Innovation in housing

3rd March 2017

Innovation in housing supply

England is not good at dealing with its housing crisis. The government has lacked imagination when it comes to thinking about how to deal with the under-supply of houses and what stands out about the response that it has been making is an almost complete lack of imagination.

Let’s looks at some of the ideas that could help to bring a quicker solution to the problem of meeting housing needs. Firstly, using imaginative methods to create places to live in.

Manufacturing prefabricated units at considerably less cost than building with bricks on site. Companies are already making living units in factories. These are transported in a nearly-finished form, put in place and services connected and all this can be done at considerably less cost than building houses with bricks and in less than half the time. Using modern materials and up to date methods of fabrication, the production of such units has already started and is proving to be successful.

Several British companies are now offering modular homes for as little as £80,000. Units of this kind are constructed to a high standard of energy efficiency, thus reducing their running costs. Because modern techniques and materials are being used in their manufacture, they can be tailored the needs of the clients. The key factor is that they can transported to site and finished very quickly. Sales of these unites have been good and the house-buying public as shown a real appetite for these innovative units.

Many of the units currently available require land; that can be a problem for many local areas where inner urban building land is in short supply. However, some of these units, designed for urban life, are stackable, making better use of the smaller inner city areas that result from site clearances. In fact, in some cities (where space really is at a premium) units have been placed on top of existing buildings. They are lighter than conventionally built penthouses.

The units are ready to have electricity, drainage and water connected when they arrive on site. Inside one of these units the accommodation is very similar to modern apartments. If you were to walk into one of these units you would think you were in a flat in a newly built apartment block. That is enough to convince many prospective buyers that these are viable living spaces. The size of units ranges from one bedroom to four bedrooms. On the whole, stackable units tend to be low rise projects, if they are stacked on top of each other. Providing three or four tiers of units does not involve much infrastructure.

Pre-fabricated units are a real alternative to traditional buildings and offer a serious solution to the housing crisis. They are affordable in a way that conventional brick-built houses are not. Prices are considerably lower than for the equivalent amount of inside space provided by conventionally constructed houses. Being comparatively light, they can be built on piers allowing car parking space to be provided at ground level. They can thus be erected over existing ground-level car parks. Some units have been designed that employ solar panels to supply electricity. The materials used to make walls and roofs use eco-friendly materials and allow modern materials made from recycled plastics to be used.

Not just cheap

Many of the units currently available offer cheap solutions to meeting urgent housing need. They can also provide homes for other sectors of the housing market, in areas where land is more freely available. If we can provide housing stock for the higher ends of the market (I mean units from £100,000 to £300,00 or more) it would lead to purchasers freeing up existing accommodation. That would also relieve pressure on demand at the lower end of the market. Some of the prefabricated units are clearly intended for the wealthier end of the market; people who can afford the land required and can afford to put services and drainage in place. Providing more units at this end of the market will enable movement to take place that would, I would argue, reduce the pressure on the lower-priced sectors and free up opportunities. Thinking back to what I said before on the renewal of existing urban housing stock, these units could be very useful on sites where redundant properties need to be demolished. Instead of replacing properties with brick-built houses, these prefabricated units could be installed at much less cost and in a fraction of the time. In urban areas, the challenge is not to create new land but rather to use existing land more effectively.

The goal of housing policy should not be to do things on the cheap but to provide housing that is of good quality at prices that people can afford – people who are desperate to have homes but who cannot afford to climb the ladder of conventional housing. When we look at the units being offered by the prefabrication suppliers, we see a lot of architectural and engineering expertise has gone into the design. Much more intelligence has been used by designers in the prefabrication sector than we see in traditional housing building.

So why aren’t we doing it?

The housing crisis is not that difficult to solve. The bigger problem lies in our members of parliament – the people who make the decisions. They are like an old record that got stuck – endlessly repeating the same old formula about building housing with bricks. I have argued before that brick-built houses are not the most viable option for the situation we have in this country. Until our policy-makers move away from that antiquated mantra, we are unlikely to make progress.

We need people with imagination to head up future housing policy. Not just in the palace of Westminster. Local authorities could do a great deal more to provide housing in their areas but this will require both elected members and officers in housing departments to change their long-established, entrenched, attitudes about to how to do things.

The goal is simple: provide quality affordable housing cheaply and quickly. You cannot do that with bricks and mortar.

Learning from failure

The housing acts of the last twenty years are widely regarded as being failures. Successive governments have failed to respond effectively to the growing problem inadequate housing supply. Recent responses by the present government looked very much like knee-jerk reactions that had been poorly thought through.

The housing White Paper of February 2017 achieved one thing: it recognised that the housing market was broken and needs fixing. Little else of worth was contained in it. But then a white paper does what a white paper does; it opens the door to consultation. The white paper realised that there is a need to encourage diversity in the housing market. It said:

Action to help small independent builders enter the market given including through the £3 billion Home Building Fund. Currently around 60% of new homes are built by just 10 companies.

Those ten companies are brick builders and they are part of the problem – not part of the solution. If we want diversification in housing supply we have to break that monopoly. In my view that means providing incentives for non-brick fabricators to do a lot more. If the Home Building Fund is in fact to provide much-needed scope to enabling new methods of construction, then we will be well on the way to dealing with the crisis in the supply of affordable homes.

Another thing that Sajid Javid said the White Paper:

The proportion of people living in the expensive private rented sector has doubled since 2000 and that more than 2.2 million working households with below-average incomes spend a third or more of their disposable income on housing.

If there are more people in the renting sector then we need to find ways of supporting them. I very much doubt that we will see a significant decrease in the rental sector over the next ten years – what ever else happens to housing supply. What would help the rental sector is to provide a much more diverse range of options and an robust increase in the number of apartments that are available to rent. Building high rise apartment blocks in urban areas is one way of increasing supply but it is not the only one. Policy-makers need to be much more imaginative; that means letting go of traditional methods of building construction and focusing more on innovative contemporary techniques.

The government consultation on planning policy and legislation in relation to planning for housing, closes on 2nd May 2017. From the Government website we see that:

Many of the changes involve amendments to the National Planning Policy Framework. The Government intends to publish a revised Framework later this year, which will consolidate the outcome from the previous and current consultations. It will also incorporate changes to reflect changes made to national policy through Written Ministerial Statements since March 2012. These are:

Support for small scale developers, custom and self-builders (28 November 2014), etc.

The statement about support for small scale developers is one of nine topics. It might prove to be one of the most important. Interesting to see the word ‘custom’ in there.

Turning things around

The history of housing legislation – in the past twenty years or so – has been littered with outmoded, poorly thought-through measures that have failed to make an impact on housing supply and that is why we now have the crisis that we see today.

It is not just the reluctance of policy-makers to embrace new methods of construction that leads of failure. It is also their inability to devise new methods of finance. We have known for a very long time that there has been a shortage of traditional mortgage finance. Tackling this issue probably does not lie in reforming banks and building societies; some of it might be but what is more likely is that we have to devise new methods of providing finance to prospective home buyers. We might well have to replace the mortgage with a new way of financing home ownership.

Sajid Javis is an old-school thinker; he is still chanting the mantra of building new houses and his record is clearly stuck in the groove of bricks and mortar.

Two groups of people are at a severe disadvantage in the housing market: the young and old. Young people have not been working long enough to have saved up enough money for a deposit. They are dependent on the ‘bank of mum and dad’ – if they are fortunate enough to be born to relatively well off or wealthy parents. Older people can often find themselves unable to access mortgages because of their age; mortgage providers frequently view retired people as being bad risks when it comes to paying off housing loans.

These two groups stand to gain from the introduction of new methods of construction. Because these units cost a great deal less, they are more affordable and much less capital is required to buy them. If smaller loans are required, existing mortgage providers might be more willing to lend, over a shorter period of repayment. This in itself will not solve the problem. What we need is a totally new approach to financing access to housing – one that is not based on lending large sums of money over twenty five years. We should rely on only the private sector to provide home loans.

Think of it this way – people are financing cars costing between £20,000 and £50,000 without facing the up-hill struggles they experience when trying to finance a home to live in. Cars do not hold their value as much as homes over a period of years. The chance of a car being written off due to an accident is considerably higher than loosing a home due to, say, fire or natural disaster.

Housing is an issue of fundamental importance; many other aspects of our lives are pivoted on having a suitable and satisfactory home. If our country is to become a better place in which to live over the next twenty years or so, we must be able to deal with the housing crisis that we face today.

References

February 2017. YMCA response to housing white paper.

February 2017. The housing white paper.

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I have written about a lot of different things. In this list I have created a number of subjects under which I have placed links to pieces that are available on this blog.

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See also ‘Internet and Web’ below

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Housing: approaches to policy (book)

What is a home?

Internet and web

Digital democracy re-visited

A place to live, a place to work.

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American Idiot (Green Day musical) review

An X-Factor for bands?

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Contents listed alphabetically.

