Radical solutions to the housing supply crisis – or just common sense?

Duncan Bowie displays his encyclopaedic knowledge of planning and housing in his excellent new book ‘Radical Solutions to the Housing Supply Crisis’, much of which is derived from the work of the ‘Highbury Group’ of planning academics and practitioners that he convenes.


Bowie takes a long view of the housing supply crisis, looking back at the inadequate policies of governments of both persuasions over several decades. He sees ‘ideological continuities’ in policy since the 1970s but reserves his particular ire for the current Government’s policies as contained in the 2016 Housing and Planning Act. He criticises all governments for giving over-riding priority to the promotion of home ownership at the expense of a broader and deeper housing strategy. Even in its own terms the fixation with home ownership has failed over the last dozen years, as home ownership has declined, but this has brought about little apparent change in thinking. He criticises the long term switch from subsidising bricks and mortar (investment) to personal subsidies (housing benefit) and, even worse, to self-defeating subsidies designed to stimulate demand for home ownership. He criticises government approaches to the planning system for making private capital more powerful and the public sector weaker and more reactive, and argues that ‘localism’ cannot deliver social justice. He traces the growing abuse of the term ‘affordable’, which has been taken to Orwellian levels in last week’s White Paper (“War is peace. Freedom is slavery. Ignorance is strength. Unaffordable is affordable” he might have said.)

Bowie’s book is an interesting read from the start, full of policy scrutiny, but the book comes alive when he moves on to make a passionate case for a wholly new strategy. Based on a set of principles derived from the historical analysis, he makes the case for a much larger number of new homes but he puts the strongest emphasis on homes being genuinely affordable. The first action of a new government should be to switch subsidies from market or slightly sub- market provision to social rented homes at ‘target’ rents. In the long term, over a period of thirty years, funding should be switched gradually from personal subsidies to investment subsidies, providing housing that is genuinely affordable. Instead of counting anything which is in the slightest sub-market, as the White Paper does, Bowie reverts to the definition contained in the first (Livingstone) London Plan that housing costs should not exceed 30% of the net household income of the lowest quartile households. However, his central case is for a new spatial planning system with a National Spatial Plan and effective structures at regional, city region and local levels, with significantly stronger requirements for collaboration between authorities – effectively allowing a ‘right to grow’. He argues for a much clearer relationship between local plans and neighbourhood plans, avoiding the latter becoming a mechanism by which wealthy residential populations protect themselves from development that might benefit disadvantaged people. He also makes the case for councils taking an equity stake in larger new developments, looking to benefit from long term capital appreciation rather than initial levies.

As you would expect, Bowie does not duck the question of land. He supports the Lyons Commission proposal that there should be a cap on the value that can be gained by a landowner, for example when agricultural land is rezoned for housing, with the land coming into public ownership where necessary (eg if it remains unused). Published planning policies and conditions should aim to minimise land price inflation based on ‘hope’ value. Viability assessments, where needed, should be fully transparent, and he argues that taking development taxes (whatever system is used) at the point that the increased value is realised rather than when schemes are started would help developers to bring forward more schemes. Public land should be released for housing on the basis of meeting defined public objectives rather than just being put up for market sale, and councils should have far more flexible powers to undertake prudential borrowing for their own developments. Property taxes generally, he argues, need urgent reform, especially the hugely out-of-date council tax valuation system. Stamp duty hits households when they are at their most extended and there is a much stronger case for a tax on capital gain on disposal, starting at a high threshold to avoid penalising people on the margins of home ownership. Reforms to other taxes that impact on property, like inheritance tax, are also considered.

The current chronic lack of housing provision has been four decades in the making and will take many years to put right. Bowie’s central case is that wholesale radical reform is essential which will bring about an integrated approach between housing, planning, land, taxation and social security. It will be possible to argue about the nuances of every point, but it is rare to see such a clear programme of action proposed in one slim volume (and there isn’t space in a short review to mention many important points).

The book could be called ‘common sense solutions’ rather than ‘radical solutions’ because  almost everyone knows that these issues must be tackled at some point. But can they become a winning programme for a future Labour Government? Proposals like applying capital gains tax to first homes would meet a hysterical reaction even if there are clear offsets like abolishing stamp duty. Council tax reform has been avoided by every party for the last thirty years due to fear of adverse reaction (even if gainers and losers cancel each other out). The housing supply problem will not be solved by a cautious approach, but our political and media culture induces panic unless proposals are carefully worked out and presented convincingly and with enough conviction to overcome the inevitable reactionary storm. After Lyons, and with contributions like this one, Labour now has an excellent stock of possible policies to put together into a strategy. The earlier that task is undertaken the more time there will be to convince the public. A bold approach to housing could be key to turning Labour’s fortunes.

