to 38 years.  

‘When I first moved in, I had no running water for over a week. I kept complaining about it. So I couldn’t shower, I couldn’t even use the loo, and literally no one would do anything. They kept saying that someone would do something, and every day I’d come back and it would still not work. It was just so frustrating. And also I think I’d want to know that there’s no cooking facilities at all.’

Our research revealed that approximately half the TA residents do not have a working lock on their door. Most share filthy squalid bathroom facilities that are regularly out of order, many have windows that do not close, and most were not provided with bedding. Illegal money lending and drug dealing are commonplace, and the prognosis for those entering TA is likely to involve deteriorating mental and physical health, increased anxiety, higher drug and alcohol use, increased social isolation, and an increased risk of premature death.  

This picture is true for single homeless households and families alike (see Gold Standard Report, Shared Health Foundation). Children are often placed alongside single adults with complex mental health and substance misuse problems. 

“It’s hell. You can’t sleep, you got your ears, playing the music loud. You report it to [the landlord] and he just gets really nasty with you, and if you challenge him he attacks you against the wall. He’s had me pinned against the wall at least four times, and I’ve just had enough of it.” 

Even before the pandemic, TA residents were disadvantaged, with many facing multiple and complex issues. This has worsened in the last year according to our most recent research into the impact of COVID-19 on those we support. Interviewees spoke of horrible conditions, perfect for the spread of COVID-19, in which they felt forced to ‘self-isolate’. The closure of many support services and the decrease in available move-on accommodation, has left many residents feeling more trapped than ever and experiencing deteriorating physical and mental health. 

‘When he [the landlord] comes around he doesn’t knock on the door he just walks in. So if you’re getting dressed, it’s tough…. he can get in with his key, yes. Because there is no inner lock, so you can’t lock him out, unless you barricade the door. And there’s even females there as well.’ 


Numbers continue to rise 

The use of TA has significantly increased during the pandemic. Under ‘Everyone In’, 15,000 rough sleepers were housed, mainly in hotels. Now that has ended, the shortage of appropriate housing means many are being moved either into TA or back onto the streets. Shelter’s report “Homeless in a Pandemic” showed over 250,000 people were living in TA across England in June 2020, an increase of 83% since 2010. This figure does not include those who were placed inside under ‘Everyone In’ and does not account for those who are yet to lose their home as the evictions ban is lifted.

In addition, national statistics show only those placed by local authorities in TA, and not those homeless individuals who have found some other way into different kinds of Temporary Accommodation. Our 2017 report, ‘Lifting the Lid on Hidden Homelessness: A New Analysis’ estimated the number of households living in Bed & Breakfasts (B&B) across England to be close to 51,500, almost 10 times the official figure of 5,870.

The picture becomes even more murky when we take Exempt Accommodation into account. Exempt accommodation is a type of housing where landlords receive the higher housing benefit rate due to the provision of additional services for residents. It technically sits in the social housing—rather than private housing—sector and has existed for many years. However, changes to Universal Credit, and the rising cost of housing, have created a wave of new Houses in Multiple Occupation (HMO). Many previously used as Bed & Breakfasts or private hostels are changing, as landlords move into the more lucrative exempt accommodation sector as landlords seek higher returns.

For people stuck there, Exempt Accommodation can be difficult to distinguish from TA. As Councillor Sharon Thompson’s blog about Exempt Accommodation in Birmingham (10th May) shows, there is a distinct lack of regulation and standards across both TA and Exempt Accommodation, as well as limited enforcement powers for those in local authorities who want to ensure standards are being kept. Standards in both types of accommodation are often very poor.

For people stuck there, Exempt Accommodation can be difficult to distinguish from TA. As Councillor Sharon Thompson’s blog about Exempt Accommodation in Birmingham (10th May) shows, there is a distinct lack of regulation and standards across both TA and Exempt Accommodation, as well as limited enforcement powers for those in local authorities who want to ensure standards are being kept. Standards in both types of accommodation are often very poor.


What can be done 

We agree with the five areas outlined in the petition to end the scandal of Exempt Accommodation that collectively call on the national government to create more regulation within the sector, to increase funding to local authorities to enable greater resource and effective enforcement and, finally, to create safeguards around community and resident impact.  Each of these would have a positive impact on those living in all forms of temporary housing, but we also feel there are further ways to address additional problems with TA both locally and nationally:

Setting up local ‘Temporary Accommodation Action Groups’

  • First recommended in Nowhere Fast 2016, these are local groups that include all stakeholders of the accommodation, including residents and landlords, that come together with a common agenda to develop locally-relevant improvements to experiences in the accommodation. Currently there are four as part of our National TA Network: Brighton, East Sussex, Hackney and Manchester.