Housing Policy 3

Housing: approaches to policy

by Trevor Locke

Part 3

Housing, employment and transport: why we need joined-up policies

In the previous part of this series, I looked at bricks and other kinds of building materials, and asked if there can be viable alternatives to traditional construction materials. I considered how building design might change to take account of the rise of new materials. I move on, now,  to discuss the kind of policies that are increasingly playing a part in the supply of accommodation.
It is often said that Britain has a housing crisis. The Government hopes to supply a million new homes by 2020 [Guardian, September 2015]. But, over the past four years only 47% of the amount needed in England have been built [BBC news, September 2015]. It is the scale of the housing shortage that leads people to talk of a crisis. The National Housing Federation was quoted as saying that about 245,000 new homes were needed each year in England. Gill Payne, director of policy and external affairs, said: “In some areas, there is a drastic shortage causing prices to soar, putting homes out of the reach of many people” [BBC, September 2015] The BBC’s Inside Out programme on housing, drew attention to the shortfall in housing supply as matched against housing need between 2011 and 2014. The crash of 2008 is often blamed for this shortfall but it is not the only factor. According to the Inside Out programme ‘critics say the change has also made it easier for “inappropriate and unwanted” developments to progress.’ Politicians have criticised the National Planning Policy Framework of 2012, claiming that the said changes to the NPPF were required to ensure “the same weight is given to the environmental and social as to the economic dimension” with “due emphasis on the natural environment”. Clive Betts is quoted as saying “Councils must do more to protect their communities against the threat of undesirable development by moving quickly to get an adopted local plan in place.” Even The National Trust said the MPs’ report was another indication the NPPF had allowed “streetwise developers” to ignore the wishes of communities [BBC, 2014].
Housing is a minefield of conflicting policies and opinions. In order to navigate a path through this confusion, I set out my agenda of key policy issues: I begin by discussing the need for affordable housing before explaining why I think housing policy is the key to everything. I then look at the issue of renting before considering three interconnected policy areas – housing, employment, unemployment (economic status) and transport. I then discuss how better use can be made of existing housing stock. This agenda is about the need for joined-up policies.

The need for affordable homes

Are people ready to move away from standardisation and established traditions? If the media is to be believed, the average ‘Jess and Joe’ want to get married and start a family and as part of this, they want to own a home of their own. But does ‘Mr & Mrs Average’ want to live only in the traditional house? Through the medium of television, we have seen people who have abandoned the traditional notion of the house and built themselves a home from materials you would not find on the average housing estate – such as blocks of straw. Others have done away with the conventional idea of a slate roof and covered their structures with earth and grass.

Many recent television programmes have shown people restoring old buildings, converting them into family homes often by doing the work themselves. Flat roofs have not been popular but the development of new materials has now made them much more viable. The house-building industry is still providing large quantities of structures based on the traditional idea of two stories with individuals rooms for different purposes: lounge, kitchen, bathrooms, bedrooms, etc. House designers have not moved on in their concept of what constitutes the kind of houses that people want to live in; but then, neither have house-buyers.

In post-war Britain there was a trend to build ‘pre-fabs’ – prefabricated houses built in bits in factories and then assembled on site. Prefabs were cheap, cheerful and provided a quick fix to the shortage of housing after the blitz. The decades of the 1940s through to the 1960s brought us the baby boom and, as those generations grew into adulthood, demand for housing increased. Recently, the lack of access to mortgages, following the financial crash of 2008, has led to an increase in rented properties. Couples and new families, not wanting to be stuck at home with their mums and dads, are going out to find rented accommodation, often because this is the only option open to them. In the urban areas this is fairly easy but in the countryside, it is much more of a problem. House-prices in rural areas are very widely beyond the reach of workers in villages and rural areas.

Today, the baby boomers of the 60s are down-sizing. Having brought up their families, couples find themselves living in houses that are bigger than they need. Couples, aged 60 and over, are moving into smaller properties. Whilst this should be releasing houses for occupation by younger people, the problem is that house prices have increased and the mortgages needed to buy these properties are hard to come by. Recent predictions show that ‘house prices are set to increase by more than previously expected in 2015. The CEBR now expects the price of the average home in the UK to rise by 4.7% – up from its March forecast of 1.5% growth. A chronic lack of properties being put up for sale has pushed up prices in recent months and is one of the reasons behind the upward revision to the forecast’ [Centre for Economics and Business Research, 2015].

The British are wedded to the idea of the single occupancy house as the basis for family life, unlike our continental neighbours, in Europe, for whom the apartment block is the standard form of housing. Single-occupancy houses are more expensive to build and require a lot more land, than is the case for multi-level apartments. House-builders and government policy makers see no need to attempt to change the public’s demands for the typical family unit; they are comfortable with the belief that families know what they want and there is no need to change anything. Political policy is wedded to freedom of choice and not much given to trying to change such choice. Politicians have made a big thing about new-build [Hope, 2016]. To them, housing supply is all about building new houses; it is hardly ever seen as being about the better use of existing housing stock. In order to get supply anywhere near the level of demand for houses, in England today, the solutions are always stated as being about building new homes. Only the more radical politicians give credence to the idea that the supply of housing might also include a wider set of options.
Our notion of affordability, in housing is important but it is strangled by our servitude to traditional ideas – more so now than it was in the previous century. If people really do want affordable housing, I would argue, then they should change their stereotypical ideas about what constitutes a home and the materials used in house-building. In any case ‘affordability’ is a relative concept; it is not just about the price at which houses are offered for sale – it is also about how much money people have to pay for them. Can people afford to buy new houses?

Well, certainly not in London. House prices vary considerably around the UK (as do incomes) and what is affordable in one region might well be too expensive in another. People cannot easily move from a high-price area to one where houses are cheaper, any more then they can easily chase after higher paid jobs in other parts of the country.  Newly elected Labour party leader Jeremy Corbyn has a policy on housing and in it he begins by saying ‘A secure home is the foundation of a happy life and decent housing for all is the foundation of the good society. For too many people their housing is not a source of security, but a cause for anxiety’ [Corbyn, 2015]. I pick this out, not because I am a fan of this politician, but because he has a neat way of saying things that I too happen to believe, such as, the above quotation. I go some of the way with him but when I read ‘The housing crisis cannot just be solved by building more homes, although this is a major issue that needs to be tackled. It is more complex than that: to tackle the housing crisis we also need to address problems of inequality, regional disparities of income and wealth, taxation policy, the labour market, our social security system and planning regulations’ I begin to part company with him. As I argue in this section, there is a need for joined-up policies but it is a matter for debate just how many policies need to be joined up to make a housing position that is credible and effective. It will take many decades to make an impact on inequality and disparities in wealth and income. These issues referred to by Corbyn are large-scale issues that are important but housing is something that people need today and demands immediate actions that cannot wait for a fairer society to develop. Corbyn goes on to set out a raft of practical measures that will, in his view, solve the housing crisis to which he refers. The challenge that confronts policy makers in housing is which policies can, and should, be joined together to create an effective approach (or strategy) to housing supply. Is it some of these issues that I now go on to discuss.

Housing is the key to everything

If you do not have a home, you cannot get a job. If you do not have a suitable home, you might find it difficult to marry and start a family. Most people who are homeless are also likely to be unemployed. It’s not just a question of being homeless. Often the problem is more about inappropriate housing and unsuitable accommodation and these can be pivoted on poor employment. Energy poverty rides on the back of inappropriate housing; people who live in accommodation that is not suitable are likely to suffer from high energy costs, which will lead either to inadequate heating or people failing to feed themselves properly, in order to keep up with the demands of energy suppliers. Poorly built houses are also likely to suffer from damp, drafts and lack of insulation. This is more likely to be typical of ageing housing stock. Modern housing has to conform to higher standards of building regulations.
Policy requires us to look at housing and employment in one single package; the two things are closely inter-related and you cannot deal with one without, at the same time, addressing the other. I will argue, below, that government policy makers are failing to do this. A population that achieves optimal levels of employment requires optimal levels of housing; that is my position but I fail to see this reflected in the manifestos of political parties or in the policies being issued by the government. Joined-up policies are not characteristic of today’s breed of politicians. This goes some way to explaining why the basis for home ownership or occupation is changing so much. When David Cameron said that he wanted to sweep away planning rules requiring the construction of affordable homes, in favour of first time buyers, did he stop to think what the employment requirements would be for that? The kind of jobs that would be needed to support loans for first-time buyers was not mentioned in his speech to the 2015 Conservative conference. It is pointless planning to build thousands of starter homes for a market that does not have the employment prospects needed for sustainable access to these markets. Coming up with a credible package would need alignments between employment and wages, mortgage lending and construction incentives. Meeting housing need targets does not depend on whether it is about buying or renting or any other form of tenure; it is all about how the employment economy either enables or hinders access to the finances needed for any kind of accommodation. We can only get to grips with the housing crisis once we have locked access to housing into access to jobs and have synchronised both of them. Part of this process involves working with income sectors, seeing how lower-income or middle-income families will fare as homes and jobs are brought together.