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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. 


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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Asylum seekers’ accommodation: something for US to be ashamed about

In a week when there was a lot to be ashamed about, and especially the supine performance of the Prime Minister during and following her visit to Trump, today’s report of the Home Office Select Committee on the accommodation provided to asylum seekers should make us reflect on our own moral worth as a country. As we rightly rail against the inhumanity of Trump’s refugee ban, here at home we are guilty of treating victims of torture and others who have been ripped from their homelands by war and oppression with our own version of merciless cruelty.

People seeking asylum in the UK are eligible for Home Office support if they can prove they are destitute. They may be entitled to receive £36.95 a week – which means they could afford tea for one at the Ritz, but only once a fortnight – and accommodation. Accommodation is provided through six regional COMPASS contracts (Commercial and Operational Managers Procuring Asylum Support Services). The contracts were won by Serco, G4S and Clearsprings Group. They procure their accommodation through sub-contractors and private landlords. The contractors reported to the Select Committee that they were losing money heavily on the contracts, and the Government is seeking further major cuts in the overall budget.

The Immigration and Asylum Act 1999 sets out three circumstances under which asylum seekers are entitled to accommodation:

  • while the Home Office is considering whether an individual is eligible for support (Section 98 of the Act)

  • while the Home Office is assessing the application (Section 95), and
  • when the application for asylum has been refused but the applicant has yet to leave the country (Section 4).

(quotes and chart from from Select Committee report)

The vast majority of people are housed under Section 95 and the number of people accommodated on this basis has almost doubled over the lifetime of the COMPASS contracts (see Figure 1 from Select Committee report).

No’ people provided with dispersed accommodation under S 95, by quarterasylum-claims

The combination of the policy to disperse asylum seekers around the regions, the reducing Government budget, the rising numbers, and the losses faced by the companies, make it inevitable that the poorest accommodation in the cheapest areas will be procured. Genuine dispersal is also limited by local authority interest: in G4S’s areas, only 27 out of 135  authorities have agreed to accept asylum accommodation. G4S described the unwillingness of councils as ‘entrenched’. The outcome is that serious pressures are being faced by councils in poorer areas who have agreed to participate – as ‘clustering’ is leading to high demand for local services. It is yet another example of Government passing costs down without funding to local areas. Although many more councils have been willing to take Syrian refugees (so far the numbers are small, and its a better funded system), the Select Committee calls the wider system ‘unfair’ with many councils taking no asylum seeker at all.

The Select Committee details many of the problems in the process but focusses on the frequently poor standards. A significant number remain in temporary accommodation for months before becoming ‘settled’: these are often hotels where residents have inadequate amenities and space and find it extremely difficult to access suitable food and health and education services.

The evidence we have received suggests that some of the premises used by Providers as temporary accommodation are substandard and unfit to house anyone, let alone people who are vulnerable.

‘Dispersal accommodation’ into which asylum seekers are settled is meant to meet strict inspection standards and should meet the decent homes standard and be fit for purpose. However the Select Committee received evidence that people were being placed in accommodation that was unfit for human habitation with bad maintenance, well beyond a few isolated cases. Common problems identified included infestations of mice rats and bedbugs, dirty premises, and inadequate furnishings. One case of a known asbestos risk was also reported, but many of the dwellings were thought to have an adverse health impact.

It is clear that in too many cases Providers are placing people in accommodation that is substandard, poorly maintained and, at times, unsafe. Some of this accommodation is a disgrace and it is shameful that some very vulnerable people have been placed in such conditions. Urgent action must be taken by the Home Office and Providers to deal with this issue.

Single adults, often vulnerable, frequently have to share bedrooms, often with people they do not know from different countries or religions.

The system of allocating properties strikes us as chaotic.

If asylum seekers end up in a small proportion of authority areas, it cannot properly be called a dispersal system. Birmingham, Bolton. Cardiff, Glasgow, Liverpool, and Rochdale all have over 1,000, whilst wealthier places like Windsor and Maidenhead (containing Theresa May’s seat), Surrey South West (Jeremy Hunt), Epson and Ewell (Chris Grayling), and many others, have zero.

The number of asylum seekers in each area resembles an inverse list of the wealthiest areas in the UK. So perhaps we shouldn’t be too smug in our moral superiority in relation to Trump: just as the richest nation on earth is keeping out refugees, so are the richest towns in Britain.  