Joining, and encouraging MPs to join, the newly formed APPG on Households in TA

  • Justlife and Shared Health Foundation have pushed for the development of the APPG, focusing both on quick immediate aims/objectives as well as longer-term inquiries into the impact Temporary Accommodation has on the health and wellbeing of children, families and individuals, in order to better inform parliamentarians of the issues/challenges facing those in TA across England.

We believe that both these groups, alongside targeted action to meet people’s individual needs, will be vital in bringing about positive change for the hundreds of thousands of people who are hidden away in Temporary as well as Exempt Accommodation.

References

Gossman, S; Procter, A; Paylor, D and Maciver, C. (2020) Hidden Homelessness Exposed: The impact of COVID-19 on single homeless households living in temporary accommodation. Justlife Foundation. https://www.justlife.org.uk/assets/documents/JL_Report-HiddenHomelessness-The-impact-of-COVID-19_v3.pdf

Maciver, C. (2017) Lifting the Lid on Hidden Homelessness: A new analysis. Justlife Foundation. https://www.justlife.org.uk/assets/documents/JL_UTA-Report-2017_HR_Web-Ready.pdf

Rose, A and Davies, B. (2014) Not Home: the lives of hidden homeless households in unsupported temporary accommodation in England. IPPR North. https://www.justlife.org.uk/assets/documents/not-home_dec2014.pdf

Shared Health Foundation (2019). Homeless Families: The Gold Standard: A proposal. https://1b9dd56c-a72a-4a23-82a6-2eeb4eed747d.filesusr.com/ugd/ba5732_f620bf7c1e2d45af809d9c406f253bd3.pdf

<strong><span class="has-inline-color has-accent-color">Christa Maciver</span></strong>
Christa Maciver

Christa is Head of Research, Policy and Communications at Just Life UK.

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The role of Government grants for affordable housing provision

Those on lowest incomes face rising costs without new provision, long-term grant funding for new homes is needed now more than ever.

The rising inequalities associated with the lack of affordable housing are becoming hard to ignore. Whether a tenant or a homeowner, housing expenses take up a large part of household’s earning each month and hence the pressure rises on political leaders to do something about it.

The latest ONS data[1] reports that “households whose income is in the bottom 10% could expect to spend more than two years of disposable income on the upfront costs of an average house in London, the South East and the East of England” and “could expect to spend more than 70% of disposable household income on mortgage repayments for an average property in England”. On the rental market, households in the bottom 25% of the income distribution could expect to pay more than 30% of their income on the cost of renting an average property.

Double or quits report highlights the need for long-term grant funding

Building housing that is affordable is not straight forward. As with other types of social infrastructure, positive externalities may be hard to capture, and this justifies government subsidies into the supply of affordable housing. Government grant is essential to incentivise the provision of affordable housing tenures.

Since the introduction of the Housing Act 1988, the Government has largely provided grant on a short-term basis, mostly aligned with the political cycle. This short-term approach to grant funding leads to high levels of uncertainty and cyclicity on the housing market. I highlight this in a recent report called Double or Quits: The influence of longer-term grant funding on affordable housing supply. It was commissioned by the Consortium of Associations in the South East (CASE)[2], The National Housing Federation[3] and Shelter.

The report finds that extending the length of capital grant, all else equal, would add certainty in the development process and reduce development cycles. This in turn may lead to more housing provision.

Grant funded affordable housing has been on a downward trend

Double or quits starts off by conducting an extensive overview of the grant arrangements and outputs over the last three decades. Up until the late 1980s, local authorities were the main provider of affordable rental accommodation, when grant for affordable housing took a downward trend[S1] .
In the last three decades, housing associations, or so-called registered providers (RPs), have been the main players in the affordable housing provision. RPs use capital grant to bridge the shortfall between the total cost of construction including private borrowing costs and revenues from the, so called, cross-subsidy[4].

The Affordable Homes Programme (AHP), which has been the primary mechanism by which Government has funded new affordable homes since 2011, has provided funding on a three- to five-year basis. Table 1 shows the various capital grant schemes available since 1991. Each colour represents a grant cycle – from the beginning of the grant to its expiry. It is clear that towards the end of each grant programme, the output increases as the grant has to be spent by the cut-off date. 

Figure 1: Private Registered Providers’ Homes England / GLA funded affordable completions

Source: Ministry of Housing, Communities and Local Government (MHCLG), 2020.