Renting a home

It is said that we need 250,000 new homes if we are to keep up with housing demand, [de Castella, 2015]. In that context what do we mean by ‘new?’ Do we mean new build or do we mean more supply of housing stock of all kinds. Around four million people are now renting their homes [Owen, 2014]. In many continental countries, renting is the standard tenancy. Now that house-ownership is so difficult to achieve in England, renting looks like it will become the most frequent approach to securing accommodation. For policy makers, the key issue is one of renting not being as secure, for tenants, as it ought to be.

New residential tenancies had increased 2.5% in the first month of 2015; ‘The figures show the highest growth occurring in the East Midlands, Scotland and East Anglia with rents rising 6.2%, 5.7% and 5% respectively.’ Furthermore, ‘the average rent in the UK is now £889, compared to £867 at the end of 2014, and £799 in January 2014’ [Property Wire, 2015]. This is still more than the equivalent monthly mortgage repayment. Lewis Dean said that ‘rental prices of homes in England and Wales have grown more than house prices for the first time in two years. Rents across England and Wales reached a new record high at £789 in June, 1.4% higher than the £778 recorded in May and up 5.6% since June 2014. The hike means last month was the first since July 2013 where rents rose more quickly than house prices for comparable properties, with this annual rate of house price growth standing at 4.5% over the 12 months ending June 2015.’ [Dean, 2015] Which is rather startling, given that economists are predicting that house prices will rise dramatically in the years ahead.

Since the crash of 2008, availability of residential mortgages has declined; the effect of this is that young people have either continued to live with their parents or have moved into rented accommodation. Added to this, a substantial number of older people have left large family homes and transferred to the rented sector. Renting a house or flat was no longer the preserve of students and people living in an area for a short while. A shortage of new housing has also fuelled this trend. The demand for rented accommodation has grown and this has led to an increase in prices, so much so, that the price of renting has increased faster than house prices. What dogs prospective renters is the requirement to provide a deposit. The majority of rents demand that a tenant must pay a deposit to cover fixtures and fittings. On top of this deposit (which is supposed to be refundable at the end of the tenancy) monthly rents must be paid in advance. It is common for landlords to ask for one months rent in advance. The law requires deposits to be lodged with a tenancy deposit scheme that is backed by the government [Government website, 2015].

If monthly rental payments are higher than for equivalent mortgage repayments, the impact on disposable income can be seen straight away. Disposable income for a large section of the population has been decreasing as accommodation overheads have gone up, both for rents, mortgage repayments and inflated energy costs. This has an impact on the economy as a whole; spending on retail products is lower than it might be, dampening demand and strangling the purchase of goods and services.
Following the general election of 2015, lending for housing purchase increased by nearly thirty percent. That sounds like good news, but the picture is far from optimistic. After declining for a long time, applications for mortgages have picked up. According to the Valuations Office Agency, ‘the median rent recorded between 1 April 2014 and 31 March 2015 in England was £600’ [Valuations Office Agency, 2015]; still more than the median mortgage repayment.

Predictions of the trends in renting suggest that it will continue to rise and to be a major method of securing accommodation for the foreseeable future. The main problem with this is that renting, in this country, is far from secure. The legal rights of tenants who rent their housing is complicated. If renting is to become the norm for a large sector of the housing market, something needs to be done about security of tenure. Linsey Hanley has argued that ‘There is nothing wrong with long-term renting per se: it’s the norm in most European countries, where the law tends to favour tenants. And so it should: a tenant’s need for secure shelter takes moral precedence over a landlord’s right to safeguard his income’ [Hanley, 2015]. This gets to the nub of the renting issue – that if the Government is to protect housing consumers then it must provide them with security of tenure and sort out the complex mess of legal rights that thwarts the ability of renters to stay in their homes.

As the Civitas report acknowledged, there are a lot of people who are denied access to other housing options, who are dependent on renting but their security of tenure is inadequate, under current law, and something needs to be done about this. The Civitas report argued that ‘A new regulatory framework should be considered that would curb future rent growth and improve security for tenants. This should include indefinite tenancies within which rents (freely negotiated at the outset between landlord and tenant) would only be allowed to rise in line with a measure of inflation’ [Civitas 2015].
The rented sector of housing is not just about private individuals renting out properties; in many large cities apartment blocks are owned by property developers and speculators, drawn into this area of investment by the strong demand for rents and the profits that can be achieved from renting. The tenants rent through local agents and have no relationship with these remote absentee landlords – most of which are anonymous companies often located far away from the properties they control. In the view of the Civitas report ‘In order to encourage investment in new housing, new-build properties would be exempt from this regulation, but landlords would be encouraged to enter voluntary longer-term arrangements with tenants where this is mutually attractive. Institutional investors might be particularly receptive to such a framework’ [Civitas 2015].

The problem facing law-makers, and those who drive political policy, is that they have to achieve a balance between security of tenure for residents and enabling investment in the rented sector for landlords. Moving the balance of rights and responsibilities too far in favour of tenants could deter landlords from bringing new properties into the market or even invite them to move their investments away from housing to other sources of profit. Security of tenure (or lack of it) can be a problem for those who cannot afford to buy houses; in many cases people have no other choice than to rent accommodation simply because they do not have the funds for a deposit on a house or cannot secure a suitable loan for the purchase. The terms and conditions of rented tenancies are often set to deal with problems, such as people who fail to pay their rent or move out without giving adequate notice. In my view, this is a mistake and the terms of rental agreements should address the basic principles of letting to responsible customers and leave it up to the law to sort out situations that go wrong. Giving tenants security is important because flats and houses are not just property – they are homes. Having a secure home is important to people’s health and wellbeing. It is part of a family’s (or individual’s) general security and getting the balance right should be the goal of both landlords and government policy and legislation.
This issue is brought into focus by the measure, announced by The Chancellor, in his summer budget (of 2015), that taxation benefits on buy to let are to be changed. The aim of the measure was to make taxation fairer for individual residential home owners. George Osborne said that his aim was to create a more level playing field between those buying a home to let and those who are buying a place to live in. Be that as it may, analysts and commentators are saying that the disadvantages of this measure will outweigh any benefits that it might confer; some maintain that the effect of the measure will be to raise rental levels and reduce the supply of accommodation. I examine the impact of the measure in my blog [ibid]. The Chancellor had added three cent to stamp duty on buy to let and second homes. This does not apply to properties of up to £40,000 in value. Landlords also face higher taxes on their rental income [This is money, 12th January 2016].

De-regulation of the housing market damages the long-term prospects for tenants and this can have a knock-on effect on the economy generally. Policy makers need to grapple with the relationship between jobs and homes and ensure that people have access to accommodation that offers them security of tenure. Lenders, such as banks and credit companies, do not look favourably on people with multiple addresses, who have moved house many times. They prefer clients who have lived at their current address for four years or more – not always easy to achieve when security of tenure is inadequate. Renters tend to be more mobile than house holders and can clock up several addresses in a relatively short period of time (staying put in one place for an average of 3.5 years.) Even if we discount students (who rent homes whilst they are studying and then move on when they get a job elsewhere) renters move more frequently than house-owners.

Government policy-makers are faced with a variety of tenures; when it comes to forging policy to do with security of tenure, they have to fit it into social housing, council housing, some other less common forms of tenure, as well as the private rented sector. Such policies are subject to moral and ethnic debates that focus on the rights of individuals to security; there is nothing wrong with that but governments are more likely to be concerned with the financial and commercial consequences of the law. Even so, individuals are worried about their security rather than the profitability of property speculation.

For economists there are several issues in all this. The percentage of income that goes into providing somewhere to live (and energy to run it) is a factor determining the outcome of disposable income. The national economy relies on strong consumer demand for products, food and domestic retail consumption. Increasing housing costs are not good for the economy as whole. The strength of the economy has always seen employment rates as being a key factor. Economists are beginning to realise that the cost of housing is a key factor in determining the strength of consumer demand. Housing costs are nearly always the biggest single expense for families and individuals and rising accommodation costs hold down consumer demand for goods and services in the domestic sector. This is true both for mortgages and rents and for energy costs. Building a strong economy involves joining up policies that affect employment, housing and transport.

Housing and employment

Most people in this country need two things: somewhere to live and a job to pay for it. There is a reciprocal relationship between housing and employment. People need a home in order to get and hold down a job; people need jobs in order to be able to fund a home and meet their energy bills. People are locked into this ‘catch22’ cycle of needing two things at once. This works well when times are good but when people lose their job or their homes are put in jeopardy, they find themselves in trouble.

If we are to have policies that work, we must be able to make housing and employment work together in a way that reinforces them both. So, how does the housing market relate to employment? What proportion of the labour market can afford housing?

What people are being paid relates directly to the type of housing they can access. Those with well-paid jobs, that have long-term prospects, will be able to attract mortgages. Mortgage providers are less keen to fund those whose jobs are short-term or occasional – such as those on zero hours contracts. It is not always the level of pay that gives access to mortgages – it is more to do with the long-term prospects for continued employment that will fund a mortgage over its term (typically 25 years.) People who are on zero hour contracts are not good prospects for mortgage providers. Precarious employment arrangements are not good for home-ownership and access to mortgages and leases.

