Housing white paper: Government reinvents the wheel

Here are some initial reactions to the White Paper published today, having also listened to Sajid Javid’s statement at lunchtime. 

square-wheel

Almost every news programme and every newspaper has previewed the Housing White Paper, published today, in excitable terms, building expectations that something dramatic was about to happen. It seems they all believed the spin that the Government was to take radical and bold action to ‘fix the broken housing market’. Housing Minister Gavin Barwell in particular has been talking a good game over the weekend, and nearly sounded convincing.

But in the event the 100+ page White Paper is a huge disappointment, a damp squib, a fuss about nothing. It reinvents the idea that local authorities should undertake standardised housing needs assessments, pinches but waters down some private rented sector proposals made by Ed Miliband at the 2015 General Election and promises a huge number of consultations on future changes (mainly to detailed planning regulations) – well, they’ve only been in for 7 years, it’s too much to hope they know what they’re doing by now.

Most of the rest of it is the same old words, spoken by Housing Ministers back to the venerable Grant Shapps, but in a slightly different order: simplify planning, make more land available, release public land, strong protection for green belt, stronger voice for communities, better use of land, providing infrastructure, tackling skills shortages, more small builders, custom building, more institutional investors, making renting fairer, it goes on and on.

The Government is reinventing a square wheel. It didn’t work the first time and it won’t work now.

The White Paper is mainly about housebuilding, and a bit about private renting. It has next to nothing to say about making housing genuinely affordable. It continues the failed policy of pouring money into supporting demand for home ownership whilst allocating a pittance to new genuinely affordable supply. It has nothing to say about the horrific implications of welfare reform or the relationship between housing affordability and the benefits system.

Social rented housing make a single appearance in the White Paper, but only in the section on plans to ‘redefine’ affordable housing.

Continuing the current debasement of the language, affordable housing is to be defined as including many things that are not affordable at all.

Affordable housing will be defined as including:

  • Social rented housing (determined by guideline target rents)
  • Affordable Rented housing (let to the same eligible people as social rented but with rents at no more than 80% of local market rents)
  • Starter homes (to be restricted to those with maximum household incomes of £80K, £90K in London)
  • Discounted market sales housing (discount of at least 20% from market value)
  • Affordable private rent housing (at least 20% below market rent)
  • Intermediate housing (sale or rent at costs above social rent but below market).
The complete absence of any proposals to re-establish a major programme of building of social rented homes at genuinely affordable rents is the central failure of the White Paper. It might get boring to repeat this so often but as George Orwell said:

We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men.

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3 Responses to Housing white paper: Government reinvents the wheel

  1. Ben Jamin' says:

    The believe that affordability issues are due to a lack of supply is based on misguided economics.

    It is the ratio between discretionary incomes and selling prices/rents that make housing affordable or not. Building lots more homes will of course improve this. Only marginally though, and at a very high cost. In order to bring the selling price of housing down (on average) to it’s capital only constituent, we’d have to add another 6 million homes on top of the 1 million empty dwellings we’ve already got. Not to mention the 25 million empty bedrooms.

    It is the capitalised value of location, and its uneven distribution that acts as a transfer payment, that makes housing unaffordable for one group, while shifting wealth and income to another.

    A land tax stops this transfer payment at source. In doing to it reduces both selling prices and rental income by two thirds on average. The re-distributional effects of this is to put around £12K a year more into the pockets of a typical UK household, improving affordability by a factor of four, as measured by discretionary incomes to selling prices/rent.

    Furthermore, by levelling the playing field between owner occupiers and renters, it would allow the market to match supply with demand, rationalising our existing housing and reducing excessive vacancy and under occupation.

    In other words, not only would an LVT be far more effective in improving affordability the majority of UK households, it would do so by reducing costs rather than adding to them.

  2. Alan Chapman says:

    One thing the White Paper gets right is ‘ The housing market is broken ‘. In order to fix it we need to engage in a cross party debate to provide radical solutions, something that post war governments have failed to do.Here are some ideas to start the debate:
    1) New housing to be built to Passivhaus standards, which requires independent testing to remove the gap between designed performance and actual performance.
    2) Land given planning approval for housing to remain in community ownership.
    3) Community housing to be designed by Architectural professionals and tendered for by local construction companies (i.e. Not volume house builders)
    4) Adequate funding to train sufficient workers to satisfy the needs of the industry which will also require to retrofit 24 million existing homes.
    5) New ways to fund the above.
    6) Cross party agreement on a long term housing policy.
    7) Acceptance that we can’t continue to replicate 19th and 20th century housing but need to utilise 21st century materials and building solutions in order to provide affordable housing.

  3. Paul says:

    So tell where is 80% of local market rent actually affordable to people even on the median wage never mind the 50% of people who earn less that that!!

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