Tag: Housing

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Labour’s London Assembly achievements and what winning a majority could mean

Looking across the waters of the Royal Victoria Dock to The Crystal by Matt Buck is licensed under CC BY-SA 2.0

Housing is one of the biggest challenges facing Londoners. Keeping housing affordable, especially in the face of the Government’s cost of living crisis, has been one of the biggest priorities of Labour at the London Assembly.

Red Brick readers will know better than anyone the outcomes that come from the perfect storm of low supply, high demand, few protections of renters, recent hikes in interest rates and a decade of Government policy that has been dedicated more to keeping developers and landlords happy rather than providing housing.

London Assembly Labour’s work is helping protect our city from the damage the Government has done to the rest of the country.

While the Mayor has been delivering London’s Affordable Housing Programme, along with other crucial measures like the Council Homes Acquisition Programme, funding for domestic abuse shelters and emergency homelessness support, Labour Assembly Members’ campaigns have focused on what the Government in Westminster needs to do to support Londoners.

Particularly, we’ve seen wins on our campaign to raise Local Housing Allowance (LHA). Until last year, LHA rates had been frozen since April 2020 at 2019 levels – meaning that they would cover the cheapest third of homes in a local area as it was calculated based on the 2018/19 rental market. The huge jumps in rent since then were ignored by the Government, meaning that those claiming Local Housing Allowance were sometimes priced out of up to 98% of homes in an area – or had to cross-subsidise from the other meagre benefits they were entitled to.

Along with my London Assembly Labour colleagues, I campaigned for this to be raised – seeing the rate returned to a third of the market price. By putting pressure on the Secretary of State, along with raising the profile of those with lived experience of Local Housing Allowance, we were able to make sure that the Government weren’t able to ignore the issue.

The Government didn’t build in annual revaluations of LHA, so we know that this will need re-raising in coming years, but, hopefully, for now, this change will provide some much-needed respite for some of our city’s most vulnerable.

We’re the largest party on the Assembly, supporting the Labour Mayor, Sadiq Khan, but we don’t have a majority.

On 2nd May, our hope is to win more seats on the Assembly to build support for some of the most urgent housing issues facing our city.

Firstly, we must tackle the crisis in temporary accommodation. We know that councils spend £90 million every month on temporary accommodation – a 40% increase from the year before. Although there are some good temporary accommodation providers, we know many Londoners are forced into insanitary, overcrowded, and hazardous living conditions.

We know that everyone in temporary accommodation would rather not be there. They often end up in this crisis by being asked to leave informal situations – “sofa surfing” with friends or family – where they can no longer be accommodated, or private tenancies coming to an end (increasingly through Section 21 ‘no fault’ evictions). Sadly, 64% of those in temporary accommodation are families with children. For many of those, the problems with the private rented sector and an under-supply of council housing means they are in temporary accommodation for months if not years.

This is the outcome of several years of failure: council underfunding, decades of right to buy meaning that the council houses were privatised without being replaced, low overall housing stock meaning that the cost of temporary accommodation is going up, and few rights for renters meaning that those in precarious situations are much more vulnerable than they need to have been. Our capital is seeing some of the worst temporary accommodation pressures, so London Assembly Labour won’t let the Government continue to ignore this problem.

Secondly, Sadiq Khan and London’s Government are focusing on council housing and affordable rent in the next stage of the Affordable Housing Programme – with the first stage seeing more homes for purchase built. Readers may have seen his pledge to build 40,000 council homes by 2030. Seeing how urgent the situation has become, this will also be coupled with schemes like the Council Homes Acquisition Programme that will subsidise councils to buy homes in their areas for their housing stock. We’ll make sure that the Tories in City Hall don’t cause problems for this programme, which we know will change lives.

Finally, we know that as a result of the crisis in supply chains stemming from the 2022 mini budget, labour costs and materials prices have slowed down construction across the country. In London, we risk housebuilding grinding to a halt it the Government doesn’t step up the funding for the Affordable Housing Programme. They are the ones who got us into this mess – we cannot have a generation of Londoners missing out on affordable housing as a result. Labour in City Hall make sure that the Government doesn’t oversee these problems getting worse and instead properly funds housing in London.

London’s housing crisis has been decades in the making, and it will take ambition from local, regional and national governments to address it. London Assembly Labour is just one piece of this puzzle, but we’re an impactful one – and we’ll make sure that our housing crisis doesn’t get worse for the next generation of Londoners.

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From promises to delivery – making Labour’s housing goals a reality

One of Labour’s most significant pledges ahead of the next general election is a promise to build 1.5 million homes over the next parliament. Doing so would go a significant way to tackling the housing crisis, particularly if such a level of construction were maintained in the long term.

However, this will be particularly difficult to do given the spending constraints which the party is also promising to maintain. At the recent Mais lecture, Shadow Chancellor Rachel Reeves promised to only borrow to invest, and to maintain the Conservatives’ fiscal rule of ensuring that debt was on a track to fall after five years.

Speaking at Labour Housing Group’s 2024 Annual General Meeting, Toby Lloyd presented a roadmap for how this might be achieved. Toby is an independent housing consultant, formerly Head of Policy at Shelter, and advised the May government on housing issues, with previous experience as a policy advisor for local councils, housing associations, developers, and the Mayor of London.

Toby’s presentation covered a number of key themes on how Labour’s housing promises could be delivered while maintaining their fiscal rules:

Making the existing system work:

The 1.5 million home goal is ambitious – the last time that this was achieved in a five-year period was from 1968 – 1973. While tinkering with elements such as the planning system may be helpful, relying solely on this, or on any other tweak will get in the way of the need to deliver – a Labour Government will need to hit the ground running and work with the system as it is, at the same time as initiating more fundamental reform.