Despite the fact that the UK has a record level of employment – the best since 1971 – home ownership is as low as it was in the 1970s. Can government policies be synchronised so that there is both full employment and a strong supply of housing? Traditional home owners (in terms of their employment status) are becoming a smaller proportion of the labour market. It would be wrong however for policy makers to assume that they need only provide good employment to sort out home ownership and accommodation. You cannot buy security of tenure in the rented sector if it does not exist. You cannot get a mortgage if your income and job prospects are inadequate.

People who have to survive on precarious jobs are finding it more and more difficult to gain access to suitable housing. The Labour Party’s pre-election headlines (of 2015) placed emphasis on increasing the supply of new build housing; but if they do not have synchronised policies for employment, too few people who will be able to buy into that housing and the policy will fail. What people need, to access new-build housing, are jobs that offer long term stability and a predictable income. New build houses are more difficult to secure than rented properties or other forms of accommodation tenure. In some respects new building housing is not the answer – it is actually just part of the problem.

Around 15% of the labour force is now self-employed. There has been a huge increase in people gaining their primary income from a small business. ‘Nowadays, although it is not impossible for someone who is self-employed to secure a mortgage, it can certainly be a difficult process because lenders are far less willing to take what they see as a risk on those with a ‘non-standard’ income’, claims one website [Thisismoney, 2015]. Lenders want to see a history of business success and to be convinced that this will continue over the life of the loan. That immediately places people into age categories. With our ageing population, more and more older people are economically inactive and securing the best (most secure) accommodation is very difficult for people who do not have a secure income. Pensioners might be able to show that their income is secure but, if they are over 55, they will still find it difficult to get mortgages. Lenders are reluctant to provide housing-related loans over short periods.

In 1971, half the population was renting and the other half owned their homes. The number of people in work is now at its highest level since 1971. What proportion of employed people can afford access to housing? We hear a lot about the difficulties that people have in securing a mortgage, especially for those aged 20 to 25. These might be people who are in work but the kind of earnings they have, does not always give them access to housing. If we now have record numbers of people in housing, why are so many not able to get a mortgage or cannot afford to rent suitable homes?

Guy Standing has written about The Precariat, a social class formed by people suffering from ‘precarity’, which is a condition of existence without predictability or security [Standing, 2011]. Many of these are people whose income is precariously based on things like zero-hours contracts. These are casual workers who lack a long-term reliable income, the kind of income which would allow them to secure permanent housing. If your job cannot be relied on to provide you with enough money over a long enough period of time, then you are likely to have difficulties in accessing the kind of housing you desire. Housing requires permanent employment, a stable income over a long period and a level of income that will convince mortgage-providers and people who lease or rent apartments that you are a reasonably safe bet. Zero-hours contracts might offer a handy fix for some people, for some of the time, but in the long term they create disadvantage in terms of housing.

With the growth in unreliable employment and more risky self employment, gaining access to secure accommodation is presenting increasing difficulties. If the retirement age is increased beyond its current levels, this will also have a knock-on effect on housing. The Government’s commitment to increasing the level of the national wage, it is said, will result in large numbers of small businesses failing, including those that are self employed and micro-enterprises [Inman, 2015] That bodes badly for the housing market; mortgage defaults will increase dramatically and the overall level of personal debt will soar. The success of wage increases will be offset by the unintended consequences of failure to meet housing costs. We all thought that the national wage was a good thing; perhaps now we can see its unintended consequences we will have to think again.

Housing and unemployment

Older people are caught in traps with their existing mortgages and their inability to secure loans to fund a settled and secure old age. Older people are in the best position if they have equity locked up in an existing property that they own. However, many wish to pass on their homes to their children, who might find it either difficult or impossible to obtain a mortgage of their own. Where someone has substantial savings, they can offer a suitable level of deposit to secure a mortgage or a lease. Those aged over 60 are in particular trouble because they cannot provide the appropriate length of time needed to pay back a loan. ‘With less time to make the repayments than someone twenty or thirty years younger, the lender will need to know that you will have a sufficient income in retirement to be able to make the repayments and cover the term of the mortgage’ [Sosmart, 2015]. There is evidence that a variety of brokers are now setting out to cater for borrowers aged 55 or over, who do not wish to re-mortgage their existing properties [Eccles 2014] ‘Around 350,000 over 65s still have a home loan according to the Office for National Statistics – and over the next decade the Financial Conduct Authority says 40,000 retired people a year will see deals come to an end so they will have to re-mortgage or repay any remaining debt. With the average mortgage in retirement worth around £30,000 and some older people determined to trade up, not down, the challenges for borrowers are intense’ explains one website [Thisismoney 2015.] Older borrowers, aged 60 or more, find it difficult to secure loans for housing but it is not impossible, however difficult it might be. The additional problem they face is that their initial repayments might be higher than would the case with younger people, because older people have less time to clear the debt. Those aged 65 might be lucky enough to borrow over a 15 or 20 year term. There are few lenders willing to deal with people who are at or have passed retirement age. If the age of retirement is to go up, there will have to be changes to the way that funds are lent for house purchases or leases. This type of borrowing will be sensitive to the government’s long-term plans for state pensions. Even those with private pensions are by no means safe, given the uncertain future of their funds. Raising the retirement age purely for employment reasons will have unintended consequences for housing and hence the need for joined-up policies. Measures such as the national wage and raising of the retirement age need to followed through to see what will be their likely consequences for housing and consumer demand. These could prove to be deflationary measures.

Developing policy concerned with the housing needs of older people is not easy. For one thing, life-expectancy and health risks change, the older the age of the person. Where older people have an existing property, which they own or on which there is an outstanding debt, the options are there, however daunting they might be. But older people with no existing property ownership are in a dire position. Unless their circumstances can be catered for we will see the return of a level of poverty and homelessness in our ageing population that has not been witnessed since Victorian times.

Employment, these days, is far more varied than it ever has been. Gone is the age of the life-time, permanent career. Getting a secure, full-time job with a good salary is increasingly difficult and the labour market is now geared to younger people; employment for people over 50 is a real challenge. Housing choices are dependent on income and if you can’t find paid work and self employment is not an option, then you might be in a precarious position. Jobs might well be available elsewhere but if you cannot afford to move to access those jobs, then you are stuck. Large numbers of people are commuting long distances in order to get jobs not available in their home localities. Older people find it difficult to move because they are tied to the localities in which their dependants live and the families on who they are dependent. Economic migration within the UK is not an easy option for those aged 60 and over.

Employment and transport

Employment is often dependent on transport. Some policy markers have added transport into the housing/employment equation. Some have gone on to put this into a regional context. We can look at England as a whole but when you regionalise the equation, there are areas of the country that need special attention. Some local authorities have developed policies that address the issue of the supply of land as being the key to dealing with meeting housing needs. Policy-making therefore has to balance two sets of supplies: jobs and homes. This approach also needs to consider travel to work areas – the ability of people with jobs to travel to work, to areas away from their homes. This is where transport comes in – if the supply of transport lags behind the supply of housing and the availability of jobs (within a travel-to-work area) then people are going find it difficult to get housing within a reasonable distance of where they want to work. The choice of where to live, for the majority of families, dictates where their work places can be. They have to take into account their relatives (particularly dependants and those on whom they depend) and access to schools and heath care, if they have specific needs in that respect.

Formulating housing policy is a non-starter if not related to employment and education and, I would argue, transport. Joined up policies are the most likely to be credible and effective because they pull together these variables that all depend on each other. If we want our housing policy to succeed we have to make sure that the labour market has a sufficient proportion of employed people who have the kind of income that is required for stable home ownership (whether via mortgages, leases or tenancies.) The more people whose jobs fall into the short-term, precarious, end of the labour market, the more difficult it is going to be to have a robust housing policy. Allowing employers to determine the market for jobs is bad for the economy; it is free-market-ism of the worst kind. Allowing more and more employers to indulge in short-term and zero-hours contracts is also harmful for the economy as a whole. Developing key policies in isolation from each other is a practice that cannot join up jobs, homes, education and transport and for that reason it does the country no good at all. Policies that join up employment, transport and housing supply and more likely to result in a strong economy, than those that are developed piecemeal.

I will now look at some of the issues that affect the supply of housing stock, how we can make better use of land and the possible options for addressing the short-fall in housing supply.

References

Contents of the entire work

Further reading

Bricks and motar as the basis of housing. Article in Arts in Leicester magazine, April 2015.

Part 1 of this series: Policy, practice and history

Part 2: Bricks and mortar

LeicestershireTeleworking

Teleworking today and tomorrow

A talk given by
Trevor Locke, Chairman of Telenet
at John Storer House, Loughborough, on Thursday 5th February 1998.

