In December, I gave evidence to the MHCLG select committee about the impact of Covid-19 on rough sleeping. My message to them was we desperately need investment in front line housing advice and long-term funding for genuinely affordable housing to really tackle the complex causes of rough sleeping. The pandemic has shown is what is politically possible, but short-term sticking plasters really need to become longer term solutions – and now is the time to make that case to the Government.
At the start of the lockdown councils were told by the government to do ‘whatever it takes’ to support our communities. One of the actions we took was to quickly house rough sleepers. Prior to the pandemic hitting rough sleeping had been steadily increasing after a decade of austerity, having been all but eliminated under the last Labour government.
The ‘Everyone In’ initiative made local authorities responsible for housing rough sleepers and those at risk of rough sleeping. This was regardless of priority need, local connection or recourse to public funds.
We stepped up to the challenge in Tower Hamlets, the borough I represent. Around 260 individuals either rough sleeping on the streets, or at imminent risk of rough sleeping, were given emergency accommodation. 49 of this group had No Recourse to Public Funds (NRPF). We placed entrenched rough sleepers into newly procured commercial hotels and emergency B&B accommodation. Statistics are one thing but each number represents a life transformed and having a roof over your head unlocks access to so many other services and life chances.
Now we face a situation of uncertainty about future funding to support this cohort of people. While the Government has called for councils to come up with a plan on how to move rough sleepers on to the next stage of accommodation, we have again stepped up, but we need funding to back us all the way.
The Next Steps Accommodation Programme, a £400m national fund, offers some help but the costs we face are substantial. Housing benefit claims won’t cover the cost of the support for a group with complex needs. Ongoing announcements about additional funding streams create pressure on already under resourced teams to write ‘bids’ and applications for resources for projects that are so clearly needed. This relationship between local and national Government is breaking and needs urgently fixing.
Now we are in a further lockdown, with high levels of Covid cases and temperatures plummeting, we need the Government to make suitable provision. On a practical level normal provision such as hubs will not work as self-contained units are still required. If the Government does not get this right it will lead to an increase in infections. A decade of austerity has shown that if you simply turn off the funding taps in one area it leads to further pressures on other public services with longer term impacts on other services like the NHS.
It’s taken a time of crisis for the Government to step in and give councils the funding they need to tackle rough sleeping and they desperately need to address the long-term undersupply of genuinely affordable housing. If something good can come out of the pandemic, it’s eradicating rough sleeping. The Government has a real chance to not undo the progress we have made.
Rachel Blake
Rachel is the Deputy Mayor for the London Borough of Tower Hamlets. She was elected to represent the Labour Party for Bow East Ward in May 2014 and appointed to Cabinet in July 2015.
Rachel has held Cabinet Member roles for Regeneration, Planning, and Air Quality. Rachel is now the Cabinet Member for Adults, Health and Well-being.
She has previously been called in as an expert witness to the Housing, Communities and Local Government Committee on its inquiry into the long-term delivery of social and affordable rented housing.
Resolution Foundation report demonstrates the inadequacy of the Government’s response to the renters crisis – it must go beyond its own short-termism, writes Jack Shaw.
In March the Government said that this pandemic was an opportunity to end rough sleeping for good. New research by the Resolution Foundation has made it clear that that won’t be the case unless the Government is willing to put protecting renters and tackling homelessness at the top of its domestic agenda – and it can only do so by legislating.
At the end of October the Resolution Foundation published its report Coping with Housing Costs, Six Months On, based on a survey in September of 6,000 working-age adults across the country. This follows the same survey carried out in May, and provides a unique opportunity to view the pandemic through the lens of housing. The findings are stark, if not all too familiar.
The basic tenet is that the safety net put in place at the beginning of the pandemic for private and social renters, as well as homeowners with mortgages, falls short of the support required to keep people from losing their homes.
Comparisons between tenures show that, across multiple indices, renters are hit harder. Compared to homeowners with mortgages, renters – social and private – are more likely to have lost their job or been furloughed; be in arrears; cut back on other items, dip into savings or borrow to cover housing costs; be in receipt of Housing Benefit and Universal Credit; and be less certain about where they’re going to live in 12 months’ time.
Over time the need for homeowners with mortgages to draw on mortgage holidays has fallen, while their job certainty appears to have increased – only three per cent of people with mortgages reported job losses, compared with eight per cent in the private rented sector and seven per cent in the social rented sector respectively.
It does not appear that the need for housing support for renters has receded as much as we had hoped over the same period. Fewer renters reported being on furlough in September compared to May – perhaps because some have returned to work – but more reported losing their job.
Likewise, the number of renters seeking – and being refused – rent reductions has remained relatively stable at around one in 20. The picture is nuanced, but there are several conclusions that can be drawn.