Ensuring committed money is spent:

Eye-catching sums of money committed for unlocking or building new housing have recently been returned to the Treasury. These include two thirds of the £4.2bn earmarked for the Housing Infrastructure Fund, and £255m allocated to building affordable homes.  

Part of the reason that these funds have not been spent is inflexibility on the Treasury’s part – rules set by them in how the money can be spent mean that inflation and viability changes can quickly scupper a project. Adding flexibility into how these funds are spent will not only unlock this money, but will be crucial to ensure that future pots does not face the same issues.

Encouraging diversity in housebuilding:

Part of accepting the reality of the existing situation is realising that private sector developers will continue to deliver the overwhelming majority of homes for the foreseeable future. However, with the market as weak as it currently is and land values likely to fall, there is less incentive for developers to build, rather than to withhold their land supply.

In the short run there will be opportunities to acquire stalled private schemes and convert them into affordable homes, while in the longer term decent funding social housebuilding will be a key to restoring diversity to the sector, so that councils, housing associations, small builders and community groups can all contribute. Not only will this be crucial for providing homes for those facing the most acute housing need and driving up quality, it also will help make the whole development system less vulnerable to market cycles and so raise overall housing supply.

Strategic planning:

While tinkering with the planning system will do limited good in the short term, reasserting the proactive state role in shaping the development system will be crucial to achieving the 1.5 million homes goal.

Key to this will be reinvigorating spatial planning, which the state has taken largely abandoned over the last 14 years. Implementing a national spatial plan which clearly identifies the locations for strategic growth, and delivering this in partnership with regional and local stakeholders, would give a greater degree of purpose to the planning system.

This will be particularly important for the delivery of New Towns, best devised as extensions to existing settlements such as the new Cambridge Urban Quarter. In order to deliver these, Development Corporations with Compulsory Purchase powers will be needed to ensure that land is acquired for a fair price.

Improving existing stock:

While building new homes is key, the number of existing dwellings which fail to meet quality and safety standards is a crisis in itself.

Funding is needed for a ‘Decent Homes Programme 2’, to upgrade existing stock to current energy efficiency and safety standards. This will have significant savings down the line from lower energy bills, improved health outcomes for residents, and a decrease in major safety risks.

However, the UK’s definition of fiscal debt is unusual in including the debt of public corporations, including councils borrowing to invest in housing stock. Changing the measure of public debt used for fiscal rules to exclude this ‘public corporation’ borrowing would remove incentives for the Treasury and local authorities to ignore this pressing need.

Q&A:

After his presentation, Toby answered several questions from Labour Housing Group members on a variety of topics including siloed thinking in government, ending homelessness, ensuring that homes with planning permission are built, and empty homes.

We are grateful to Toby for speaking at the AGM, and look forward to working with him further.

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A Tenants’ Manifesto

Avondale Square Estate, Old Kent Road. Image by Simon for Flickr, licensed under CC BY 2.0 DEED

Our leader, Keir Starmer, has vowed to enable communities to take control. This got me thinking about how we make this a reality for social housing tenants.

The Grenfell Tower tragedy and the death of Awaab Ishak have highlighted why it is critical that tenants have an effective voice. The responsible organisations, Kensington and Chelsea ALMO[1] and Rochdale Boroughwide Housing Association had tenants’ representatives on their boards. The problem was that they could not affect the culture and practices of these organisations.

The challenge is captured in the introductory paragraph of the London Tenants Federation (LTF) 2021 Tenants’ Manifesto.

As social housing tenants, we and our homes are often written about by government ministers, journalists, think-tanks, charity policy teams, architects and academics. Some portrayals are sympathetic to us, but many are not.

The vast majority of these ‘experts’ have no experience of living in social housing. It is essential for us that a strong and articulate social housing tenants’ voice is heard in respect of the decisions made about our homes and communities.

In 2016 the Conservative Government drove the Housing and Planning Act through Parliament with next to no engagement with tenants. I cannot imagine a government passing legislation affecting the private sector without consulting with lobbying organisations. The outcome was that the Act was passed, but was not enacted, because the in-coming Prime Minister, Theresa May, realised that it would cause too much hardship.

The reason that social housing tenants are disempowered is due to class. Most social housing tenants are working class, however there is also the sadly familiar intersection with other forms of discrimination.

The starting point of tenant empowerment and even more importantly improving the living conditions and safety of tenants, must be adequate funding for social housing. Councils and housing associations have been systematically underfunded for decades. Most councils are now reporting that they do not have sufficient funding to make their ageing stock liveable and safe. Social housing tenants have experience of making ‘tough decisions’ about priorities in their personal lives and this is an expertise that they bring to decision-making. However, it is unfair to expect tenants to serve on boards and take on legal and moral responsibility for housing that is insufficiently funded to be safe.

A tenants’ voice

Tenants either know best or a very least can bring a helpful insight. They need a voice at a local, regional and national level. Active tenants make a difference. I can walk onto a housing estate and tell from the standard of cleaning and communal repairs whether it is benefitting from an active tenants’ association. I marvel at the varied mutual aid initiatives that happen on many estates.

Effective empowerment requires training and support for both the unpaid, tenants, and paid, officers. Those being paid may need training to help leave behind negative stereotypes and to support them to deliver the outcome that tenants desire. Tenants also need support to engage effectively. We need to acknowledge that open democracy can bring to the fore difficult people, whose bad behaviour, if not effectively challenged, will alienate others. Tenant engagement is risky, the biggest risk is that there is no outcome from the consultation and that those who got involved are never seen again and their experience of powerlessness is reinforced.