Summary

Current patterns of teleworking in Leicestershire and in Europe

What teleworkers do

Nuts and bolts of being a teleworker

How they find work

Future prospects for teleworking in the year 2000

Four year of Telenet in Leicestershire

The impact of the Internet on teleworking

Current patterns of teleworking in Leicestershire

Teleworkers are people who work mostly at home or from home. OK in some cases they work from a small office but the key factor is that they work for clients who are some distance away – hence the ‘tele’ in telework.
Employees of companies are now [1998] more likely to spend some time working at home and on a more regular basis. Telework is becoming accepted as one of a number of flexible working practices available to large employers.
Traffic congestion is a factor in encouraging the growth of teleworking. Commuting has become a costly practice, both in time and expenses. Traffic congestion is increasing, although here in Leicester the problem is not a very great one. The City is about average for ancient Midlands cities in regard to congestion at peak hours. Parking capacity certainly is fully stretched but not necessarily overburdened. The road network is saturated at peak hours due to single car commuters but there is a computerised parking system. The commuting flow can be traced back to several large employers, most notably the City Council itself, the Inland revenue, the Hospitals, Universities and colleges.

Teleworking is for many firms an option for some white-collar workers on an ad hoc basis (a couple of days a week). LCC does have a home working policy whereby staff who are able to do so may work at home if they need to but the practice is not activity encouraged.

The City Council activity encourages staff to walk, cycle and use public transport. The development of the Town Hall Square Cycle Centre is an example of this as are the building of the cycle routes and bus routes. Much more could be done to encourage home working and this could further reduce regular traffic flows by up to 10 per cent.

Self employment

Most of the teleworkers who join the TCA (the national body for teleworkers) are self-employed and working from home. They tend to be white-collar specialists although there are also a large number of people who are home workers who might have a computer and might use it for work but they are not computing specialists – this is however a point where teleworking merges in with the general field of small business and self employment. Only a small number of teleworkers actually use a computer as their main piece of working capital – e.g. programmers, translators and web authors. Most teleworkers use a computer for word processing, accounts, some database work etc.

Teleworking is on the increase right across Europe and teleworkers are now more able to engage in collaborative projects with other teleworkers.
The Internet and competition amongst telecoms providers has meant that we have seen a decrease in telecommunications costs and an increase in the efficiency of telecoms media.

What do teleworkers do?

Some have described teleworkers as knowledge workers – collecting, repackaging and redistributing knowledge – but in many ways this sounds too vague. Let’s look at the list in Telwebsite: Electronic engineer, Software developer, Secretarial Services, Administration, Engineering consultancy, IT Consultant, Writer, Graphics designer, Journalist, Technical author, Multimedia author, Market researcher, Distance learning consultancy, Technical illustrator, Career management adviser, Psychometric tester, Tax adviser, Book keeper, Trainer.

There are a lot of people who have a computer at home, know how to do a bit on it and then are willing to take on any kind of assignment – loads of general administrators. Some are very vague on what they can do but are full of willingness and enthusiasm. Some have a yen to get into business and end up in those awful MLM schemes. Some just try to sell what ever they can over the phone.

The nuts and bolts of being a teleworker

Over the last four years I have tried to boil down the practice of being a teleworker to certain crucial elements:

(a) Working at home

For me teleworking is about being a home worker – working from home rather than at home – or both. I used to be out of the house most days in the week at one time – now I am spending four out of five days a week at home. That presents it own challenges – the fact that I am alone in the house all day. The fact that the office is in the home and if I cant find anything better to do I will work. I keep funny hours – common to work up to 2 in the morning and fall asleep in the last afternoon. Having two rooms solely devoted to office space is a source of friction.

(b) Finding work

I have multiple clients – up to 10 at any one time. I have constantly to be alert to new customers and I have to be all things at once – salesman, manager, operative, book-keeper.

I don’t make enough profit to employ secretaries, book keepers and salesmen though I ought to if I am to maximise the time I spend managing the business. One day I will get to that break point where I can. But I am beginning to work with other teleworkers – I am not so much a lone star as I used to be. That is very important – being able to find other people to work with and to share enterprise with them. I now have half a dozen associates – some in Leicester – one in the Netherlands. I find I am working with individuals and with larger companies.

(c) Doing the work

The biggest challenge is just shifting the vast pile of work that is always present. Having to keep plates spinning. Having to keep a clear sense of priorities – sadly, I have to say, this does always happen. I tend to do easy work in order to avoid the challenge of the really important and difficult stuff. When you work on your own you have to be able to engage in time management because you do not have anyone on your back tell you what to do.

How do teleworkers find work?

With great difficulty! If a teleworking is a generalist – administrator – portfolio worker – they have to do a lot of advertising. Marketing is all important. Yet a lot of work comes by word of mouth. Cross-fertilisation between clients.
You have to have good communications – customers won’t bother to find you if they can’t get an answer to their phone call. Some teleworkers end up working for agencies because it’s easier – marketing takes time and money.

Future prospects

Teleworking will continue to become easier and will be a greater possibility for more and more white-collar workers. House builders are just beginning to realise that people are working at home and are building houses with offices or studies.

Large companies are beginning to understand the benefits for teleworking. They are training managers to manage outputs. People are moving into the countryside out of the cities – this is a topic for the Government at a time when the Green Belt is under stress.

This only exacerbates commuting pressures and costs. Soon it will be cheaper to work at home because of the high cost of car ownership and travel. More student will spend more time studying at home and that will begin to affect school age children.

Four Years of Telenet

We begin with the East Midlands and have focused down on the county. That is more realistic. But the constant pressures of having to organise meetings is a burden for committee members who are very with their work.

We need to know how many of our members are on the Internet. I wonder if it feasible to run the Association for people who are not on the Internet. The sheer cost of doing mailings in time and postage is too great. E-mail and web pages cost so little – they are so easy to operate – there are none of the overheads of stuffing envelopes – doing printing – licking stamps. Perhaps the time has come to say no more paper based mailings. Do we actually need to meet together face to face.

Well many of us do enjoy seeing each other. I would suggest that we need the chance to meet face-to-face but they the bulk of association activities can be done over Internet and we would achieve more if we decided to go down that route. That might lead us to opening up our membership – to see Telenet as a general vehicle for anyone who is a regular work-related user of the Internet. But perhaps that is putting the cart before the horse.

It would be a loss if there was no longer a body to represent the interests of teleworkers, to promote teleworking, to give talks on the subject, to give advice to people who want to do this.

The impact of the Internet on teleworking

There is no doubt in my mind that the Internet has revolutionised teleworking. It has become a standard tool of the trade. It has opened up endless possibilities. It would be impossible to go back to being without it. Just as we would not want to return to manual typewriters or to having to send all communications by postal services. Once we enjoy a technological development there is no going back. But where are we going forward? What technological advances lie ahead of us?

Document created 6/2/98 © Trevor Locke 1998

PlaceToLive

A place to live: a place to work

Teleworking from home: the implications for planning and house design

[This article was published in 1995]

Introduction

An increasing number of people are working from home, either on a full or part time basis, either as employees or as self-employed people. A survey carried out in 1992 for the Employment Department found that 1 in 10 employers use some form of home-based worker, 1 in 20 employs at least one person who could be described as a teleworker and a further 8.5% of employers have actively considered introducing teleworking [Huws, 1993]. By 2001, there will be over 10 million teleworkers, according to the Henley Centre for Forecasting [BT, 1993]. It has been estimated that the total number of homeworkers in the UK is now between 1.3 and 2 million, of whom just over half a million are full-time teleworkers [Smythe, 1994]. This is probably an under-estimation because a lot more people work at home than appear in the statistics.

The 1991 Census suggests that about 5% of the working population work mainly at home [Felstead and Jewson, 1995]. This represents a considerable increase over the 1981 Census results. The highest proportion of homeworkers are employers, managers and those in professional occupations. A report commissioned by Reed Personnel Services found that nearly 14% of large employers now use teleworkers [Reed, 1995]. These increases are probably due to the greater availability of computers, faxes and telecommunications and to the trend towards flexible working practices, such as temporary and fixed term contracts, part-time working and out-sourcing of technical skills.

What does this mean for the house building industry?

It is clear that an increasing number of people are living and working in the same place. This trend poses a number of implications for architects, those who supply homes and town planners. Since the full employment of the 1960s, when a relatively small number of people lived and worked in the same building, the home has been regarded as a place of escape from the demands and pressures of work. The 1980s and 90s have seen a considerable increase in home ownership, a trend away from the rented sector to house buying or some form of social housing. There has been a steady increase in the number of households having a telephone and, more recently, in those having a personal computer at home.

People who spend all or most of their working lives either at home or being based at home are confronted with a range of problems that stem from the fact that society has not adapted to this trend. Companies that insure household contents frequently refuse to cover computers used for business purposes. Local authorities can be confused about how they assess the need for planning permission in cases where small businesses are being from homes in mainly residential areas where offices or workshops would not normally be allowed. The Inland Revenue, it is said, will impose taxes on people who take their computers home from their offices to do work (on the assumption that they could also be used for domestic or leisure purposes).