First, the blow to households with mortgages has been softer during this pandemic. Second, not only have renters been hit harder, but they have also recovered more slowly. Third, the interventions put in place by the Government aren’t sufficient. At best, they delay homelessness, not prevent it. True, renters have benefitted from a ban on evictions, and an uplift in Local Housing Allowance (LHA) rates and Universal Credit (UC), but none of these are long-lasting.
The LHA rate rise itself follows a capricious rate freeze by the Government in 2016, which decoupled it from inflation. What that means is as inflation rises, LHA rates do not rise with it. This gives renters access to fewer and fewer properties, which has undoubtedly undermined the resilience of private renters who benefit from LHA during this pandemic.
The uplift essentially returns LHA rates to pre-2016 levels, although in another blow the Spending Review has since revealed that LHA rates will be frozen in cash terms from next year – so rates will once again fall back below 30th percentile over time, pushing renters back to square one just as they’re running out of cash. The ban on evictions has already ended, and the UC uplift is due to end in April.
As the Government battles on every front – COVID, saving the economy, protecting public health, Brexit, a credible Opposition – I suspect the Secretary of State for Work and Pensions’ latest words in Parliament are more than a Freudian slip: they were by design.
On 30 November, when asked whether she would make the Universal Credit uplift permanent, Dr Thérèse Coffey pointed out to Parliament that “we can also make the effort to encourage people to go for vacancies.” With the number of vacancies down 35% this time last year notwithstanding, such nonsense in the face of evidence-based interventions that will support renters to hold onto their tenancy is the epitome of absurdity.
But do not take my word for it. Modelling by the Joseph Rowntree highlighted that up to 16 million people across several million households are at risk of losing the equivalent to £1,040 overnight if the UC uplift ends in April, a kick in the teeth for the lowest income families just as they’re recovering from the pandemic. Research from Shelter earlier this year also revealed that 322,000 renters were in arrears despite keeping up with their rent before the pandemic began. With landlords handing out notices of repossession, we are only months away from understanding the full impact inadequate support has had on renters.
So, where does that leave us? Above all, it leaves us angry – or at least it should do. As to where it leads us: to the Government’s front door. The safety net is holding – just – in the face of the pandemic. While it cannot be the solution for renters forever, for now it’s making a global pandemic more bearable.
Though the Government cannot even get short-termism right, it already needs to look long-term too, and that starts with taking control over the domestic agenda and legislating as it has promised. Ministers need to get on with the job and abolish Section 21 of the 1988 Housing Act – so called ‘no fault’ evictions which allow landlords to evict tenants without good reason – over 18 months since the promise was made.
The Government also needs to bring forward the Renters Reform Bill, which no doubt should have precedence over some of the smaller items on the legislative agenda, such as the licensing of jet skis last month. If, as the Bill says, its aim is to improve the “security for tenants in the rental sector, delivering greater protection for tenants and empowering them to hold their landlord to account”, then surely the best time is now, before that security all but evaporates?
The cost of renting has long outstripped people’s ability to pay rent. The Government should strengthen and lengthen interventions to support those most in need, but it should also abandon its short-termism and support existing interventions with legislation that looks toward the long-term. A failure to do so will force more renters out of secure, permanent accommodation, and into temporary bed and breakfasts.
Jack Shaw
Jack is a Senior Policy Researcher for a Labour MP, has previously worked for the Local Government Association, and is a member of the London Labour Housing Group Executive Committee.
Coronavirus has upended everything. Within the space of a week in the spring, the pandemic has taken centre-stage in our social and political lives and has remained there, immovable, ever since. So interwoven into the experience of everyday life has the virus become, it sometimes feels difficult to think about much else.
In many ways it’s absolutely right that our attention should be so fully devoted to discussing covid-19 and, in particular, how to contain it. Bearing down on the spread of the virus to protect life and jobs is arguably the single biggest challenge the country and the world has faced since WW2.
But there are two additional crises that lurk not far into the horizon. In fact they are already here. These are the dual threats of the housing crisis on the one hand, and environmental collapse on the other. As scientists have evidenced, the latter creates the conditions for viruses like covid-19 and others to spread in the first place.
Left unchecked these twin crises will get worse and spin out of control.
Just consider this. It’s possible that environmental degradation could lead our planet close to becoming uninhabitable by the end of the century. The destruction of nature isn’t just about climate change — undoubtedly an existential risk and one that has received a lot of attention since last year. It’s also about extreme biodiversity loss and a rapid decrease of land and soil productivity — two issues which get too little attention and which, in the words of the UN, are “eroding the very foundations of our economies, livelihoods, food security, health and quality of life worldwide.”
On the other hand, the collapse of affordable housing has proved a disaster for many and may get worse. Home-ownership is out of reach for a generation of young people, in parts of the country average rent equates to three-quarters of median pay, and tens of thousands of families live in insecure temporary accommodation. Without access to a place people can reliably call home, the foundations of democratic norms — norms which rely on basic levels of socio-economic security for all — are at risk.