The 2023 Regulation of Social Housing Act gives individual tenants new rights as customers but is weak on collective rights. When the Social Housing Regulator finds its stride, it should require housing providers to demonstrate that tenant engagement has made a tangible difference to the way services are delivered. The same criteria should be applied to funding applications to build new homes. Why should we be funding organisations who are not managing their existing homes well to build more homes?

A tenants’ levy

Councils, ALMOs and housing associations fund landlord lobbying organisations, but there are no parallel, equally well-funded, bodies for tenants. Landlord organisations may encourage collaboration with tenants’ groups on issues of mutual interest, such as increasing the supply of social housing, but there is little evidence of engagement on issues where tenants may have a dissenting voice, such as the CEO’s salary. Landlords should look again at the fairness of this arrangement. Also, a tenants’ levy of say a penny on the rent each week by every housing provider could help fund independent tenant activism.

Neighbourhood management

Tenant empowerment presents the greatest challenge for the largest and most geographically dispersed housing associations. Many areas have several social housing providers operating within them. I live on the eastern side of the Old Kent Road in Bermondsey, South London. We have a concentration of ageing, under-invested in social housing. Landlords include Southwark Council, City of London Corporation, Peabody and Hexagon. Problems on one estate spill over on to others. What we desperately need is a coordinated approach to investment, management and support for our community. My proposal is that diverse social housing providers devolve responsibility and funding for housing management to a new local and democratically controlled neighbourhood management organisation, whilst retaining ownership. This would allow councils and housing associations to use their assets to build new affordable homes, whilst management would become local and better.

These neighbourhood management organisations, would have a board of elected tenants, operate in urban areas where there is a high density of social housing and cover around 2,000 homes. Funding would be provided by existing housing providers contributing what they currently spend on housing management and maintenance into the neighbourhood pot.

Tenants Empowerment Grant

Up until 2010 there was a Tenants Empowerment Grant (TEG) of around £1m per year in England. It was slashed by the Government in 2010 and then abolished in 2015.

TEG paid for the support and training that council tenants needed to exercise their Right to Manage. 140,000 council residents on 130 estates have taken on the direct management of their homes. Tenant Management Organisations (TMO) consistently achieve higher levels of tenant satisfaction than the rest of the council stock. Tenants’ groups that gain confidence managing their estates often undertake wider activities to support their community. TMOs must hold a formal continuation ballot every 5 years to test with their residents whether they are staying true to their principles and they retain tenants’ support. If a TMO fails to gain the support of its tenants the TMO folds and staff lose their jobs, this level of jeopardy has a profound and positive effect on the culture of the staff team.

Whilst the Right to Manage still exists, without funding for training few tenants’ groups have been able to exercise this right since 2010. As well as restoring the Right to Manage as a funded option for council tenants, the right should be extended to housing association tenants. As with a neighbourhood management organisation, housing associations would still retain the asset and the rental stream, minus a management and maintenance allowance, therefore their ability to build new homes will be unaffected.

TEG also paid for tenants to explore options short of full management control, For instance a group of tenants may be particularly aggrieved about estate cleaning standards and want to take it over.

National and Regional Tenants’ Lobbying Organisations

Just before the TEG was cut in 2010 moves were underway to create a body known as the National Tenant Voice to represent the interests of social housing tenants and be a sounding board for the government.

In 2022 the Government set up a rebranded Resident Opportunities and Empowerment Grant of £500,000 for partner organisations to bid to provide training, capacity building and independent advice. This is exactly one of the roles that a national, mass-membership, representative tenants-led organisation should be performing. Hopefully, when the current contract comes up for renewal there will be such an organisation in place.

The LTF argue for a tenant-led think tank to generate policy ideas, rather than just respond to the agenda of the government of the day.

With Labour committed to greater devolution to regional authorities, tenants’ representation at this level will become important. A model is provided by Sadiq Khan’s Housing Panel, in which representatives of Londoners at the sharp end of the housing crisis advise on housing policy.

Combined approach

There are different approaches that people can take to collectively improve their housing situation, tenant associations, tenants’ panels, TMOs, housing cooperatives and community land trusts. If funding exists, the funding streams are separate. There is an argument more joint working, lobbying and sharing of ideas will give tenant empowerment a higher profile.

Community Land Trusts and other community organisations are playing a vital role in encouraging support for new housing developments when local opposition may be an issue. Hopefully, the Labour Party will not lose the idea of transferring unsafe homes from the private sector into public and community ownership. During the 1970s, 80s and 90s tenant cooperatives demonstrated that they could restore rundown street properties in a cost-effective way.

Low cost-high impact

We all know that Labour will inherit the consequences of the Tories’ financial mismanagement. In the context of overall government expenditure the cost of the proposals outlined is small, however their adoption will demonstrate Labour’s commitment to empower some of the most voiceless citizens of this country.

For too long tenants’ voices have not been heard with devastating consequences, if we can win the next election, we have the chance to change this.

I want to apologise to participants in the 2019 London Tenants’ Federation and 2023 London LHG conferences, whose ideas I have stolen without crediting them. My theft would be too egregious if I do not mention Sharon Hayward, Pat Turnbull, Lee Page and Cllr. Mick O’Sullivan.

Andy Bates is a member of the LHG Executive. He has recently retired from full-time work after 40 years working in council housing. For 27 years he was manager of Leathermarket JMB, a TMO in Bermondsey, South London. He is now an associate for Community-Led Housing London and TPAS, a CIH tutor and board member of Wenlock Barn TMO.