Development for social rent has been on a rapid decline since 2011

Affordable housing completions can be subdivided into four main tenures, as defined by the government, social rent, affordable rent, shared ownership and intermediate rent. Figure 2 shows the affordable housing completions by tenure for England between 1991 and 2019. 2010-2011 marks an important shift in the provision of affordable housing with the introduction of a new tenure – affordable rent. Completions of social rent have rapidly declined since 2011, from around 40,000 units per year to less than 10,000.

They have been replaced by a new tenure[S2] . While the average grant per dwelling has been around £50,000 between 2006 and 2011, covering about 40% of total construction costs, it has dropped by more than half between 2011 and 2018. That led to housing associations delivering from around 50,000 social rent and shared ownership units in 2011 to less than 6,000 in 2019. The latest figures by the Ministry of Housing Communities and Local Government report total affordable housing completions of 57,185 as of the end of 2019, half of which are affordable rent.

Figure 2: Affordable Housing Completions by Tenure for England

Source: MHCLG, 2020.

Significant rise through developer contributions obtained through Section 106 Agreements

Since around the same time as the decline in social rent completions, most of which are delivered by housing associations, in 2011, there has been a huge rise in the share of completions associated with Section 106 (S-106) planning agreements. This is evident in Figure 3 below.

Planning obligations under Section 106 were introduced in the Town and Country Planning Act of 1990. They are ‘developer contributions’, similar to highway contributions and the Community Infrastructure Levy, partially provided for affordable housing. This means that there has been a shift in the sourcing of funds for affordable housing provision. Now, only about 50% of the funds come from the grant provided by Homes England (HE) and Greater London Authority (GLA).

The reliance on private development to deliver affordable housing through S-106 contribution has been greater than ever. This has been enabled through the substitution of social rent by affordable rent and shared ownership. The striking picture depicted in Figure 3 makes clear the direct positive relationship between affordable housing supply and market housing supply. If, following a slow-down in economic growth, development activity drops by, i.e. 30%, the provision of shared ownership and affordable rent may drop by a similar proportion, since 30% less S-106 provisions may be made.   

Figure 3: Share of Completions by Tenure as Part of Section 106 (S106) Agreements

Source: MHCLG, 2020. Data for England.

Lack of predictability of grant big issue say developing housing associations

Given the trends described above and the reliance on the market to supply affordable housing, the report goes on to investigate how increasing the length of the housing grant to 10 years could affect the provision of affordable housing by conducting structured interviews with 13 Chief Executives or development directors of housing associations.

The lack of predictability in grant provision may lead to a more cautious approach by housing associations when it comes to building their development pipelines and limit the number of affordable homes they deliver. The pronounced peaks and troughs in delivery associated with the short grant cycles, with completions skewed towards the end of Programmes, have knock-on consequences for development costs, build-quality and the productivity of the housebuilding industry.

The report finds that a ten-year Affordable Homes Programmes would enable housing associations to purchase more sites without planning permission and take on larger and more complex sites. This may lead to reducing overall construction costs and passing the savings on to the homeowners or tenants.

Land-led development by housing associations would become more prevalent

Housing associations will be more likely to invest in their in-house development teams and intensify relationships with private developers, house builders, land managers and local authorities, including through joint ventures. This can lead to consolidation on the market and economies of scale in the production of new affordable housing.

Furthermore, a move to long-term funding would also increase housing associations’ ability to fulfil deliver affordable housing counter-cyclically. It would do so by accelerating the trend for greater levels of land-led development, whereby housing associations act as the lead developer on sites rather than acquiring homes from private developers via S106.

This would enable housing associations to build up longer and more consistent pipelines of development sites, which would help avoid some of the pronounced peaks and troughs in delivery that have been associated with previous Affordable Homes Programmes.

Resilient funding provisions for affordable housing should be a high priority for Government

Due to the strong dependence of housing development on economic cycles, as outlined above, the risk of taking a market approach to affordable housing is that affordable housing supply may become more volatile and pro-cyclical.

As we are experiencing in the current Covid-19 economic downturn, having a safe and affordable place to live is a key necessity for every human being. It is in periods of downturn, that households are more likely to lose their job, become evicted and struggle to afford housing. Having a resilient provision of affordable housing, for those most in need during downturns, should be high on the priority list of the Government.  

<strong><span class="has-inline-color has-accent-color">Dr Stanimira Milcheva</span></strong>
Dr Stanimira Milcheva

Dr Stanimira Milcheva is an associate professor in Real Estate and Infrastructure Finance at University College London. Stani’s research is broadly in the field of real estate and infrastructure finance. She also works on topics related to affordable housing.


[1] Office for National Statistics (2020), https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/alternativemeasuresofhousingaffordability/financialyearending2018.

