Useless announcements in Westminster and Whitehall that will do nothing to address the housing crisis

“Never in the history of housing policy, has so much been announced by so many, whose achievements are so few”, as Winston Churchill never said.

The first announcement was the new job title for Sajid Javid, the Cabinet member responsible for housing, who went from being the Secretary of State for Communities and Local Government to Secretary of State for Housing, Communities and Local Government.  Could it be that the purpose was to celebrate  that Mr Javid is responsible for the worst housing crisis in living memory.

On a similar note, Mr Javid’s department, the Department for Communities and Local Government, which has always been responsible for housing, is now to be called the Ministry for Housing, Communities and Local Government.  Please, please someone, tell me that this is more than mere window dressing, that the policies responsible for the 60% increase in homeless households since 2010/11 will change.

Receiving less publicity, and not noticed by anyone other than housing anoraks like me, was the change in the name of the Homes and Communities Agency, the government quango responsible for social housing development and regulation.  It is now to be called Homes England.

At its launch this week, Sajid Javid said: “This government is determined to build the homes our country needs and help more people get on the housing ladder. Homes England will be at the heart of leading this effort.”

Actually, that was the key purposes of the Homes and Communities Agency.  But at least we are being presented with the appearance that something is being done.  Perhaps he is hoping that we will not notice that nothing is changing at all.

Lastly, the social housing regulation function of the Homes and Communities Agency is forthwith to be known by the cunning title ‘the Regulator of Social Housing’.  Where do they get this talent?

At least Fiona MacGregor, the Executive Director of Regulation, has the honesty to set out the huge anticipated impact of these changes when she wrote in a letter to housing associations this week: “This change is to the regulator’s operating name only and does not alter our regulatory framework, approach or powers and we will continue to promote a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs.”

Lots of people in Westminster and Whitehall have been very busy this week, earning their salaries by making sure that, at the end of the day, nothing is changing other than a few letterheads, business cards and signs outside government departments and quangos.  God forbid that they do anything meaningful to tackle the housing crisis.

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Private house builder chief executive gets £110 million bonus thanks to government housing policy

If there was any reason (and there are many others) why the government should look again at council house building, it is the extreme bonus paid to the chief executive of private housebuilder, Persimmon.

Jeff Fairburn has received £50m worth of shares as part of a record-breaking bonus scheme.  In total he will get bonuses totalling £110 million.

He says he deserves his £110m because he has “worked very hard” to reinvigorate the housing market. (Some suggest that the rich need bonus incentives to work hard, while the poor need benefit cuts as an incentive to work hard).

According to Inside Housing magazine, “more than half the homes sold by York-based Persimmon last year went to help-to-buy recipients, meaning government money helped finance the sales. Persimmon’s share price has nearly tripled since help to buy was launched in April 2013.”

The Guardian newspaper has calculated that a donation of £4.6m (just 4% of Fairburn’s bonus) could provide a home for all of the 58 homeless families in York where Persimmon is based.

According to the National Audit Office (September 2017), there has been a 60% increase in households in temporary and permanent accommodation since 2010/11. That is 77,000 households including 120,000 children.

But they are the poor and they don’t really matter because Jeff Fairburn is doing ok and the Persimmon share has tripled thanks to the government’s housing policies.

And people ask why I am getting more cynical in my old age ……

Introducing our latest here today, gone tomorrow Housing Minister, Dominic Raab

In June we got our 15th housing minister since 1997 when the MP for Reading West, Alok Sharma, was appointed to replace Gavin Barwell who had lost his seat at the general election.

Today Alok Sharma moved to a new position as minister for something other than housing. Appointed to succeed him is Dominic Raab, the member of parliament for Esher and Walton. According to Wikipedia, “the constituency is in the north of Surrey, bordering Greater London, in the affluent London commuter belt. It is partly rural, with heathland and reservoirs, as well as towns such as Esher and Walton-on-Thames, and lower density Cobham, Claygate and Molesey and the villages of Oxshott, Thames Ditton and Hinchley Wood.”

The good news is that Mr Raab comes with a reputation for being very competent. The bad news from a housing perspective is that he is tipped to go places in government and is likely to be moved long before he will be able to bring his enormous ability to bear on the housing crisis.

It doesn’t have to be so. He could tell the Prime Minister that he will not accept any promotion or move this side of the 2022 general election so that he can make a difference. He could also lead by example by saying he will support housing development, ideally for social housing, in the “lower density Cobham, Claygate and Molesey”.

I won’t hold my breath. I am not sure whether I will bother reading the inevitable profile and interview with the new minister that will appear in Inside Housing magazine because he will be gone before I have reached the end of the third paragraph.

