Housing notes 2016


Notes about

Housing and housing policy

in 2016

Now that I have published the whole of my book on housing policy, I am keen to update the work with news and information that is coming in all the time.

Government housing: a scandal

15th August 2016

The Dispatches programme broadcast tonight by Channel 4 did a convincing job of highlighting the housing crisis and revealing the Government’s failure to achieve even its own targets in meeting the growing demand for affordable homes.

As the programme resume ‘explains Harry [Wollop] investigates the failure to build enough houses and questions the government’s commitment to solving the problem. He finds out what happened to a plan to sell off enough public land to build 100,000 new homes, and discovers deals with big developers at a potential loss to the taxpayer. He also finds large areas of sold-off land sitting empty, while millions of people cannot find an affordable home.’

The programme highlighted the sales of land by the Ministry of Defence where housing has not been built and where the price of the sale was well below what a property expert estimated was the market value of the land. The Cameron government make promises about the number of homes that would be built on land sold by the government and the Dispatches programme found that the target of 100,000 new homes has nowhere near been achieved.

I was incensed by the revelations made in the programme. So much  so, that I was moved to write here that a central agency should be created – a government department – through which all public land sales should go. That Department should be under the kind of scrutiny normally applied to the workings of central government.

The people working in this central agency should be experts in the field of land and property; their brief should be to get the best possible price for public assets and to ensure that land sales are sold to secure public benefits and not just sold to the highest bidder on the open market.

Prior to the changeover in power when May took office, the record of the Government on tackling the housing crisis has been abysmal – years of broken promises, years of failed targets, years of incompetence and mismanagement and we are now no better off as a result. if Theresa May really wants to do better she has to realise that building new homes is only part of the answer; it forms only a small part of the solution to the country’s housing crisis.  New build is a slow and expensive way to meet housing need; it will only succeed if planning consents are tightly controlled and enforced. Allowing the Ministry of Defence to do as it pleases when it sells off land is clearly a recipe for disaster and failure. A new land agency would help Ms May to achieve what she said she would do and make sure that Downing Street keeps control of what happens to land once it goes into private ownership.

Buy-to-Let impact on house prices

In April 2016 the press reported that house prices reached an all-time high even though there was strong demand in the market. Investors chased property deals as they sought to buy before the stamp duty tax increased on 1st April. Analysts saw the demand from buy-to-let investors pushing up prices. Following Brexit, house prices wavered by the longer-term picture shows prices holding steady despite the doom and gloom affecting other economic indicators. In August the Bank of England cut interest rates; good for borrowers such as mortgage payers and this might give a boost to the housing market. Wages are not seen to be keeping pace with house prices leading many of those hoping to get a foot on the property ladder to opt for rented accommodation.

Tenancies failure

Kate Webb writes for the Shelter policy blog about the government’s plan to remove security for social tenants (8th March 2016.)

New clauses to the housing and planning bill are proving to be controversial.

Web says

Shelter is concerned that constantly churning people through social housing will be hugely destabilising to families and communities. But new research also suggests that the reform will fail even on its own terms of ‘making best use of stock’.

She goes on to say that

Now new research shows that early adopters of fixed term tenancies in the UK have also become disillusioned with them because they have proven to have limited scope to free-up social lettings. The researchers concluded that landlords were also sceptical that short-term tenancies were effective in increasing social mobility or shaping household’s behaviour.

The research she refers to was undertaken by Heriot Watt University in February 2016. The researchers published their interim findings.

What stood out for me, reading through the report was security of tenure. One aspect of this is the way that successive governments have used social housing to influence the behaviour of tenants considered to be ‘anti-social’, ‘welfare dependent’ or ‘deviant.’ The report points to use of probationary periods in social housing from 1996 onwards. The Localism Act 2011 allowed landlords to introduce fixed-term tenancies, subject to a statutory minimum of two years. It all smacked of ‘deserving poor’ and the others who are poor but whose behaviour causes problems.

As Webb comments

The researchers concluded that landlords were also sceptical that short-term tenancies were effective in increasing social mobility or shaping household’s behaviour.

and she goes on to say

Research into early use of fixed term tenancies in England found that the majority of households were anxious or concerned about their lack of housing security. Families with children, older people or people with disabilities and long-term health problems tended be most anxious about their long-term prospects.

This throws a spotlight on a very important issue – tenant security. It’s an issue I discuss in my book. Those who shape security of tenure seem to be concerned about being locked into providing accommodation for people who are ‘problem tenants’ – those whose behaviour is troubled and troublesome. Anti-social behaviour orders were fashionable but there is little evidence that they worked all that well.

Researchers have looked at how local authorities and the government have used social housing as a weapon to attack anti-social behaviour and lack of civility in neighbourhoods. Welfare providing is viewed as being increasingly conditional on good behaviour. Now the economically deprived must be not only ‘deserving poor’ but well behaved poor.

Source: Shelter policy blog

Renting

More and more younger people who cannot get on to the property ladder are having to rent flats. The BBC news programme East Midlands Today ran a story about young renters (14th April 2016) in which they drew attention to the cost of new houses rising faster than average incomes. Renting is one of the few options open to younger people who cannot afford to put down a deposit for a house of their own. This is particularly the case in London but it also affects the East Midlands. The Government’s notion of creating a nation of homeowners is failing, partly due to the incoherency of its own policy as the Chancellor raises stamp duty on buy-to-let properties. People aged 20 to 39 are being locked out of the housing market, compared with previous generations. Unable to raise deposits and access mortgages, an increasing proportion of young adults have no alternative but to rent their homes. In the news item it was claimed that buy-to-let landlords rushed to purchase property before the increased stamp duty came in. This took away houses from first time buyers, it was suggested in the news piece. Average wages in the UK are failing to keep up with the rising cost of new homes. Even rents are rising faster than salaries in some areas.

I looked at the website for Generation Rent, the body that is developing a national network of private renters and local private tenants groups.