But this needn’t be our fate. We can carve out a different future, one where we provide housing security for everyone and safeguard nature at the same time. Doing this requires implementing a wide range of governmental interventions and creating market conditions which favour people and the planet above unbridled profit. But there is one policy area where we can begin to tackle both crises at once — and that’s unlocking the potential for environmentally friendly housing while making housing genuinely affordable.
So how do we do it?
Change begins with shifting how we think about housing. Much of the debate frames environmental protection and boosting housing supply through the prism of trade-offs: we sacrifice the former for the latter (or the reverse), say by building on the green belt (or choosing not to). But new-build and enhancing environmental protections can be two sides of the same coin.
Indeed, innovation and policy change is already moving us in that direction. Some developers are incorporating enhancements to ecosystems within their developments, like increasing beehives and bird boxes in urban settings. In parallel, bodies like the London Assembly champion ideas to nudge or require developers to think green — like incorporating requirements for minimal ‘green space factors’ into planning and recognising innovative ideas through award schemes.
In addition, the more we can transform the infrastructure that neighbourhoods rely on towards sustainable ends, the more we can move in this direction. For instance, we must ensure transport links are green — whether it’s by prioritising walking and cycling links above roads, and when roads are necessary ensuring they’re used by electric cars, not gas-guzzling vehicles.
A second step lies in pushing back on historic, out-dated practices in the development industry. At the forefront of this change is challenging a de facto presumption in favour of demolition. Demolition is massively wasteful — in the UK alone, the construction industry accounts for 60% all materials used. In addition, the development industry accounts for 45% of carbon emissions, and when demolition happens it releases huge amounts of “embodied carbon”. The alternative should be a presumption in favour of refurbishment with demolition there as a genuine last resort.
It is possible to refurbish whilst unlocking affordable housing. The long-term consequences of covid are likely to be empty office buildings in the centre of cities, as white-collar workers shift to working from home on a more regular basis. Local and regional leaders must therefore find ways of bringing back empty premises into use as affordable and quality housing. We’ve already seen councils take similar steps to revitalise centre city living when perceived urban decay has been a challenge in the past.
In cities like Liverpool city centre, living increased by 181% from 2002 and 2015, whilst in Birmingham it increased by 163%, and these changes were a result of proactive policy interventions. Living in these areas is now associated with a good quality of life, in effect embracing the Mayor of Paris’ 15 minute living concept where everything one would need (whether it’s access to gyms, restaurants, the supermarket, or schools) is within close walking distance.
A third move is embedding the circular economy into any new affordable housing development. From deploying renewable energy sources, like heat pumps and solar, through to releasing more subsidies for insulating homes, change is well under-way on this front. The shift needs to be coupled with sustainably disposing of waste and in particular food waste — an issue that lies behind a whopping 8% of global greenhouse gas emissions.
What this means is getting people to waste less food in the first place, and when waste is inevitable making sure it’s composted or ends up in anaerobic digestion plants not landfill or being incinerated. Crucially, using resources intelligently helps with the affordability of living expenses. Cutting fuel bills can lead to hundreds of pounds in household savings, whilst eating not wasting edible food can save the average household £500 per year.
These are just some changes that we can make to marry the need for genuinely affordable housing with sustainability. What’s outlined above does not negate how difficult achieving the scale of transformation we need to see will be. But the urgency with which we increasingly understand the environmental crisis, coupled with new technological opportunities, means citizens, policy-makers and developers are very clearly beginning to envision and see the opportunity to build another future.
This week Labour challenged the government to ‘Build it in Britain’ and support the creation of 400,000 jobs, including in the crucial manufacturing sector, through a green recovery from the Covid crisis. Action now would support the creation of new jobs and tackle the climate and environmental crisis, and includes expanding energy efficiency and retrofit programmes, including in social housing.
For too long we’ve negated people’s right to secure housing whilst undermining the natural world. Covid-19 is undoubtedly the biggest short challenge facing us, but we need to walk and chew gum at the same time, keeping focused on tackling the twin threats of insecure housing and environmental breakdown.
The moment for change is now.
Pancho Lewis
Pancho Lewis is a Westminster Councillor, where he is Shadow Cabinet Member for Environment, and works for the food waste start-up Too Good To Go.
Today, the country is back in lockdown. Yet this time there is no Government action to help private renters stay in their homes. 2 million private renters are now claiming state support, but the money is not sufficient to cover average rents. Thousands more are ineligible. Eviction notices have been dropping through the letterboxes of renters who have struggled to keep up with payments, through no fault of their own.
For the first national lockdown, the Government did the right thing. They paused all court proceedings, meaning no evictions could take place. They have since extended notice periods, and requested that bailiffs do not enforce in areas of local lockdown, as well as over Christmas.
For this second lockdown, mortgage holidays and credit holidays have been extended, but courts continue to evict tenants.