[1] You may be more used to references to Kensington and Chelsea Tenant Management Organisation (TMO). This is a name that the organisation gave itself. However it is an important principle that it is correctly referred to as an Arms-Length Management Organisation (ALMO). Kensington and Chelsea own over 9,000 council homes. Every other TMO is much smaller, managing between 50 and 1,500 properties, with more direct resident involvement and scrutiny than was the case in Kensington and Chelsea. For a fuller explanation read Pete Apps’ excellent book Show Me The Bodies: How We Let Grenfell Happen

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Student Housing & the Next Labour Government

As a recent graduate, I remember vividly the housing experiences of my time at university. Most students have horror stories about their flatmates coming home late and causing a ruckus, or messy nights out (and the following 9am lectures), but if you dig a little deeper, you’ll find stories of horrendous housing conditions, absent or hostile landlords, and university housing teams that often aren’t able to provide detailed or timely advice. In fact, as is sometimes the case, these teams aren’t there to help at all, such as with one current student telling me that “(their) university provides almost no guidance on seeking accommodation beyond halls.”.

While it should be said that many universities try their best with what resources they have, the crisis is national. Even the most effective university housing departments will struggle to plug the gaps without serious governmental intervention.

The problem we face

Many students in the private rented sector suffer in sub-par housing, paying extortionate rents, with nowhere and nobody to turn to for help. Often, the only ports of call are overstretched and underfunded charities like Shelter and Citizens Advice. This problem is exacerbated by the fact that many parents of students (especially those from lower-income backgrounds) are themselves renters and, in many cases, don’t know their own rights. This means these parents are often not in a position to lend help or advice when their children face housing issues.

During university, I had a drawn-out experience with a landlord who was personally quite hostile, and importantly did not abide by the law. A few of the breaches were fairly serious, such as not having a proper HMO licence for part of our stay, and not protecting our deposit in time in line with the regulations. HMO licences were introduced by the last Labour Government in the Housing Act (2004), alongside the requirement to properly protect tenancy security deposits with government-approved schemes. The licences were intended to improve housing conditions in places where properties were ‘Houses in Multiple Occupation (HMOs)’, as these are often where the most vulnerable reside, and deposit protection was introduced to afford tenants an impartial adjudicator where disputes arise over damage – as they so often do.

HMOs in England and Wales generally cover households of three or more unrelated groups, with mandatory licensing at five. Their purpose was to set down strict requirements regarding things like fire safety. Local authorities can set their own ‘Additional’ or ‘Selective’ schemes, with lower barriers before licensing becomes mandatory (for example, fewer tenants needed before a licence is required).

What recourse do students have?

If students face similar situations, what recourse is available? Some, but only if they know they it’s there. For example, with HMO regulations there is legislative provision for claims in some cases, but most students wouldn’t even know that HMO licences exist, much less how to deal with a situation where a landlord doesn’t have one. Other situations, such as when a landlord doesn’t protect a deposit in line with the law, can cost in excess of £300 to bring (unless you qualify for help with fees). They also have specific and somewhat arcane procedures that must be followed, lest a student open themselves up to cost and procedural arguments by a landlord who can likely afford a solicitor.

Claims like these can require in-person court hearings, which can be intimidating for anyone, let alone someone such as a student. Many also feel it to be pointless – as another student tells me: “students will live as they are, as they’re moving out in a year anyway” – something that law-breaking landlords no doubt rely on. Local authorities do have the power to prosecute landlords who break some of the more serious rules, but it is hardly surprising that in an era of mass funding cuts, they have run out of the time and money to do so.

The regulation is not enough.

The above covers claims with legislative recourse, but many breaches do not have such clear-cut paths to remediation or, even more importantly, preventing further transgressions. For example, many private tenants are used to landlords and agents demanding access to their property, sometimes without proper notice, and sometimes for spurious reasons. Many are unaware of quiet enjoyment, which is an implied term into every Assured Shorthold Tenancy, and guarantees ‘quiet enjoyment’ of the property without undue interference from the landlord or those acting on their behalf. Of those who are aware and choose to enforce it, they tend to have very little success. Damages in such cases are minimal if existent at all. At best, they might (in more serious cases) be able to obtain an injunction. This again, though, requires the tenant to not only be aware of their rights, but also the method (and perils) of enforcing them.

Where do we go from here?

So, how is this dire situation to be rectified? We can start by building on the successes of the last Labour Government.

The introduction of penalties up to 3x the deposit for non-compliance with the regulations were very effective. Allowing Rent Repayment Orders for non-compliance with HMO licensing regulations were also a good step forward. But we must go further. If a student does find themselves in need of advice, universities should be their first port of call. As such, government should legislate to ensure university student unions have an in-house or contracted full-time worker to deal exclusively with housing cases and advice. These individuals would ideally be lawyers, or at least have some form of legal training. Universities should also be encouraged to set up support groups and networks for students to share experiences on housing and how to deal with situations.

Aside from the private rented sector, many students in university-run halls are considered in law to be excluded occupiers (they are specifically excluded from protections afforded to tenants under the 1988 Housing Act and a subsequent Statutory Instrument), and therefore do not have the same rights and recourse that Assured Shorthold Tenants do. Labour should legislate to remove this loophole, ensuring that the protections apply equally to all tenants, regardless of who owns their housing.

In addition, Labour should build on the good work of the introduction of mandatory HMO licencing schemes, by lowering the threshold for mandatory licensing to that which many local authorities have rightly chosen: 3 or more unrelated people/households living in one property. This would provide greater protection to students especially, but also some of the poorest and most vulnerable in society, who often have little choice but to share accommodation.

Section 21 (no-fault) evictions are often used as a last line of defence for landlords guilty of breaking the law and being challenged on such breaches, and so it goes without saying that these must be scrapped. This must be implemented carefully, however, as some landlords may choose to raise rents to an unaffordable degree as a no-fault eviction by proxy. Measures therefore must be put in place to avoid this.