[2] CASE is a group of 10 major housing associations providing affordable homes in the South East of England. Collectively, members own more than 400,000 homes across the country, with over 140,000 in the South East. The members of CASE are: L&Q, Metropolitan Thames Valley, Moat, Optivo, Paradigm, Radian, Sovereign Housing Association, The Guinness Partnership, The Hyde Group and West Kent Housing Association.

[3] The National Housing Federation is the voice of housing associations in England. Its members provide 2.5 million homes for 6 million people.

[4] Cross-subsidy is model in which the profits from the sale of market housing are used for the construction of affordable housing, including tenures like social rent.

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Rescuing the Affordable Housing Commission Report from the chaos of Covid-19

It is the misfortune of the Affordable Housing Commission to release their report in March 2020, just as Covid -19 took hold. Not only did the report get buried by more pressing news, but the Commission also had to rush out a Covid-19 supplemental report in July 2020.

We need to rescue the report because it offers a great analysis of the housing crisis and realistic policy proposals. This is exactly what you would expect from a Commission headed by Lord Best, one of the sharpest minds in UK housing and supported by the left leaning Smith Institute.

The main argument is the last 20 years has seen the continuing decline of social rent housing, and the doubling in size of the Private Rented Sector (PRS) up to 22% of current housing. There are now 1.5m private landlords. Whilst, the social rent sector has continued to decline. The problem is that people who need the security of social rent sector face the insecurity of the PRS. Those on a low and insecure income, elderly, the ill and those with children should not be living in a sector where you can be required to leave with just a couple of months’ notice. For instance, a quarter all households with children now live in the PRS compared to 8% in 2004.  People are staying longer in the PRS, often into old age. The Commission describes this as a ticking time bomb, as an increasing number of older private renters will find that they can no longer pay the rent when they retire.

The commission found that 23% of private renters are paying more than 40% of their income on rent, which is creating poverty. A Nationwide Foundation survey in 2019 found that a third of private renters had less than £39 per week to live on after they had paid essential bills.

In London the difference between social rent and private rents is the greatest, driving many below medium income into poverty. In the area of Bermondsey, south London where I work 50% of ex –council homes are now rented out, with private renters paying nearly four times more than their council neighbours and having to find a deposit of around £2,000.

The other effect of high rents is that it stops renters from building up the funds to escape into owner occupation. Bob Colenutt estimates a third of people born in the 1980’s and 1990’s will never be able to afford to buy their own home (Colenutt 2020). The average deposit needed by a first time buyer is London was a staggering £146,757 in 2019. Also the Commission highlights that the explosion of Buy to Rent mortgages has helped to force up house prices. Even George Osborne, the most political of Chancellors, recognised the need to slightly dampen down the increase in Buy to Let.

Within social housing, there has been a trend towards higher rent ‘affordable’ homes, rather than genuinely affordable social rents. Higher rents are seen as the way of spreading government money more thinly and building more ‘sub-market’ homes. Government subsidy has dropped by a third since 2010 and housing associations have moved 100,000 properties from social rents to higher affordable rents. The problem, as noted by the Commission, is that for low earners higher rents mean more poverty.

The Commission argues for a re-balancing of the housing market by increasing social rent housing, to provide an alternative for those for whom PRS is unsuitable. The Commission accepts that it will take 25 years to rebalance, and proposes that we start now so that a child born today should be able to live in an affordable home when they are 25 and want to live independently.

To achieve this, 90,000 new social rent and 55,000 shared ownership/ intermediate rent homes are needed each year to address the overall shortage of 3.1m social rent homes identified by Shelter

This will require an increase in government expenditure from 1.9% to 3%, which is £12.8 billion per year. To put this into context the housing benefit bill was £25 billion in 2016 and £1 billion was spent on poor quality temporary accommodation for homeless people in 2019, but neither expenditure resulted in any new homes. The cost of Help to Buy, aimed at helping first time buyers, was £10 billion in 2013 and there is a debate about whether the scheme added to supply or merely forced house prices up.

The Commission does argue for PRS rent caps, the end of Section 21 evictions and a landlord registration scheme to give some protection to those remaining in the private rented sector.

The Commission also calls for local authorities to be given discretion over the selling of their council homes, in the context of the intensity of housing need in their area.  

In a Zoom meeting with LHG members, Thangam Debbonaire, Shadow Secretary of State for Housing, was clear that this is too early in this Parliament to make spending commitments, especially as the full effects of the Covid-19 recession are not known. However, this report seems to set out a good general direction of travel.

<strong><span class="has-inline-color has-accent-color">Andy Bates</span></strong>
Andy Bates

Andy is on the Executive Committee of the Labour Housing Group and is a member of Old Southwark and Bermondsey CLP.