Rather than facing lengthy and expensive court proceedings, thousands of renters will be packing up and searching for a new home, putting themselves and others at risk at a time when we are being asked by the government to stay at home. A month-long pause on bailiff action will be of little comfort.
As the number of Covid-19 cases, and deaths from the disease, are rising fast, it is essential that renters – especially those who are vulnerable or shielding – can remain safely in their homes. To do this, the Government must pause all eviction proceedings, and ban landlords from serving section 21 no-fault eviction notices or serving notices under section 8 for rent arrears relating to coronavirus.
The Government has done the right thing before. We call on Ministers to act swiftly, to ensure that no renter loses their home due to covid-19.
Yours Sincerely,
Alicia Kennedy, Generation Rent
Michelle Simpson, The Big Issue
Bridget Young, Nationwide Foundation
Anela Anwar, Z2K
Jacky Peacock, Advice 4 Renters
Portia Msimang, Renters Rights London
Roz Spencer, Safer Renting, Cambridge House
Alicia Kennedy
A leader in strategic planning and campaign organisation, Alicia has had a 25-year career operating at the highest level of national politics.
She worked with Prime Ministers, Cabinet members, hundreds of MPs, and thousands of Councillors and volunteers to deliver successful local and national election campaigns for the Labour Party. She was made a life peer in 2012 and is non-aligned.
On March 23rd, 2020 UK was formally placed into lockdown. Those who were not key workers were asked to not work or to work from home. This meant the decades-old tradition of working professionals putting on suits and commuting into work to go into an office and sit at a desk for several hours a day ended. Abruptly.
At first, some rejoiced at this news. We all learned about the intricacies between Zoom and Microsoft Teams and most of us became pop-quiz experts. The concept of moving from your home to go miles away to do the same thing you could do from your couch seemed insane. Most of us also found that we work better in pyjamas and are never late when our bed is also our office. Long live the “Boffice” we cried!
However, as time went on, difficulties emerged for the working poor. Those who could leave their cramped city flat and run away to a big house in the country did. Oxford University found that during lockdown over 250,000 people left London to go to live elsewhere, many whom were under 30. Those who could upgrade their Wi-Fi did. Those who could create an “office” like environment with comfy chairs, a working desk, and several monitors, did. Those who could not – struggled.
Many young people realised that no garden, no living room, and several people using the same kitchen and bathroom were acceptable before Covid-19, but not during lockdown. Landlords profiteering from turning that pesky living room into a third, fourth or even fifth bedroom in a House of Multiple Occupancy were making homes unliveable in lockdown. After a few weeks – the “Boffice” was not as great as we thought it was. People were not working from home. They were living at work.
The property developer Pocket Living found that 37% of those in London who were living in shared accommodation, were living and working in their bedrooms during the lockdown. Many reported that this was affecting their mental and physical health.
Participants reported issues like “noise, lack of work surfaces, and privacy” that severely affected their ability to work. Of those asked, 46% of participants reported not having a suitable place to work. Now, after the first lockdown and as a result of these changes, the Independent reported that 70% of young people are feeling more anxious about the future as a result of the Covid-19 pandemic.
This year might be the first time that young people move out of London and other city centres on masse – or do not actually move there in the first place. At the beginning of the year, it was predicted that the number of young people living in their own private rented sector (PRS) was going to rise by over 1.3 million. Now, I would not be so sure.
But fear not landlords – help is at hand. A landlord’s best bet lies in effectively extending regulation of the minimum shared space required for houses in multiple occupation (HMO). Regulation should enhance the need for shared living spaces. Young renters need to have space in order to live and work in separate and private areas. Ensuring shared living spaces are available would provide the stability and space young people need to be efficient and productive at work.
By creating living spaces that are living and working friendly – landlords will ensure that they can keep their tenants in good mental and emotional health, and ensure their properties are occupied. It is not a huge amount of effort – but it will be well received by tenants thrice over. As young people find themselves in a new working environments and central offices become a thing of the past – landlords should act now to ensure a good relationship with their tenants for the future and the “New Normal”.
Additionally, for those unlucky enough to be on the ever-growing list of industries impacted by Covid-19 and find themselves now on furlough or in a tough job market, landlords should allow late or partial rent payments. The stress of renting as a young person is high enough, and a little flexibility from landlords would go a long way.
The “New Normal” does not have to be all bad for young renters. Instead – tenants and landlords must act together to ensure better working and living conditions. There should always be a difference between working from home and living at work and with a little communication and adjustment, better housing is possible.
Cathleen Clarke
Cathleen Clarke is a youth campaigner and Labour Party activist. She is currently running for Chair of Young Labour and works for a migrants’ rights charity.
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.
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.
COVID 19: the State’s initial interventions in the housing market
The COVID 19 pandemic has seen extraordinary interventions by a Conservative Government in the running of the UK economy. In the private housing market, the Government has moved to ensure that homeowners suffering falls in income are not threatened by repossession. At the same time, some finance institutions providing mortgage finance (along with other businesses) have been offered loans and guarantees from Government worth £330bn to protect their own income as mortgage payers have taken advantage of the payment holiday.[i]
Private tenants (as well as tenants in social housing) are also protected from repossession proceedings in the current pandemic – in the short term at least.