Of course, all of the best regulation and rights are pointless if tenants don’t know they exist or how to enforce them. This is why a key priority needs to be proper funding for local authorities to enforce regulations and dissemination of materials detailing rights and remedies to tenants, particularly students. This can be done in many ways, such as via public information campaigns, reframing the ‘How to Rent’ guide as aimed at explaining rights and remedies (including, for example, methods of claim), stricter penalties for landlords not providing the guide, or by encouraging universities and local authorities to provide the information actively to students.

These policies will not singlehandedly solve the wider housing crisis we face – but they would go some way to providing a more stable and equitable housing situation for many.

Johnathan Guy is an LHG member and Labour activist, currently working as a software engineer for a startup.

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More Snakes than Ladders

Occasionally an article comes along that encapsulates what you’re thinking. In the January 11 Economist there was an article entitled ‘The Housing Ladder, 1950-2005’ (https://econ.st/48Svcls note paywall) which came close to summing up my gloom about housing policy over recent decades. Its key theme is that ‘a redundant metaphor (the housing ladder) is blinding policymakers’.

The ‘housing ladder’ has been with us as an idea for a long time, and I remember being subject to endless images of ladders when I was on the board of a major housing association, being used to justify turning away from the production of social rent homes. It was linked closely to the other deadly notion of aspiration, which was of course defined in a way that suited the new policy. 

I used to argue a) that the first step on the real housing ladder is a decent affordable home in any tenure, noting that the ladder might only have one rung, and that b) being brought up in an aspirational working-class family meant that my parents wanted their children to stay at school and have better chances in life, their own wishes to own a home were real but secondary. I always hoped that the housing ladder as a concept would wither away and stop being so damaging to the emergence of a comprehensive cross-tenure housing policy, but it looks once again that it will be the main housing topic when the general election comes.

Of course, calling out the housing ladder as a myth is likely to get you classified as a wild-eyed loon – it is so firmly in the centre of housing’s Overton window (ie the range of acceptable opinion) and is used by media and politicians of all shades all the time – so it’s great to see a serious mag taking the idea to task.  

‘The housing ladder’ is the notion that aspiring people will naturally progress (through thrift and hard work – and by avoiding smashed avocado on toast) from buying a modest flat (or even a share of one) at a young-ish age then trading up over the years as incomes grow and housing equity increases. 

Graphic: The Economist, based on ONS data.

The problem is the facts no longer fit the fable, as the article shows. Home ownership peaked 20 years ago at 70% and has since fallen despite vast policy interventions. The ratio of house prices to earnings was around four from 1950s-1990s and is now eight. Home ownership before 30 is now around a third when it used to be more than a half and is increasingly dependent on inherited wealth or family support. Those who make it onto the ladder are much less likely to trade up. The flood of easy mortgage finance across the world following financial deregulation is now a thing of the past, after the USA mortgage market triggered the global financial collapse, and homeowners’ vulnerability to higher interest rates is now plain to see. The Tories, at huge cost, have tried to reinvigorate home ownership through demand subsidies, but the 1990s paradigm isn’t returning any time soon.

The Economist, data from the Resolution Foundation.

The article places the right to buy of council homes in this context, noting that this ‘one time trick’ transferred a tenth of the housing stock from the state to private ownership in a little over a decade, costing billions but giving a major boost to the appearance of success of home ownership. It also comments that even the successful implementation of the target to build 300,000 homes a year for a decade would only reduce the house-price to earnings ratio to 7. It argues that the ageing population means that homes recycle back onto the market much more slowly than they did.

Normally if I make this kind of argument I get challenged with the sneer: ‘I bet you are a homeowner’. Indeed, I am, and I’m a classic housing ladder person although without much trading up – starting in a council house, fortunate to buy a share of a £15,000 London house in a poor area in the 1970s because it was cheaper than private renting, just when Westminster Council allowed joint mortgages between unrelated people for the first time. All I had to do was sit and watch the value rise. But the responsibility of the lucky generation – mine – is to think about what policies are suitable for the less lucky generations that have followed.

So, as the article states, the private rented sector is no longer ‘a waiting room’ prior to home ownership. It is a destination. Social housing has been shrunk massively and deliberately and can no longer meet more than a small share of need. Those who get into home ownership are taking on mortgages well into normal retirement age. The housing costs of older people – home owners and private renters alike – are escalating rapidly, pensioner poverty will rise, and the state will catch much of the burden.

“The housing ladder may have died two decades ago but its allure as a metaphor remains. That continues to blind Britain’s politicians and voters to the reality of the property market. Rather than harking back to a bygone age, Britain’s politicians need to accept that there is more to housing than home ownership.”

The Economist.

The case I’ve always made is for a comprehensive national housing strategy that covers all tenures, building on their strengths and tackling their weaknesses. It will take a generation to turn things around and to stop housing costs crippling most of our households. In case you doubt it, I support home ownership as the preference and the best solution for many households. It will rise again in a sustainable way when peoples’ incomes rise in relation to property prices, so we should build more, subsidising supply where it is sensible but not wasting cash on demand subsidies that push prices up. We must tackle land costs and developers’ profit-first models. We must build much more social housing for those that need decent homes at lower rents, a hugely successful model that requires investment but not ongoing subsidy. And we must professionalise the private rented sector, the last great unmodernised industry, defining its role more clearly as home ownership and social rented gradually climb back, as surely they will.

See ‘The Housing Ladder, 1950-2005’, The Economist Jan 11 2024. Online https://www.economist.com/britain/2024/01/11/the-housing-ladder-1950-2005 (note paywall). No byline.