So what do we know about Mr Raab. According to the website ‘They Work for You’, Mr Raab:

  • voted for reducing housing benefit for social tenants deemed to have excess bedrooms (which Labour describe as the “bedroom tax”)
  • consistently voted against raising welfare benefits at least in line with prices
  • consistently voted against paying higher benefits over longer periods for those unable to work due to illness or disability
  • consistently voted for a reduction in spending on welfare benefits
  • almost always voted against increasing the tax rate applied to income over £150,000
  • almost always voted against a banker’s bonus tax
  • consistently voted against an annual tax on the value of expensive homes (popularly known as a mansion tax)
  • almost always voted for reducing capital gains tax

Why should any of that suggest that he won’t move heaven and earth to help the poorest of the poor, to ensure that council homes with social rents are built, and to ensure that “the operationally messy, socially unfair and unforgiving” universal credit (as described by former PM, John Major) does not continue to wreck the private rented sector and lead tenants into unprecedented levels of rent arears and debt?

Answers on a postcard and sent to anyone but me.

(This Post was originally entitled ‘How can those interested in social housing and the wellbeing of tenants have any confidence in the new housing ministers, Dominic Raab?’ but I preferred the title used above)

House price inflation is a disaster for the people of Brighton and Hove

There was an article in the Property News section of the Brighton Argus on  4thJanuary that looked at house price increases. Under the heading “House price winners”, Brighton was reported as having come third in the list of the U.K.’s biggest house price winners over the last year, with an 11.4% rise.

I take a different view. The overheated housing market has meant that homes in the city are increasingly unaffordable for ordinary people. Rather than saying Brighton came third from top, I would suggest that for most people Brighton came third from bottom.

I guess it is a question of perspective between those people who see housing as investment opportunities and those of us who see housing as where people live.

House price inflation is a disaster for the people of Brighton and Hove.

Why do we have such a housing crisis in Brighton and Hove?

There are many reasons for Brighton and Hove’s housing crisis, including the limited availability of land, the impact of the housing policies of successive governments that have failed to prioritise and invest in low cost rented accommodation, the impact of the growing student population, and the rise in single person households.

But one of the main factors must be the inward migration of the DFL’s – those moving down from London.

It was reported this week in the Guardian and locally by Brighton and Hove News that over 5,000 Londoners migrated to the City last year. This is the highest level anywhere in the country second only to those moving from London to Birmingham.

These are affluent people, not the small handful of homeless people that tend to end up living on the streets of Brighton and Hove.

Oxford University professor, Danny Dorling, who compiled the report on ‘internal migration’, described the damage done to communities by the scale of internal immigration. He said: “Creating a sense of community again will take a long time and requires two or three generations to be able to stay in one place. The immigrants who have the greatest effect on life in England are internal immigrants, English-born affluent people with a large deposit.”

The consequence of this is increased demand on housing and a significant inflationary impact on house prices. There is nothing that Brighton and Hove City Council can do to reverse this trend.

It requires government action to empower local authorities to control the housing market, perhaps by a massive windfall tax on homes sold to those moving into the City, the proceeds of which could be used to alleviate housing need locally. But I can’t see this or any government being willing to take such a bold move.

The Budget – my response regarding housing, homelessness and rough sleeping

Today (22nd November 2017) in his Budget, the Chancellor had a great opportunity to do the right thing to tackle the housing crisis.

Yet he has failed, and failed spectacularly.

The abolition of Stamp Duty for first time buyers for homes costing up to £300,000 will help the lucky few.

Philip Hammond has devoted many millions of Pounds in pursuit of policies that do nothing to reduce rough sleeping and nothing to increase the supply of homes that people can afford.

The Chancellor spoke about the “dream of home ownership”. His obsession with home ownership has done nothing to increase supply and will achieve little other than to further fueling house price inflation. In this he has failed this and future generations who just want somewhere decent to live, of any tenure, a place to call home.

He failed to end the economically illiterate Right to Buy of council homes which has seen the privatisation of public assets, at a huge cost to the public purse. 40% of the homes sold through Right to Buy reappear in the private rented sector charging rents four or five times higher than the previous social rents.  Chancellor Hammond is persisting with this discredited policy.

He failed to abandon the extension of the Right to Buy to housing associations, throwing good money after bad.

As a result of Mr Hammond’s failure to make adequate investment in council housing, house building cannot hope to meet the needs of the nation.

Welfare Reform is forcing people to use food banks and rent arrears are spiraling out of control. There have been warnings about Universal Credit from all quarters, including Conservative Members of Parliament and even the former Prime Minister, John Major.  Philip Hammond has announced some tiny concessions.

I welcome the removal of the seven day wait to claim Universal Credit, and also the promise of a full month’s payment within five days to households that are experiencing particular hardship and that meet certain criteria. The devil will be in the detail.