The Government’s objectives here are two fold. First, in the face of the health crisis and subsequent economic meltdown, Ministers had to ensure that homelessness did not increase exponentially.
But crucially the Government also needs to protect the housing market from collapse because of the sector’s importance to the UK economy. Housing assets make up 35% of all personal wealth in the UK – some £5.1 trillion. Also there is a total of £1.4 trillion outstanding on mortgage loans in the UK economy while investment in housing accounted for 4.1% of UK GDP in 2018. [ii]
So what will happen in the housing sector as the UK emerges from the economic shock precipitated by the COVID 19 health crisis? In what ways will Ministers seek to prop up this critical part of the economy longer term? We have some examples from the past that might serve as pointers to what might happen.
In February 1974 the Labour Party took power at a time following a doubling of house prices and when mortgage interest rates had hit 11%. The house price boom was followed by a significant decline in the market’s fortunes with particular concern that house builders might go bankrupt as they failed to sell newly built housing. As a consequence, the Labour Government introduced provisions under Circular 70/74 (called Local Authority Housing Programmes) which helped bolster the private housing market and also increased the stock of social housing. Specifically the Circular enabled local authorities to buy new unsold housing from private developers.[iv] In 1974/75 £118 million was spent on buying 11,700 new private houses in England and Wales.[v] The Circular also enabled the Housing Corporation[vi] to fund similar purchases by housing associations.
1993: Housing Market Package (HMP)
The housing market in the early 1990s was characterised by high interest rates which resulted in falling house prices and the emergence of negative equity for some mortgage borrowers. Overall there was a lack of demand for new construction and builders were left with housing stock that they could not sell on the open market. In late 1992 the Conservative Government responded to this market failure by allocating £577 million to the Housing Corporation to fund housing associations to purchase new, empty and repossessed properties by 31st March 1993.
In total, in just 93 working days, 81 housing associations acquired 18,430 vacant properties, 2,400 over target. Fifty per cent of the stock was bought from builders/developers. The public funding was supplemented by private finance to the tune of £328 million. [vii]
2008/09: Mortgage Rescue Scheme (MRS)
Over 10 years before the current health emergency and related economic crisis, the global economy was shaken by a meltdown in the finance markets in 2008. The UK’s Labour Government responded to the ensuing recession by introducing a wide range of fiscal and monetary measures in an attempt to revive economic activity and stimulate growth. On 2 September 2008 the Government announced a £2 billion package for housing which included the following:[viii]
bringing forward spending on housing commitments from future years to encourage the building of more social housing
raising the £125,000 threshold for Stamp Duty on house purchases to £175,000 for 12 months
providing “free” five year loans of up to 30% of a property’s value for first time buyers of new homes in England
shortening from 39 weeks to 13 weeks the period before Income Support for Mortgage Interest was paid
As part of the package the Government also made available £200 million for mortgage rescue schemes, with the objective of assisting up to 6,000 households under the threat of repossession.
Under the MRS, eligible homeowners threatened with repossession could apply to housing associations to provide them with an equity loan to help them reduce their monthly mortgage payments and retain ownership; or, alternatively, to purchase the home outright with the former owner remaining in the house as a tenant.
What next for the housing sector?
The health emergency has become an economic crisis and housing is likely to suffer as much as any other sector in the UK economy. The mortgage holiday and the ban on repossessions in the owner occupied and rental sectors both finish in the autumn. And this will coincide with the ending of the furlough scheme for employees who are without work in the current pandemic. The scenario is set for a significant readjustment in the housing market as incomes are squeezed, unemployment rises and consumer confidence falls away. Given this context how will the Government support and indeed boost the housing sector in the face of deepest recession in 300 years?
There are a number of options available to Ministers.
Before the current crisis, Rishi Sunak’s March 2020 budget set out a £12.2bn Affordable Homes Programme over the five years from 2021/22; an additional £1bn for a Building Safety Fund to remove dangerous cladding; and £650m to help rough sleepers into permanent accommodation. The Budget also reversed the interest rate hike imposed on borrowing from the Public Works Loan Board for new council homes.[ix] Of course much of the Government’s housing budget is focussed on its pet home ownership ‘products’ such as First Homes and Help to Buy.