His is an advocate of residents collectively managing their own homes. Andy is a JMB Manager at the Leathermarket JMB. Southwark’s largest resident-managed housing organisation covering over 1,500 homes.

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Making land deliver

Last week saw the launch of ‘Making land deliver’, a new report from Network Homes proposing three big ideas to reduce land costs for providers of social and affordable housing. I took part in a panel discussion along with the report’s co-author, Reuben Young, Rico Wojtulewicz from the House Builders Association and Cllr Shama Tatler from Brent.

There is no doubting the importance and timeliness of the land reform agenda, and on this our panel was unanimous. Since 1995, the value of land owned by UK households has grown by an astounding 583%, while the combined value of the assets overlying land (i.e. buildings) has risen at less than half this rate. We are effectively channelling ever more of our national wealth into the hands of those who own a fixed supply of land. This represents a significant challenge for any government hoping to build, build, build its way out of a Covid recession.

 ‘Making land deliver’ suggests a three-pronged attack on the land value problem:

  1. Allow local councils, Homes England, and the Greater London Authority to compulsorily purchase land at existing use value.
  2. Consider social value and market value when selling public land.
  3. Reform the system of developer contributions to affordable housing.

Network Homes are right to look to the rules on Compulsory Purchase Order compensation for a mechanism to moderate the land market – an issue discussed in detail elsewhere on this blog. Removing ‘hope value’ from CPO compensation awards would tackle a critical barrier to solving the housing crisis in England and Wales.

However, I would caution that Network Homes’ specific call for compensation to be reduced to ‘existing use value’ is likely to conflict with Protocol 1 of the European Convention on Human Rights, which rightly requires compensation at market value. Instead, the UK should simply align itself with other ECHR signatories including Germany, France and Netherlands, by excluding potential development value from definitions of ‘market value’ for CPO compensation purposes. Removing ‘hope value’ would have the effect of reducing awards to levels closer to ‘existing use values’, while still fairly compensating landowners.

Secondly, public bodies considering land disposals should consider social value as well as market value. The government’s Public Land for Housing Programme so far boasts a build out rate of just 15% over the decade that it has been running, and just 6% of the homes planned for these sites will be for social rent. Reviewing and clarifying ‘best consideration’ rules to ensure social value is paramount in decisions about how to use public land is an obvious win.

But the really fresh thinking comes in the third proposal: to replace the Section 106 system for delivering affordable housing on market-led schemes in England with a new, ‘un-gameable’ and non-negotiable system of developer contributions. It works like this:

  • Councils set an affordable housing tax rate for all development in their area.
  • Developers submit a Gross Development Value, on which they will pay the local tax rate.
  • That GDV is used to set the price at which the council can buy homes on the scheme on completion for use as social and affordable housing.

A developer could submit a ‘pessimistic’ GDV to pay less tax, but would then be required to sell homes to the council at ‘pessimistic’ values. This balancing of incentives is the beauty of the proposal. However, there are some thorny issues to work through.

Firstly, this system appears to leave developers in control of the type, size and design of the homes they will build, with councils having only the right to purchase those homes at a pre-set price at the end of the process. There is no guarantee that developers will build the right homes for meeting local housing need, or even that they will meet minimum space standards for social housing. True, councils could spend their tax revenues on delivering the right homes elsewhere – but this relies on Network Homes’ first two recommendations to provide an alternative source of land right-priced for social and affordable housing.

Secondly, the intention to balance power between developers and councils through this proposal may be undermined by the broader planning system. Could a council find itself under pressure to purchase homes of the wrong type or at the wrong price to prevent sites stalling in this system? If that council was worried about how to satisfy its Housing Delivery Test and so avoid losing its planning powers, perhaps. This could be resolved by capping the price which can be paid for affordable housing, for example using plan-stage viability assessments when allocating land.

Despite my quibbles, new thinking from social housing providers is extremely welcome here. Network’s ‘Making land deliver’ follows on the heels of its 2019 report into barriers to social rent delivery for HAs. Both reports provide valuable insights from the front-line of housing delivery, and crucial back up for non-practitioners like me who are campaigning on these issues. I would absolutely encourage other social housing providers to share their experiences and ideas.

<strong><span class="has-inline-color has-accent-color">Rose Grayston</span></strong>
Rose Grayston

Rose has 10 years of experience in providing policy, research and strategic communications support to progressive campaigns and their leaders. 

She has managed and led successful campaigns to reform English planning rules to incentivise the delivery of affordable homes, to reduce borrowing rates for local authority house-building, and to build political and public support for reform of England’s broken land and house-building systems.