What kind of homes are needed?

Where house building companies are designing new homes, particularly for those in the executive sector of the new build market, the requirements of working at home are not widely taken into account. Some higher priced houses now include a room that is intended to be used as a study. A few houses have been given garages that could be converted into offices or workshops. Quite a few garages have been converted even though not designed with such a move in mind. A number of design features could be worked on with a view to meeting the requirements of home workers, as for example, the placement of telephone sockets in the bedrooms. Home workers often use bedrooms as offices or work areas. Ground floor rooms that could be used for home working are as yet not widespread and tend to be confined to higher value homes.

Not all home workers are professionals sitting behind computers; some are craft workers, catering for the increasing demand for the products of country crafts, fine art, and decorative object d’art. Some home workers are piece workers, fabricating small items on a very labour intensive basis. These considerations relate both to new build and to conversion designs. Housing Associations converting or refurbishing properties might also take note of the trend towards home working by providing fittings that will meet some of the needs of home workers. Some houses could be designed with purpose built workshops in outbuildings. Some housing estates could be provided with buildings that could serve as neighbourhood offices or light industrial use, such as car repair centres or for craft working. Can certain rooms be designed so that they could be used either for bedrooms or offices, as dining rooms or as studies? Can certain exterior walls be designed so that out buildings or temporary structures can be added to them, for use as workshops?

What are the planning implications for working at home?

Apart from a few exceptions, local authorities have not begun to address the planning issues involved in the trend towards home working. Few have yet identified that the trend exists or, if they have, have responded to it. An exception is Oldham Metropolitan Borough Council, which has adopted a Supplementary Planning Guidance Note on Business Uses in Residential Areas. Having recognised that working patterns are changing and that there are increasing numbers of people employed either full or part time at home, the Note sets out to establish criteria for deciding whether a business use from home requires planning permission. It tackles the question of whether or not planning permission is required for working at home. Use of any part of a house or flat would normally constitute a ‘material change of use’ that required planning permission. However, where someone is working from home in a small scale way, the grant of planning permission is not normally required. The criteria involved include:

  • the main use of the property must remain residential;

  • there must be no alteration to the exterior of the property;

  • no sign or advertisement must be displayed on the dwelling;

  • no person outside the household itself must be employed;

  • there must be no use of garage/sheds and ancillary residential storage in connection with the business;

  • there must be no nuisance to adjoining residents caused by noise, vibration, fumes/smell or unsociable hours if this has a noticeable effect on the privacy of neighbours.

The guidance note advises those thinking of working at home to discuss their proposals with their neighbours. In some cases the Council may impose a temporary permission in order monitor the effects of the business on neighbours. There are other planning issues that are more to do with structure plans than individual houses. Some of these issues are to do with the volume of commuter traffic from outlying areas into city centres. Traffic congestion is now endemic in our cities and towns. The more that local authorities can encourage people to work at home for two or more days in each week, the more commuting traffic can be abated. Clearly, only certain types of work are amenable to home working. Local authorities could play an active role in promoting ad hoc home working with employees and employers. There are good environmental reasons why they should do so.

The rise of the neighbourhood work place.

Not everyone wants to work at home. An alternative is the provision of neighbourhood offices: places that are equipped to offer people desks on demand, computers, telephones, faxes and photocopiers. Telecottages are an example of small business centres that have equipment, particularly computers, that can be hired by the hour. The advantages of these local work spaces is that they enable people to either to walk to them or to travel along different routes, rather than travel into the centre of town and out again. By encouraging flexible hours of use, traffic movements can be evened out. Secondly, such centres provide a broader range of equipment than most people would have at home, particularly if they work away from their offices on an ad hoc basis. Apart from centres catering for office workers, there are nursery units for people who are engaged in more physical work, such as crafts or small scale manufacturing, light engineering and so on. These can be located away from the areas that attract the greatest traffic flows.

For young people there are an increasing number of foyers, buildings that provide accommodation for youngsters to live in and space for work and training. Some tower blocks have been converted to use for single people and some provide common rooms for study or work. High rise flats, unsuitable for families, could well be adapted for mixed residential and occupational uses. Some of the office accommodation that has been over supplied could be adapted to this kind of mixed tenure of living and working. Again, it is likely that planning policy would need to be amended to facilitate this. Central Government might actually encourage the adaptation of surplus office buildings through modifications to Business Rates and Council Tax charges.

CONCLUSIONS

There really is no reason why the home and the work place need be so inexorably separated. The distancing of home and work is a recent phenomenon historically; our ancestors had little choice but to live and work in the same buildings until the industrial revolution brought whole sale changes to the size of factories and mills.

The availability of information and telecommunications technology now allows the home and the workplace to co-exist. This demands that we adapt our attitudes, our culture and our behaviour accordingly. A great deal of down-sizing is going on in firms and public bodies. There is less zeal for the construction of huge office buildings, for people being brought into city centres in their ten of thousands, for a 9 to 5 existence that is dependent on commuting long distances. More and more people are aspiring to self employment, leaning to live on and by their own resources. Competition is favouring the businesses that have lower overheads, than can achieve a high level of productivity without over burdensome overheads. Companies in the service sector are realising that they can reduce their costs by reducing the amount of office accommodation that they have to maintain. Some are dispensing with expensive fleets of company cars.

These trends are conferring an environmental advantage, a green dividend that many companies and local authorities would wish to secure. Our travel systems are straining to cope with the increasing demands made on them. Those who, for one or two days a week, do not have to get into their cars or wait for buses and trains, can increase their performance and out put. They can avoid some of the ills and illnesses resulting from commuting stress and sick building syndrome. Where more people are at home during the day, there is less burglary. Much can be done by housing developers and local authorities to encourage and enable home working. There are many reasons why they would want to do this.

This paper was written by Trevor Locke © Copyright reserved 1995

REFERENCES

BT (1993) The indispensable guide to working from home published by BT 1993. BT (1995) Welcome to Network Services: your user guide.

Farrant, Sue (1995) A Beginner’s Guide to Teleworking, Thames Valley Enterprise Ltd, Newbury College, Oxford Road, Newbury, Berkshire.

Felstead, Alan and Jewson, Nick (1995) Working at home: estimates from the 1991 Census, Employment Gazette, March 1995, pp 95 – 98

Huws, Ursula, (1993) Teleworking in Britain A report to the Employment Department is available from the Research Management Branch, Employment Department.

Huws, Ursula (1995) A Manager’s guide to teleworking.

Murray, Bill (1995) Vital statistics: results of the telecottage survey, The Teleworker, Vol.2. No.2. Feb/Mch 1995 pp 14 – 16

Reed (1995) Shape of work to come: a major research survey and report on changing patterns of work in UK organisations, by Reed Personnel Services and the Home Office Partnership.

Smythe, Kate (1994) Teleworking, in Local Work, Sept/Oct 1994, No.55, pp 1 – 11

(published on this blog 23rd October 2015.)

Buy to Let

19th September 2015

Housing policy

The impact of buy-to-let on housing policy

In this article I look at the budget measure to change the tax benefits on landlords who buy to let.  This forms part of my series of articles and book on housing policy. It looks at the measure in the Chancellor’s summer budget that proposes to change the way that buy-to-let landlords are taxed.

This article is work in progress; more will come later.

What the measure is about

The Chancellor plans to restrict tax relief on landlords of buy-to-let (BTL) properties [HMRC, 2015]
In the 2015 summer budget, The Chancellor proposed to phase out for current 40% tax relief for buy-to-let landlords resident in the UK. These will be individuals rather then companies.
The restrictions will be phased in from April 2014.
This measure will restrict relief for finance costs on residential properties to the basic rate of Income Tax.  Finance costs includes mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan. [HMRC, 2015]
Landlords who have higher incomes will no longer receive generous tax reliefs.
At the moment, buy-to-let landlords represent 15% of residential property mortgages. The BTL sector has been booming in recent times.
Buy-to-let landlord enjoy an advantage in the market because they can claim relief on the interest they pay for mortgages against their income. People who are buying their own home, to live in, cannot do this. The more income a landlord has the higher the amount of this relief.
Tax relief on finance costs for buy-to-let landlords is to restricted to the basic rate of tax.
The current allowance is set at 40%.
Rental property is taxed more heavily than owner occupied property.

What the measure tries to achieve

The aim of measure was to make taxation fairer for individual residential home owners. George Osborne said that his aim was to create a more level playing field between those buying a home to let and those who are buying a home to live in.
The restrictions are aimed at individuals, presumably meaning sole traders. Some suggest  that this will lead to more people using companies to engage in buy-to-let. The decrease in Corporation tax might further enhance this trend.
The 2015 budget stated that the government will take forward proposals to improve the market for residential property management services in to make tangible improvements in the market to benefit both leaseholders and landlords [Treasury, 2015
The restrictions will not apply to non-resident  investors.

The impact of the measure

The Chancellor’s proposals will not increase the supply of housing.