The Government has recently announced measures intended to boost the housing sector in the wake of the pandemic. As part of this initiative Permitted Development Rights (PDR) are being extended to allow for the demolition of residential/commercial properties where they are replaced by new housing. From September such schemes will not require full planning consent. Significant concerns about these changes in planning regulations have already been voiced as they will erode standards and could see occupiers living in unsafe conditions. [x]
In the Chancellor’s Summer Statement £2bn was set aside for Green Home grants to home owners and landlords to make around 650,000 homes more energy efficient. A £50m fund was also established to pilot a scheme to decarbonise social housing. The most expensive initiative sees the Stamp Duty zero-rated threshold raised from £125,000 to £500,000 until 31st March 2021. Estimates suggest this will cost the Treasury £3.8bn. [xi]
But the schemes announced to date are likely to be just the start of significant Government interventions in the housing sector as the recession deepens later this year. We should expect the Autumn Budget to include significant measures to boost the housing sector as part of a Keynesian-style counter cyclical strategy to kick start the ailing economy.
Using borrowed funds (in the main) by Government, local authorities and housing associations, look out for at least some of the following:
schemes to buy new but unsold housing from distressed private developers
mortgage rescue schemes for households unable to maintain loan repayments because of unemployment or reduced income
more direct investment in new social housing to not only boost the provision of low cost accommodation to rent but also to create jobs in the construction sector (which is likely to be badly hit as private investment in housing slumps)
schemes to convert offices, shops, pubs and restaurants into social housing as the recession takes it toll on different parts of the commercial property market amid changes in working patterns and leisure activities
A progressive, left leaning Government would use the crisis to boost the stock of social housing (through the purchase of homes from households – including Buy to Let landlords – in distressed financial circumstances). The purchase of unsold new housing from developers would also be subject to conditions such as restrictions on executive pay and bonuses and shareholder dividends. Equity stakes in house builders seeking public funding would be required and workers’ pay and conditions would be enhanced too. Any tax avoidance by State-funded developers would be prohibited. New housing funded through the public purse following the pandemic should, of course, be to the highest standard particularly in terms of energy efficiency and sustainability.
Unfortunately we are unlikely to see the current Government impose such conditions on private sector beneficiaries from increased State spending in the housing sector. But we live in hope.
Note: an earlier version of this blog was published as a Briefing for Housing Quality Network (HQN)
Roger Jarman
Roger has over 40 years experience in the housing sector. He has worked as an academic and in local government as well as for a number of central agencies. He had spells as a senior manager at both the Housing Corporation (1991 – 1999) and the Audit Commission (1999 – 2011).
He currently works as a housing consultant and trainer with a wide range of clients including local authorities and housing associations. He also helps run several small housing organisations as a non executive director. He is a member of the Labour Housing Group.
As we start to look forward to the recovery, it is right that the government focuses on sustaining and creating jobs, especially within the key sectors of hospitality and tourism. Here the whole property industry has a critical role to play in supporting this agenda, especially through the increased provision of housing in inner London, which is both accessible and affordable, for not only those key workers who have been providing essential services during the current crisis, but crucially those working in the very sectors the government is actively seeking to support.
Although we are still very much in the response phase of the current COVID-19 crisis, significant attention is already being paid to the recovery phase, and the detailed plans to facilitate the gradual re-start of the UK’s economy. As well as recovery, there is also the longer-term lessons learned from the pandemic to ensure that the country is better equipped in the future to deal with any future public health crisis.
Whilst it is too early to draw firm conclusions and recommendations, both from an economic as well as a societal perspective, one obvious consideration is starting to emerge strongly. Namely, that we need to ensure that as a country we have a much greater resilience across key public sector roles, such as health and social care, and that we fundamentally review the definition of a ‘key worker’ to recognise those workers, often in relatively low-paid jobs, who keep the UK functioning.
Nowhere is this recognition more needed than in how we look to develop national, regional and local housing policies that seek to embed that resilience right at the heart of the communities where these workers are needed the most. Underlying this resilience is the need to house key workers in locations close to their work regardless of broader housing market pricing.
For many years Dolphin Living have championed, in a London context, the need for those workers who ‘keep the city alive’, and the need to increase the supply of key worker affordable housing in locations these workers want to live.
This reflects our primary charitable objective of providing homes in central London at below market rents that allows working Londoners on modest incomes to live close to their place of work. Our residents comprise not only those traditional key workers who have played such a crucial role during this crisis, such as health workers, the emergency services and teachers, but also those who play a key role in delivering and supporting London’s infrastructure over the longer-term.
Dolphin Living fundamentally believes that the need for housing for key workers in central locations has been evidenced by the coronavirus pandemic and the shift to new ways of working.
This crisis has forced us challenge many of the assumptions we have made about how our cities function. In particular we need to reconsider the notion that we can accommodate key workers on the fringes of London and beyond, yet still depend upon them in times of emergency to be available 24/7, often with little or no transport infrastructure to support them. This approach will surely result in a loss of key workers to central London as long commutes are even less desirable in light of the pandemic.
As a response we need to fundamentally review how we provide sustainable critical services alongside additional investment to support housing for keyworkers where they are most needed. The current issues relating to transport capacity considering social distancing disproportionately impact upon many of those we would define as key workers, who often cannot afford any alternative other than public transport and cannot work from home.