Steve Hilditch was a founder member of LHG when it formed 42 years ago, and edited Red Brick blog for 10 years, publishing a compendium book of 100 posts in 2020. He has worked as a housing professional and consultant, advising the last Labour Government, various Select Committees and many Labour Councils on housing matters. He recently carried out a detailed housing review for the new Labour Westminster Council.

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Poll Position

By comparison to 2022, this year has been rather steady, at least in terms of political polling. Britain Elects’ poll of polls tracker generates an average share across all published polls and recorded the Conservatives’ share as 26% on 2 January, 25% on 30 November. The equivalent figures for Labour were 47% and 44%.

Consistently strong leads in the polls and several stunning by-election results served to bolster the sense that the Labour Party is a government-in-waiting. According to Ipsos, nearly 2 in 3 Britons expect Labour to form the next government.  

Part of the reason for this is the damage wrought to the Conservative brand since 2019, particularly in terms of sound economic management. As a colleague has put it, the next election could well be a case of “better the devil you don’t know…”

Alongside this mainly repetitive pattern in headline voting intentions, there have been some important developments in public sentiment and discourse in relation to issues which look likely to feature at the next general election. 

One of these is housing – an issue which Bagehot, The Economist’s political columnist, identified as the starting point of “most problems in British politics”. He also framed the ‘Builders versus the Blockers’ conversation on housing this year, subsequently adopted by Keir Starmer and Lisa Nandy among others.

Here are ten features of public opinion in relation to housing, drawn from Ipsos polling on the topic this year.

1. Labour continues to perform well among mortgage holders, and owners.

This tenure has been the last remaining ‘bellwether’ tenure since Labour won over private renters in 2017. Across September to November, Labour’s share among mortgage holders was 47%, much improved on the estimated 33% it got in 2019. This matters because of the tenure’s voting power; mortgagors were 25% more likely than private renters to turn out to vote in 2019.

2. The public have a dim view of the Conservative’s record 

Just 18% of voters think the Conservatives are doing a good job at improving housing in Britain. Those who voted Tory in 2019 are more generous but, even among this group, just 29% were positive. Importantly, in June, three-quarters of Britons attributed rising mortgages to the government’s economic policies.

3. This translates into a strong Labour lead on the issue.

Asked which party has the best policies on housing, 40% say Labour, 14% the Conservatives (the party’s largest lead of 11 policy issues). No surprises really given this is the historical norm, but Labour had been trailing on the issue at the end of the 2000s.

4. Housing has become more salient in voters’ minds.

In 2005, on the eve of the general election, just 5% of people spontaneously mentioned housing among the most important issues facing the country. It simply wasn’t top-of-mind and its salience fell to similar levels during the pandemic having been 17% at the 2019 general election. Our last measure was 18%.

5. The housing crisis is local and global.

Ipsos found housing to be a top five issue determining the way people voted at May’s elections (ahead of immigration). While all housing is local, housing crises exist worldwide. A global study this year found new housing supply to be the top infrastructure investment priority (among 14 options) in Australia, Ireland, Canada, Chile, Germany, Netherlands, and Poland.

6. The housing crisis is an affordability crisis, especially for renters…

At the turn of the year, we found a third of private renters reported spending at least half of their personal monthly income on their rent. In May, we found half rated the availability of affordable properties to rent as a very serious problem. Social housing is also believed to be in short supply. 

7. Under-supply is seen as a political failing, but people matter too…

Overly restrictive planning features near the top among a list of reasons for the undersupply of housing but, in the public’s eyes, comes behind political disinterest and local opposition.

True to form, the same Ipsos polling found public support for new housebuilding to be very conditional on the detail and practicalities. The public are more ‘maybe’ than nimby or yimby, implying a need for astute local leadership on the issue.

8. Confidence is low…

Two-thirds lack confidence Britain will build enough homes in the future. Most people expect homelessness to get worse. Many aren’t sure that a change of government will make things better.

The public are bold on housing and supportive of action – this year we added provisions contained within the Renters Reform Bill to our list of rent caps, taxing second homes, and extending Right to Buy (yes, that) of popular policies. Above all, people want to see evidence of action because they haven’t seen much so far.

9. …but positivity is possible (and necessary).

Our research for Prince William and the Homewards initiative showed that facts, figures and case studies have the potential to shift perceptions into more positive territory. When people are shown that schemes like Housing First can make a sustainable difference to homelessness and can deliver savings and alleviate pressure on public services, they become more engaged and more encouraged that some progress is possible.

10. Don’t assume people are as interested as you!

In May, two in five Britons and a similar proportion of private renters said they had not heard of the Renters’ Reform Bill. And while private renters are widely recognized as having had the rawest deal from actions taken by the Conservative government in recent years, this group has the lowest propensity to vote.

This depends on the issue – in June, three-quarters of Britons said they were following news about rising interest rates very or fairly closely, a higher proportion than were following stories about public sector strikes and the war in Ukraine.

The next general election campaign will likely amplify, but also disrupt, what we’ve witnessed during 2023. As it is on much else, Labour may be in poll position on housing but the race isn’t won yet.

Ben Marshall

Ben is a Research Director at Ipsos UK and long-time commentator on public opinion and housing. He has managed for-policy research and evaluation projects for a range of clients including the Chartered Institute for Housing, Shelter, DWP, DLUHC, The Royal Foundation (supporting Homewards), Create Streets and The Economist.

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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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Wanted: A Long Term Plan for Home Energy Efficiency

Anthony lives in a 1970s bungalow owned by his local housing association in Greater Manchester.  His home was part of an energy efficiency pilot scheme, where the housing association installed solar panels, triple glazed windows, new doors and cavity wall insulation.  The retrofit works have brought his home up to Energy Performance Certificate B, which means, in energy performance terms, his 1970s bungalow is now pretty much good as new.