The budget red book stated that this means that “the current tax system supports landlords over and above ordinary homeowners” and that it “puts investing in a rental property at an advantage”.  According to one analyst, this line of argument is plain wrong. Rental property is taxed more heavily than owner occupied property. [Institute of Fiscal Studies, July 2015]

According to Bill Dodwell of Deloitte this could lead to losses for investors. Rises in bank rate would exacerbate losses.

Some commentators predict that this arrangements will cause rents to rise and would therefore be inflationary. Analysts see this proposal was leading to a shortage of properties to let or an increase in the rate of rents.

The scheme is likely to affect only one in five individual landlords, those in the higher income sector. hence, it is predicted that wealthier landlords will be hardest hit by these proposals and the wealthier they are the harder they will be hit by them. Professional landlords in the higher tax bracket will suffer losses as a result. According to the National Association of Landlords, the measure will affect 204,000 landlords. They state that ‘Right now it is especially crucial as we try to convince the Treasury to amend its Finance Bill to prevent massive financial harm for landlords throughout the UK.’ [NLA, 2015]

The impact of this measure might be that some BTL landlords will sell off their properties in order to avoid the losses that would be incurred as a result of increased taxation.  However, they might find themselves hit by capital gains tax.

Commentators warn that the measure will make BTL investment less attractive, especially for those using it as an alternative way of providing or supplementing pension income. Rapidly rising house prices have attracted investors into the property market and low interest rates have made property a more attractive option for people who have funds to invest. Trends in the availability of mortgages, especially for first-time buyers, affect the number of people seeking rented accommodation. BTL landlords have top be sure that they are getting an income from their lets and this depends on their mortgage costs being relatively low. BTL landlords have to ensure that they avoid periods when a property is empty and they have to be careful about maintenance and repair costs.

Some might transfer their property holdings to companies.  Some see the measure as leading to a hike in rents. Restrictions to BTL will result in less homes being available and this will push rents.

In fact if bank rate rises happen and savings and investment in funds becomes more attractive, investors might begin to move out of the property market. Many invested in BTL because this promises a higher rate of return than putting money into schemes where interest rates were low. Commentators remain divided on the extent to which this measure will affect property as an investment.

Nearly three quarters of renters considered their rents to be good value for money, says the National Landlords Association. Increasing shortages of mortgages for young people and pensioners has led to a large increase in rented accommodation. The proportion of people in the private rented sector is now larger than for those in council housing or in housing association lets. Those renting their homes increasingly claim housing benefits. Renting in the private sector provides little security of tenure. Last of security is particularly hard for older renters whose income is fixed. If this measure does lead to an increase in rents that will lead to increased poverty and hike the amount local authorities will to pay in housing benefits.

George Osborne’s measure must have seem like a good idea at the time; in the long-term it might have a raft of unintended consequences.

References

Department for Communities and Local Government, May 2015, Policy paper: 2010 to 2015 government policy: rented housing sector. UK Government

Hanley, Lynsey, 2012, Private tenants like me need long-term security, The Guardian.

HMRC, 2015, Policy paper: Restricting finance cost relief for individual landlords.

Institute of Fiscal Studies, July 2015, Summer Post Briefing.
NLA, 2015, National Landlords Association.
Treasury, HM, 2015, Budget 2015, HC1093, March 2015.

See also:

House Bricks: the future of housing in Britain

Housing – new approaches to policy

 

MyServices

16th August 2015

Consultancy and services

I used to provide a range of services, including consultancy.  This is not now my primary focus. I do however run training workshops, from time to time; these are usually concerned with the music business.

My focus now is on writing and I am completing two novels that I plan to offer for publication.

I also write on a variety of subjects (that interest me) as this blog will testify.

I have provided copy-writing services relating to publicity and marketing.

I also run a small Internet business that provides website hosting and web site design. This is called B2B Web Consultants has has been in existence since the year 2000 [it closed in 2016]

Urban transport

24th June 2015

The future of passenger transport in Leicester

It took a bunch of designers to help me find out that a tram system for Leicester will be a non-starter. The designers came up with a schematic for how a possible tramway system might look in Leicester and posted it on social media sites. There were a lot comments about the idea, both for and against. ‘The Future of The Tram in Leicester’ evoked a debate; but it was one that I had seen before. The local paper had run a story on the subject when proposals were put forward in November 2008. The news report suggested that even a basic tram system would cost in the order of £300 million (at 2008 prices.)

Public transport is an important driven for the local economy. Leicester sits within a catchment area of about two million people. Those people can go to Nottingham, Derby, Loughborough, Lincoln or they can go to Leicester. Destination choice is important for jobs, commerce, entertainment, the arts and all the other key aspects of life and economic activity. It is easy to think that the private car is the answer to everything; but, with an ageing population its importance is declining. An increasing proportion of the population will become dependent on public transport. Public transport is, I would argue, a key driver in the economy of cities but it often placed too low down on the priorities of people who plan urban areas.

The trams idea did however get me thinking about what the city might develop to replace its present public transport system – the bus. If buses need replacing. Leicester is a relatively small and compact urban area. What it needs is a way of moving large quantities of people around from the outer suburbs to the inner city. The personalised transport unit – the car – as we know it, cannot last for ever; unless they are all converted to run on electricity. Fossil fuels will not last forever.

The main objection to the tram is that it mixes cars and pedestrians. The next objection is that it just could not work given the physical layout of the buildings and the streets as they are today in Leicester. Trams might work in Nottingham, Manchester or Sheffield, though some local people have disagreed that they are all that wonderful.

What kind of transport system would work given the layout of Leicester’s inner city? A variety of options have already been tried in various cities in this country.

Could we go underground? London, Tyne and Wear, Liverpool and Glasgow has underground with their passenger transport systems. Would this work in Leicester? To answer this we have to look at the geology of what the city stands on. Even with a favourable geological sub-strata, the cost of building an underground system would be prohibitive, in today’s climate of public funding.

Could we go up? That might be a more viable solution. Put your light passenger transportation system on stilts. That presents an option which avoids mixing conventional traffic and pedestrians with a transit system.

The way to go is the Automated People Mover (APM) similar to the elevated monorail systems that run on a single track (as opposed to the twin rails of conventional trains.) Some monorail system are suspended beneath the track and others ride on top of it (straddle-beam and suspended monorails.) To make such systems work, there are a lot of requirements.

Two requirements must be met: the infrastructure costs and the running costs. To build a raised system you have to be able to place the stilts (or piers) in a way that will not interfere with the existing road system. Neither must the resulting structures interfere with light; they must not put existing buildings into their shadow. This suggests some kind of piers that place the trackways in the middle of existing roads using supports that are placed either side of the system on the pedestrian walkways – the pavements. This suggests a shape like an arc, although in wider thoroughfares single piers could be used.

The tracks, if we can call them that, must not be heavy. That means we have to rethink the kind of vehicles that will run on them. The units that run on the raised system must be light enough. That means doing away with two things: wheels and engines. These weigh too much. The wheel is an archaic device for allowing vehicles to be moved along without too much friction. Engines are heavy items; if we can remove them from the wagons, that makes the passenger units much lighter.

A motive method should be electric. There is no point in designing a transit system based on fossil fuels. So out goes anything to do with diesel (a) because that requires heavy engines and (b) because it is a fossil fuel. The future of transport is not about wheels or fossil fuels.

Linear induction does away with wheels and runs on electricity. A maglev (magnetic levitation) system propels wagons (carriages) without the need to have engines to pull them – the movement is caused by magnets on the trackway itself and the carriages float above the tracks – hence no need for wheels. The single beam track carries the electricity supply without the need for cables and is light enough to be supported on single piers. Such systems are also very quiet – no noisy engines, no rumbling wheels and no noisy suspensions. They glide quietly along. People can be moved either in carriages about the size of a conventional single-decker bus or in small units about the size of a conventional large taxi or minibus. The trackways are light enough to require only single pillar support piers.

The carriages must be light. They must be made of materials that are tough, hard-wearing and light. Systems like these require very little maintenance. Units of up to 100 seats should be sturdy enough and light enough to float above the tracks (about one centimetre) above the trackways even when fully loaded with passengers and luggage.

Another advantage of the maglev system is that only the section on which a ‘train’ is running needs to be powered. There is no need to run the carriages at high speeds. Most journeys are going to be over short distances. Between the outer suburbs and the inner city stops, the longest distances are of the order of three to four miles at most. Conventional diesel-powered buses stop every few yards. Most of the energy consumed by transport is speeding up and slowing down. The one thing buses do well is their ability to stop every few yards. This is another reason why the construction of the carriages must be made from very lightweight materials to reduce the energy needed for acceleration.

Having this kind of system is possible because we now have the computing power to run the motors. maglev requires microchip technology that runs at very high processor speeds. That is a feature of how linear induction works. There is constant real-time interplay between sensors and the control mechanisms.