However, that is not to suggest that we should be seeking to deliver these new homes without some consideration around the locations and housing key workers actually want to live in. For it would be a mistake to look to re-create the police accommodation blocks of old without any notion of genuine and real choice for the key workers upon whom we all rely.
This notion of locational choice is something we have spent a considerable amount of time reviewing following polling we commissioned YouGov to undertake. Perhaps unsurprisingly we found that commuting time is a top priority for working London renters: 56% ranked the distance or travel time to work in their top three priorities, and over a quarter (27%) ranked this factor first. Similarly, 55% ranked having public transport available within ten minutes’ walk in their top three priorities, and a fifth (20%) ranked the factor first.
When we analysed the findings further we found that a clear majority (65%) of working London renters believe that an acceptable commute time is up to around 45 minutes, and nearly all (92%) think it should be no more than one hour.
Housing delivery in recent years has focused on those in the direst need both economically and socially, subsidised by market housing that in London is unaffordable to median earners. An unintended consequence of this approach, in high value areas particularly, means that little thought has been given to the needs and wants of the key workers upon whom we rely, as highlighted by this pandemic.
Therefore, we are asking that the government’s recovery strategy commits to a massive expansion of affordable house building, including a significant proportion of intermediate rental housing, within London as part of the overall pledge to support the capital’s economy.
Olivia Harris
Olivia was appointed as Chief Executive in April 2017. Previously, Olivia was Finance Director at Dolphin Living, providing financial and commercial oversight on a wide range of property and related projects, including debt and fund raising.
Olivia is a Chartered Accountant and has worked for more than 15 years in the property industry and is Chair of the Westminster Property Association.
The Covid crisis exposes weaknesses at the heart of our housing system. The emergency ‘all in’ policy for rough sleepers, temporary eviction ban, lifting of Local Housing Allowance rates are all life-saving measures. But we should all be ashamed that our housing system is so broken that such interventions were needed.
Access to a safe, secure and affordable home is no longer available to hundreds of thousands of children and their families. Our whole housing system has to change and alongside national investment in genuinely affordable homes, major reforms to the private rented sector must be a core part of that change.
Labour Housing Group Patron Karen Buck MP, has done outstanding work on improving rights for renters, including bringing forward the Homes for Human Habitation Act in 2019. Labour needs to campaign for a private rented sector where renters pay a fair rent, are treated decently by their landlord, get their repairs done on time and can put down roots in a community.
There is hope that this is a moment to reflect on the powerful impact that our housing situation has on our health and inequalities in our housing system but this Tory Government is not bringing forward the legislation needed. For a decent and fair recovery, where no-one is left behind, we need urgent measures to keep renters safe and a programme of long-term reforms.
Renters need secure homes – this is better for them and for economic recovery. It is a huge relief for renters that the eviction ban has been extended to the end of August but there is so much more to do. Following years of collective action, the Government has scheduled the Renters Reform Bill, but we must continue to press them and our representatives in Parliament to make sure that it is debated and enacted as soon as possible. The sooner that Section 21 ends, the sooner that tenants can feel secure in putting down roots in their community.
Private renters have very few rights to information about their landlord or new home. It is not right that renters cannot check whether landlords have met certain standards. Mayor Sadiq Khan’s blue print for renters in London sets out how we can improve access to information for renters and we should campaign for devolution to local and regional authorities to establish accountability locally for landlords. For Labour activists, preparing for local elections in May 2021 will be a key moment to speak to private renters, listen to their experiences and work on local policies to support private renters.
As a local Councillor, I know just how hard it is to use the legislation available so that repairs are done on time, homes are properly maintained and renters are treated decently. The powers to take action on these issues rest mostly with local authorities who have endured a decade now of funding cuts. For a fully functioning private rented sector, which works for renters, landlords and the economy, we need a transparent and standardised funding settlement for local authority enforcement services.
The connection between housing and health was cemented in public policy nearly 150 years ago in 1885 in the Royal Commission on the Housing of Working Classes. This relationship was maintained when Nye Bevan became the Minister for Health and Housing in 1945. The Covid crisis reminds us just how linked our health is to our housing. We cannot afford to wait another 75 years before this connection is renewed in policy.
Many renters report not just a detrimental impact of insecure housing on their physical health but also a strain on their mental health. Not only are some of our most vulnerable households living in insecure homes but many of the key-workers who care for us, feed us and nurse us are spending their already low wages on private rented homes with very few rights. We urgently need transformation of the private rented sector, for a recovery that leaves no-one behind.
Rachel Blake
Rachel is the Deputy Mayor for the London Borough of Tower Hamlets. She was elected to represent the Labour Party for Bow East Ward in May 2014 and appointed to Cabinet in July 2015.
Rachel has held Cabinet Member roles for Regeneration, Planning, and Air Quality. Rachel is now the Cabinet Member for Adults, Health and Well-being.