He has recognised that Universal Credit is causing problems with rent arrears, but a two week extension of housing benefit will still leave a gap in payments and rent arrears will continue to climb, albeit not at quite the same frightening rate as at present.

The six week wait for payment of Universal Credit has been reduced to five weeks. This is hardly something to cheer.

He failed to announce any increase in the level of Local Housing Allowance, the help people can receive towards housing costs. The ongoing freeze has resulted in the majority of privately rented homes becoming well beyond the means of ordinary people in areas like Brighton and Hove.

Eight out of ten private landlords are saying that they won’t house people on Universal Credit. The Chancellor said nothing to reassure private landlords.  Merely reducing the waiting time before Universal Credit payments are made, from six to four weeks will do nothing to reassure landlords. He should have said that the housing component of Universal Credit will be paid direct to landlords. The Chancellor, again, is failing this generation and failing landlords.

The Chancellor’s commitment to end rough sleeping by 2027 is something, but he failed to say how this will be achieved. The sum total of all his housing announcements will do little, if anything, to actually end rough sleeping. In fact, it could make matters worse.

But why should Philip Hammond worry? 2027 is a long way away and he will be long gone by then. But it is more than a lifetime away for those people sleeping on our streets.

Mr Hammond should have announced a massive investment in council house building, a complete relaxation of restrictions on borrowing by local authorities, and public land to be earmarked for public housing.

He should have ended failed policies, such as the Right to Buy and Universal Credit, but instead he muddles on, unmoved by the obvious hardship caused by these disastrous policies.

Winston Churchill once said: “You can always rely on the Americans to do the right thing, once they have exhausted all other possibilities”. The same can also be said of Philip Hammond’s housing and welfare benefit policies.

In summary, the Chancellor has, to use his own words, failed to “embrace the future” or to “meet the challenges ahead”. He has not made any meaningful announcements regarding “building the homes for future generations”.

I hope that when Sajid Javid makes further announcements on housing over the next few days he will have something meaningful to say about reducing rough sleeping and building the homes, the council housing, that this country so desperately needs.

 

The Budget – Time for a fundamental rethink on housing policy

Winston Churchill once said: “You can always rely on the Americans to do the right thing, once they have exhausted all other possibilities”. The same can also be said of government housing policy.

Over the years, we have seen so many policy initiatives fail miserably that one would hope that all the wrong policies have now been exhausted and that the Chancellor, Philip Hammond, will, in his Budget on Wednesday, do the right thing.

The millions of Pounds committed in pursuit of its obsession with home ownership has done nothing to increase supply and has achieved little other than fuelling house price inflation. Home ownership levels continues to slide.

Rent to Buy, too, has failed. Just one in ten Rent to Buy tenants purchase their home (based on a snapshot survey of nine housing associations where just 180/ of the 1,594 homes have been bought over past decade). Yet again, this policy has done nothing for affordability or supply.

The Right to Buy of former council homes has seen the privatisation of public assets, at a huge cost to the public purse, with 40% of the homes sold reappearing in the private rented sector charging rents four times higher than the previous social rents, rents often subsidised through housing benefit.

The extension of the Right to Buy to housing associations as the ill-named ‘Voluntary Right to Buy’, has become, according to Inside Housing magazine, a “Zombie policy”.  It was not thought through and is heading nowhere very slowly. (Here is what I wrote about it recently).

As a result of the government’s lack of capital investment and the restriction on the powers of local authorities to borrow, house building is at its lowest level in decades.

Welfare Reform is forcing people to use food banks and rent arrears are spiraling out of control. In spite of all the warnings about Universal Credit from the ‘usual suspects’ as well as Conservative Members of Parliament and even the former Prime Minister, John Major, the government plows on and on and on, unmoved by the obvious hardship caused by the disastrous policy.

Eight out of ten private landlords are saying that they won’t house people on Universal Credit.

I have said that the Minister, David Gauke, must be arrogant, deluded or ill-informed to persevere with this policy.

Because of the ongoing freeze of Local Housing Allowance (the amount you can claim in Housing Benefit to help with your housing costs), almost all privately rented homes are now unaffordable for those on benefit and the low paid.

The number of rough sleepers continues to climb, the most visible and shocking indictment of the failure of government policy. 4,218 people in Brighton have nowhere to call home.

Chancellor Philip Hammond

This is not a comprehensive list, but illustrative of the government doing all the wrong things.  I hope that all the wrong things have now been exhausted and Philip Hammond will do the right thing – a massive investment in council house building, the relaxation of restrictions on borrowing by local authorities, public land to be earmarked for public housing, and the abolition of all the failed policies, such as the Right to Buy.