It’s clear from talking to Anthony – on a visit with his local Labour MP – that the work had made a real difference to him. Not just cost savings, but also the benefits to his health. He told us:

“The solar panels are great – some days the smart meter hardly moves and it’s keeping my payments down. The triple glazing is amazing; it’s so quiet now, where it was noisy before.
“Overall I feel like the heat stays in my house and I haven’t needed to have it on as much.
“This work has changed my life completely.”

You hear stories like Anthony’s whenever you visit residents who’ve benefitted from investment in the energy efficiency of their homes. And there’s an increasing number of them.  In a quiet revolution, housing associations and councils across England have spent the last few years piloting ways to make homes cosier and greener.  We’ve now got approaches that work in a range of circumstances; what we need is the support to roll these out to more homes.

That means a long-term plan for home energy efficiency.  The reason retrofit has never reached scale before is the stop-start, feast and famine approach to funding that consecutive Governments have adopted.

The Social Housing Decarbonisation Fund, which contributes to the cost of energy efficiency upgrades in council and housing association homes, is a good example. Last Autumn’s bidding round offered up to £800m of match-funding to councils and housing associations.  The round this Autumn is worth just £80m.  A welcome top-up, but not the long-term, predictable funding that councils and housing associations need.

Why do we need support from Government?  Simply, because the cost of energy efficiency works is huge. The housing association sector alone is planning to invest £70bn by 2050 in the fabric, heating systems and components of their existing homes. But fully decarbonising all housing association homes – vital to deliver on net zero ambitions like Labour’s green power mission – will cost at least a further £36bn.

Government support helps us fill that gap.  Every penny the Government invests in energy efficiency is a penny that doesn’t have to come out of budgets for much-needed new social housing.

And there’s consensus across our sector on what’s needed.  We want to see the current Government bring forward the balance of their pledged £3.8bn for social housing decarbonisation as soon as possible.  That would create the certainty our sector needs to continue their good work.

In the longer-term though, we need a much more ambitious plan to deliver energy efficiency improvements in social housing – and in other tenures, too.  There’s broad consensus across those working on greening our housing that a commitment of at least £6bn per year is what’s required to roll-out energy efficiency improvements at the scale needed to tackle our cost of living, energy security and climate change crises.

That’s why – at Labour Housing Group’s retrofit fringe in Liverpool – we were pleased to hear Shadow Minister for Clean Power and Consumers, Jeff Smith MP, reiterate Labour’s commitment to delivering a £6bn per annum warm homes plan by the end of a Labour Government’s first term.

Our homes are fundamental to our health and wellbeing. Decent and affordable homes like Anthony’s must be available for everyone, but right now they’re not.

The lack of a long-term plan for housing has led to the housing crisis we are living through today. The issues we face around housing are systemic. If we don’t act to fix the housing crisis, things will get much worse for people living in England.

A sustained commitment to funding energy efficiency works at scale is a vital part of the long-term plan for housing that we need.

Social housing has a retrofit model, we know what works, but we need the support to roll out that model at scale.  It can start in the social rented sector but moving quickly into the private rented sector, where standards are worst, and into the owner-occupied sector.

So we need support from all political parties to invest in energy efficiency.  It’s the biggest single thing parties can do to make sure that more people benefit from works like those to Anthony’s home; improvements that – in his words – have changed his life.

Rhys Moore

Rhys is the Executive Director of Public Impact at the National Housing Federation

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Tracy Harrison

Tracy is the Chief Executive of the Northern Housing Consortium

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The Home Straight

Housing and a generation of new towns was a big theme of the Labour leader’s conference speech this October — rightly so

The battle lines have been drawn. October’s party conference season has seen the Conservatives and Labour start to position themselves ahead of next year’s general election on issues such as climate change, economic growth, education, and public health. And, as YouGov’s Patrick English put it, Labour has gone “hard on housing.”

It would be wrong to judge a party conference solely on its leader’s speech, but these are big moments (although we shouldn’t overstate the extent to which they cut through with voters). While Rishi Sunak’s keynote didn’t cover housing — the Prime Minister and Michael Gove had set out a housing plan previously in July — it was front and centre of Keir Starmer’s.

The Labour leader described “bulldozing” through Britain’s sclerotic planning system (and reforming it) to get houses built. He also sought to reframe conception of the often-not-green belt, referring to its car parks and wasteland as the ‘grey belt’. This drew a clear dividing line with Sunak who had previously criticised Labour’s approach to housebuilding as threatening the “concretisation” of Britain.

Starmer said he would “over-ride” local opposition in the national interest although, in more sober rhetoric, subsequently described getting the “balance right” in the central-local dynamic.

Echoing colleague Rachel Reeves, Labour’s leader described siding with the ‘builders’ not the ‘blockers’ using the language of an influential column by Bagehot in The Economist (Duncan Robinson used Ben Ansell’s analysis which showed that support for housebuilding is concentrated in major centres of support for Labour and also, importantly, the Red Wall).

Housing is political gold for Labour for three reasons. First, voters already put it in front on the issue — the party has a 28-percentage-point lead according to Ipsos’ most recent measure (a year ago) — so it starts from a position of strength.

Second, it is a valence issue where there is broad consensus meaning competence matters – but the public is critical of the Conservative’s record on housing in government — and, third, an image one, allowing Labour to talk to personal and national aspiration as well as fairness and the ‘securonomics’ apparently at the core of its strategy.

But to ‘weaponise’ rather than ‘neutralise’ housing as an issue, Labour must continue to increase its salience — just as the Conservatives have done this year with immigration — drawing out points of difference and cutting through apathy. The issue isn’t top-of-mind for enough people and has historically featured well down the list of vote-shaping considerations at general elections. When the going gets tough, and it usually does with delivering housing, even the tough don’t get going.