She has previously been called in as an expert witness to the Housing, Communities and Local Government Committee on its inquiry into the long-term delivery of social and affordable rented housing.
Chesterfield; many of you will know Chesterfield as home to the Crooked Spire and gateway to the Peak District National Park. Some will know it has a proud history of engineering based on the North Derbyshire Coalfield. Eric Varley and Tony Benn represented the town in Parliament in the latter part of the 20th century. Toby Perkins has been the MP for Chesterfield since 2010. In December 2019 the constituency became a little dot of red in a sea of blue just south of Sheffield.
When I became the first woman Leader of Chesterfield Borough Council in 2017 the issue crying out for my attention was the rise in rough sleeping. Whilst the number of rough sleepers was insignificant when compared with London and nearby cities their needs were as complex and the associated anti-social behaviour created a continuous stream of complaints from residents, town centre businesses and visitors. Photos of sleeping bags and other paraphernalia next to the town’s coach station adorned the local press on a weekly basis.
The cause of this was a range of factors coming together. Some of the most common were drug or alcohol dependency, mental health issues or benefit changes, particularly the recent introduction of Universal Credit. We also knew that Chesterfield was attracting rough sleepers who saw it as a safer option than being in some of the surrounding cities. The generosity of local people, giving food, clothing and other items, combined with the lower risk of violence towards them, meant that some rough sleepers specifically came to Chesterfield.
In the same way that there was no one cause, equally there was no one easy solution. One thing clear to me was that, as the new Council Leader, I needed to act. One homeless rough sleeper was one too many. A collaborative approach was needed. So, I approached Hardyal Dhindsa, Derbyshire’s Labour Police and Crime Commissioner, who I knew was tackling a similar problem in Derby. Together with Toby Perkins we set up the Chesterfield Town Centre Summit. This summit, chaired by Hardyal, brought together all the public bodies (e.g. police, Chesterfield Borough and Derbyshire County councils, NHS, Probation…), the voluntary and faith sectors and the business community to tackle all the issues.
The group’s work is focused on three linked areas: Enforcement, Treatment and Support & Campaigning, for instance against government welfare reforms and for strengthening legislation against “legal highs” among other issues which had undoubtedly impacted on the situation on the streets. By working together, the various agencies avoided duplication and identified any areas where support was not currently provided so that both could be addressed.
Our greatest success was the establishment of a Winter Night Shelter co-ordinated by Derby City Mission. Whilst tragic cases of homeless people dying on the streets were being reported daily, every night through the coldest months we were able to offer hot meals, sleeping bags, health checks and conversation. The shelter was hosted by a different church on a fixed rota, so it was not too onerous a commitment for one church’s congregation and volunteers.
Chesterfield Borough Council, alongside two neighbouring districts, supported this work through its funding of voluntary agencies. We built a strong working relationship with local homelessness charity, Pathways, and others who support the hard-to-reach homeless.
Within Chesterfield council itself, our Homelessness Prevention Team works to provide accommodation for anyone who needs it and is a key player in the North Derbyshire Homelessness Forum, which brings together a range of agencies who are working to prevent homelessness and support people who are rough sleeping.
Little did we know when we closed the doors on our second successful year of the shelter’s operation at the beginning of March this year that the collaborative multi-agency working model developed out of the Town Centre Summit and the North Derbyshire Homelessness Forum would serve us so well during the COVID 19 Pandemic in responding to the government’s demand to bring “Everyone In”.
Led by Chesterfield Borough Council’s Homeless team manager, Derbyshire’s councils have brought in 80 people so far (as at beginning of June 2020), with the majority having been placed in hotel accommodation.
Some of those placed have already been found longer term accommodation, and a recovery plan has already been written to deliver intensive support to individuals experiencing overlapping and challenging issues such as offending, drug and alcohol misuse and poor mental health.
Those placed have been given three hot meals a day and it is hoped that, for some, this stability will give them a chance to seek a more permanent change, especially as support to everyone will continue.
We are now at a crossroads because the hotel accommodation, although effective, cannot be retained beyond the end of June 2020.
Chesterfield Borough Council has therefore led on the development of Derbyshire councils’ “Keeping Everyone In” recovery plan, which has now been submitted to the Government. The plan will ensure that we have the resources to re-house as many people as we can on a permanent basis, whilst continuing to offer the necessary essential support.
The rapid collective response right at the start of the pandemic and our transition now to recovery was only possible due to initiatives such as the Town Centre Summit and the long-standing Derbyshire Homelessness Forum.
I would also argue that this type of response is only possible when there is clear, decisive political leadership such as that demonstrated by Derbyshire Police and Crime Commissioner Hardyal Dhindsa, Toby Perkins MP and myself.
Labour leading the way and making a difference to people’s lives.
Councillor Tricia Gilby
Tricia Gilby is the first woman Leader of Chesterfield Borough Council and a Labour Councillor for Brimington South.