There will have to be two tracks: one for each direction of travel, so that carriages can turn round and go back. It assumes that there will be twin tracks, one for each direction of travel – in bound and out bound – unless it is possible to run the whole thing on loops. This would require routes where single tracks only are needed but where there is in-bound and out-bound directions of travel. Unless each track has only one set of carriages which turn round at the terminus and then travel back.

Would such a system need signalling to avoid carriages running into each other on the same section of track? In a twin track system, carriages pass each other on separate tracks. It should be impossible for two carriages to run in opposite directions on the same track simply because the linear induction would make this impossible – the induction allows only forward motion. Hence the need for a second track to allow carriages travel back in the same direction and to pass carriages coming the other way. In high-speed systems, the tracks have to be far enough apart to prevent air pressure problems when two trains pass each other. Or, the carriages have to be designed to funnel pressurised air away from the gap between passing carriages. But, in an short-journey urban system – a relatively slow-moving system – this would not be a problem.

When we think about the dense inner city environment, we have more problems in designing the supports than we would have on the long, wide thoroughfares of arterial routes. The tracks could be supported, at least in narrow streets, from the buildings on either side. Attach the supports to the walls of buildings – this kind of low-weight engineering should make that possible.

The tracks would need to stand at least as high above street level as a double-decker bus or as high as the tallest van or lorry. Even if the tracks can be placed in the middle of the thoroughfare, would there be enough clearance either wide of the trackway to allow large, high-sided vehicles to run on conventional roads?

To visualise the system, I imagined what the system would look like on some of the existing arterial routes, like London Road, Welford Road, Saffron Lane, Melton Road, Narborough Road, etc. Many of these existing arterial routes are quite wide.

Even in Narborough Road, there is probably enough width to place the trackways in the middle and allow enough clearance either side for conventional vehicles. Some bridges might have to be removed. Pretty much all the Victorian railway tracks have been removed throughout the city; so, there are no disused railway that could be used. One criterion for this kind of system is that it should not require the demolition of buildings. It should be fitted into the existing layout of buildings.

It would be necessary to build the supports from metal (or other strong materials) rather than from concrete. The supporting piers should be constructed from new materials that can take the weight, not rust or deteriorate over time and which can be thin enough not to get in the way of pedestrians. At some points the tracks would have to span wide sections – where the route crosses road junctions for example. I think all this will be possible with good engineering design. Concrete is relatively expensive and has a shorter life-span than new materials based on carbon fibre or plastic materials. Many of the flyovers that were supported on concrete piers have had to be demolished because the materials degraded with age.

Carriages with wheels running on rails are heavy and require concrete trackways and piers to support their weight. Linear induction tracks are much lighter and hence do not need rails (there are no wheels) and would look more like the trackways of rides at funfairs and amusement parks. Wheel-less carriages floating silently on single tracks raised above the level of existing traffic and powered by electricity – this is what I see as being the future of urban passenger transport. Makes the conventional twin-rail tram look archaic.

Trevor Locke

Trevor Locke has a masters degree in Urban Policy Studies

Where should we go from here?

13th April 2013

What we planned

This post is part of an exercise to engage with our readers, friends, fans, customers … in order to find out what they value in the work that we do.  As an organisation (ArtsIn Productions) we do a lot of different things – run an arts magazine, put on training courses, represent bands, singers and rappers, provide a publicity service … the scope of our work is wide. The resources we have available however is not.

This consultation is to ask the public to share their thoughts and comments with us about what we do best.  If we should be focusing in,  then what should we concentrate on?

My concern is that we are spreading our resources too thinly across the field of our activities.  If we narrowed down we might achieve more impact.  The problem that I have, as the head honcho around here, is what?   I can see all the things that need doing.   I am well aware of all the things that I like doing. But, it’s not all about me.

What is difficult for me is letting go of some of my pet projects, my passions, my skill-areas; but that is what needs to happen.  ArtsIn Productions involves a number of people – all of them volunteers.    I am the only one that does things on a daily basis. Clearly, far too much lands on my desk and I cannot cope with all of it.

I can delegate some things,  to some people,  some of the time. The more volunteers we get, the more time it takes to train, brief and organise them all. As we say on our web site “Volunteers lie at the heart of all we do.”  Ours is a social enterprise and a constant stream of people apply to join us. That increases our capacity but only to the extent that we can train, en-skill, supervise and motivate them.

I am particularly concerned to get feedback and comment from those in the music community;  music represents the biggest part of our work. After about ten years of working with music, we feel we have made a contribution and we want to continue to do that.

Of all the things that we do for music,   what things are most valuable?   If we had to focus on one or two things that would be of real benefit to bands, singers and rappers, what should they be?

What happened

ArtsIn Productions Limited was closed down.  Having failed to achieve its goals, the company was costing me money to keep going, so I decided to close it.

Having announced that I was going to ‘retire’ in 2014, I have postponed that because I am too busy and have too much work to do.

I am keeping both web sites running Arts in Leicester and Music in Leicester.  I have taken both sites over from the company and am now the sole publisher of them both.

Narrowing down would be nice but, as with many of these things, there are inter-linkages and cross-benefits that make it impossible to remove one card from the house without the whole thing being in danger of falling down.

Comments about both of the websites are as always very welcome.

Please post your comments.

 

Branding for the smaller business

When we think about branding we tend to think this is something for really big corporations. I want to argue that branding is also important for new,  startup and smaller companies, including social enterprises.

Branding is about identity.  Using a name, logo and strap line anchors the identity of a company. It makes it more easily recognisable. Having an established brand is an asset.  The brand can be attached to a product and also to the business. A well-chosen brand encapsulates what the business is about. It is a statement about the company, the business, what it does, what it provides, how it operates. Its purpose is to make the business stand out.

Branding is about positioning the enterprise in the public’s awareness. A new company has to work hard to win its customer base and its brand identity will contribute to this. Growing businesses need to secure their share of the market and beat the competition. Again, brand image will assist with this. Once a business has built up a set of customers, it can use it branding to secure their loyalty.

There are various elements to a brand scheme:  colour, logo, imagery, wording.  A basic principle of branding is that it must be consistent. Once a brand identity is set it has to be applied in precisely the same way on everything: on paper, on labelling, on the Internet … where ever the business needs to be seen, the branding must be identical  across all media.

People who design branding think about the feeling it expresses. Colour is of  key importance to this. A lot of research has been done into the association between specific shades of a colour and emotions. Some colours are associated with trust, others with energy, some with passion. Choosing the right colour scheme for a brand requires work on the emotional response that is required.

Designing a branding scheme involves getting a very clear take on what the company wishes to say about itself.  When entrepreneurs register a company, they might not be thinking ahead to their branding identity and often end up with a company name that does not fit with the criteria of a clear brand identity. This need not matter because what is being sold is the concept, product or service that the company will trade in, irrespective of the name of the entity that is doing that.

A key part of branding is the logo – an image that symbolises the business or its products.  The style of the logo will convey something about the strength and quality of business. Getting it right is a formidable undertaking and a lot of entrepreneurs take too little time over getting this right.  In their rush to get started, they bash out something about their idea and hope for the best. When they later discover that it either does not work or is having the wrong effect, they then find they have to spend a lot of time and money trying to re-brand.

Changing a brand identity scheme can be very, very expensive.  So, getting it right to start with is well worth the investment. There are too many businesses out there that got their branding wrong and are stuck with it. It’s actually not an asset, it’s holding them back. It’s saying the wrong thing about the product or service; it’s conveying the wrong impression.

If your business provides a large range of products or services, then it is the brand that holds them together and the quality of any one product transfers to all the others through the association of the band name.  Service based businesses rely on their brand identity to underpin the trust and reliability that they want their customers to believe in and to value.

A well branded business has a higher value than one without a strong brand identity.  The brand is valuable in itself.  If a brand is well established, valued, liked and respected, then the company that owns it will be worth more.  The branding scheme should accurately and successfully convey what the business stands for – quality, reliability, trustworthiness, style, desirability – being some of the emotions that brands want to reflect. The brand might also express something about the customer, saying something about who they are or who they like to think they might be.  It’s a badge of status.

Understanding the importance of branding is not limited to purely profit-making enterprises.  It can also apply to public service organisations.  Local authorities, sections of the Civil Service, charities, NGOs … they all use branding to some extent to make an impact on their service users.

Some people who start businesses half-understand branding and think they can do it themselves. If you have the self-confidence to start a business and enter the market place, then it likely you will think that DIY branding is for you. It’s a trap many fall into. Thinking that branding is just about common sense is about as wrong as believing that your business does not need it.

If you want to make a success of your branding then at least try to research the subject thoroughly before you make a start. Or, find someone who has expertise in this area.  Being able to formulate a successful branding scheme is all about knowledge. Doing your own branding is as sensible as trying to take your own appendix out.

I am not an expert in branding but I do claim to understand the value, need for, and process of branding. In that respect I can project manage a branding exercise. I have a feel for how much to invest in it, because it is not difficult to squander resources on very expensive marketing companies.  I would not advocate bargain-basement deals but prudent and judicious selection of the right support is vital.

Investment in branding, if successful, confers a return that is well worth having.