The premise for a step change in housebuilding isn’t as keenly felt by the public locally as it is nationally. While most people link insufficient supply with affordability, many don’t. Opinion is more ‘maybe’ than nimby or yimby. The why and what of building new homes are just as important to people as the where and how many?

Another challenge is that people are cynical about prospects for improvement. For example, Ipsos has found people putting political disinterest as the number one reason for the under-supply of housing, slightly ahead of local opposition with the restrictive planning system further behind.

On the face of it, both parties would subscribe to the Liberal Democrat’s position of building “the right homes in the right places”. Both support the reform of planning and further building. Labour’s 1.5 million homes in 5 years is similar in number to the Government’s current target. There appears to be consensus in the form of ‘gentle densification’, the use of design codes and standards, and behind the Renters’ (Reform) Bill.

In Manchester, Michael Gove announced just over £1 billion committed to 55 towns to be spent over 10 years, but it was Starmer’s new towns that was more eye-catching and potentially politically smart. When Gove reaffirmed the Conservatives commitment to housebuilding, some said that his strategy was to build in Labour’s backyard (with the exception of Cambridge) to assuage the concerns of Tory-leaning voters. Labour’s plan to build new towns would involve creating whole new backyards!

This is probably the reason why YouGov found 53% of Britons supporting ‘new town-sized settlements in areas with significant unmet housing need’ last week. Similarly, nine years ago, a survey for Lord Wolfson whose economic prize that year selected the best idea for building a garden city, found just 13% would oppose new garden cities. Little wonder though given the way these were presented to respondents in the survey!

There are considerable ifs, buts and maybes associated with building new settlements. But that doesn’t matter for now. At this stage, Labour is looking to boldly bring solidity to its pitch to voters that it has realistic ideas to fix and change Britain and will do things differently. It is asking questions of the Tories, of those involved in housing, of voters, and also of itself.

It’s too early for Labour to “go back to [its] constituencies and prepare for government”. But with potentially 6–12 months left before the election, it’s not premature to build on the progress it made at conference this week and prepare the detail of a plan for genuinely improving housing.

‘The home straight’ first featured on Ben’s blog: https://benm77.medium.com/ 

Ben Marshall

Ben Marshall is a Research Director at Ipsos UK and long-time commentator on public opinion and housing. He has managed for-policy research and evaluation projects for a range of clients including the Chartered Institute for Housing, Shelter, DWP, DLUHC, The Royal Foundation (supporting Homewards), Create Streets and The Economist.

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We Need to End National-Grid Lock

There are two existential threats to our country’s future: tackling the climate emergency and fixing Britain’s housing crisis. Future generations will not look kindly on us if we let these two systemic issues run on unresolved for another decade. They might seem like two distinct challenges, but they’re connected by one key piece of infrastructure: the National Grid.

Two Critical Priorities: Housing & Energy

In my hometown of Bracknell, the previous Tory council oversaw anaemic house building. Last year, only 390 houses were built. The situation for social and affordable housing is far worse. From 2017 to 2022, Bracknell Forest built only 8 homes for social rent. Meanwhile, 1,690 families are stuck on the council’s housing waitlist. 1.2 million families are on waiting lists throughout England.

Now, with a Labour council leading Bracknell since the local elections, there is real hope for change. But grappling the housing crisis requires national, as well as local leadership. And with a Tory government crippled by NIMBY activists in its own ranks, it is clear Rishi Sunak has no leadership to give on the issue.

Nationally, Labour has set forth a bold set of proposals to get Britain building, including reforming planning laws and putting an end to so-called “hope value” blocking public procurement.

Energy policy also requires both local and national leadership. Labour has ambitious plans to retrofit and insulate existing housing stock, to make it more energy efficient, and they will create GB Energy, a publicly-owned energy company focused on renewables.

At a local level, it is great to see Labour embracing co-operative and community energy schemes, which will empower communities and drive local economic growth.

Unlocking Grid Capacity

Tackling both climate change and the housing crisis require us to face up to a significant challenge.  The capacity of the National Grid is far too low, and creating new connections takes far too long. Any new house puts increased strain on the electricity grid; only compounded by the transition to electric cars, heat pumps and other green technologies. And new onshore wind farms and solar panels need to be actually connected to the grid if they’re going to help us reach Net Zero by 2050.

John Pettigrew, the Chief Executive of the National Grid, has said that “we will need to build about seven times as much infrastructure in the next seven or eight years than we built in the last 32”. Strategic planners have suggested the grid needs £54 billion of investment to meet green goals.

Housing projects are already being delayed or rejected because of local shortfalls in National Grid connectivity. The National Grid currently operates a first-come-first-served system for connecting new projects, which means any delays have a knock-on effect – and ready-to-go projects are facing years-long delays.

One problem is that expanding the National Grid to build more homes also requires planning permission. And just as house building can attract local controversy, so too can projects to expand the grid. An incoming Labour government needs to be ready for this.

The other major issue is, of course, money. That’s why it’s so welcome to see Labour committing to spend £28 billion on green investment by the mid-point of next parliament. A proportion of that will need to be spent on upgrading the National Grid.

As Keir Starmer said when unveiling Labour’s green agenda, “we’ve got to roll up our sleeves and start building things and run towards the barriers – the planning system, the skills shortages, the investor confidence, the grid.”

Only a Labour Government can show the leadership we need to end a National Grid-lock.

Peter Swallow

Peter Swallow is Chair of Ealing Central and Acton CLP and a researcher at Durham University

@PDJSWALLOW
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