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Leasehold reform back on the political agenda

By Dermot Mckibbin

Just before Christmas Conservative MP Peter Bottomley and Labour MP Jim Fitzpatrick, the two joint chairs of the all-Parliamentary Group on Leasehold and Commonhold reform, secured a rare debate in the House of Commons on leasehold reform. (see also the House of Commons Library briefing for the debate).

The Government Housing Minister, Gavin Barwell MP told Parliament that he felt concerned about the difficulties that leaseholders were facing and that he would come back to the Commons in 2017 with reform proposals.  It is rumoured that the forthcoming Housing White Paper will contain further details. The Shadow Minister Ruth Cadbury MP announced that Labour would end the practice of excessive ground rents for leasehold houses and favoured the introduction of the Commonhold tenure as well as other reforms.

It is now clear that there is a political auction between the 2 major political parties in Westminster as to who can offer the best housing policies for leaseholders. Research by the coalition Government found that there are more than 4.1 million leasehold dwellings in England.  This figure is significantly higher than the previous estimate of between 2 and 2.5 million.

The Leasehold Knowledge Partnership Group (LKP ), who service the all-party group, estimate that there were around 5.37 million leasehold properties in England and Wales at the end of 2013.  43% of all new build registrations in England and Wales in 2016 were leasehold. There are too many votes at stake here for any political party to ignore the housing needs of leaseholders.

The problems of leasehold houses featured high in the debate. Both the Guardian and the Telegraph are united in their coverage of this issue. In the debate the Government Minister quoted LKP figures that 6,000 leasehold houses were built last year. Some of these properties have no estate management services and exist only to provide an income stream for the developer. The ground rent is sold off separately by the developer; often the leaseholder does not know about the sale. Some house purchasers who have  often been advised by a solicitor appointed by the builder find out that the ground rent can double every 10 years. This has the effect of making the house unsellable. This is an issue in the North West.

The consumer magazine Which estimated in 2012 that the amount of unlawful service charges was £700 million. Jim Fitzpatrick MP believes that the current figure could be £1.4 billion. Several MP’s referred to a national survey carried by the Leasehold Advisory Service in which 53% of leaseholders surveyed regretted buying a leasehold property. This is a high rate of dissatisfaction.

Several MP’s referred to the fact that the first tier property tribunal is no longer an informal dispute resolution scheme. Leaseholders who apply to the tribunal for a determination about unreasonable service charges are likely to face a barrister employed to defend the interests of the freeholder. Under the terms of their lease many private sector leaseholders can find themselves liable to pay the legal costs of the freeholder even if they have been successful at the property tribunal.

Peter Bottomley MP referred to a private leaseholder who was liable to pay the legal costs of his freeholder after a successful application to the tribunal. He refused to pay these costs. The freeholder applied to court for forfeiture of his lease as they were entitled to do. Had this application been successful the freeholder would have been entitled to all of the equity in his property even though the debt was comparatively small. Successive governments have ignored the Law Commission’s proposals to abolish forfeiture which is a nuclear weapon in favour of freeholders.

Insurance is a major issue for private sector leaseholders. The financial conduct authority has found that freeholders are able to pocket commissions of 40%.There  has been little interest by the Serious Fraud office and others in tackling cartels operated by at least one freeholder.

Unlike England and Wales, most English speaking countries no longer use the leasehold tenure system. The Commonhold and Leasehold Reform Act 2002 sought to introduce a system of Commonhold whereby the legal ownership would be held jointly by all leaseholders. Residents could decide for themselves how to manage their properties.

Unfortunately there are very few examples of the Commonhold tenure. The Act failed to make it compulsory for newly built properties. For existing properties all leaseholders in the property had to agree to convert to commonhold. This proved impossible to achieve. Under the commonhold system there is a strong potential for many leasehold problems to disappear as all the joint owners will have a strong incentive to manage their property as efficiently and fairly as possible.

The Conservatives are too close to the building lobby and the interests of property to be in favour of any large scale reform of the leasehold housing market. Their record since 2010 on leasehold reform speaks for itself. There is a now an opportunity for Labour to win the votes of leaseholders. More thought needs to be given to raising this issue within the Labour Party as leasehold housing issues are seldom discussed within the party itself.

Dermot Mckibbin is a member of Beckenham CLP. He is a retired housing lawyer.


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The Government sets a trap

As the Homelessness Reduction Bill completes its Committee stage – lengthy for a private members’ Bill because it has complex provisions that have been frequently amended during the discussions – suspicions are rising about the Government’s motivation in supporting the legislation. The fear is that it is setting a trap for local government to divert blame from Government when homelessness continues to rise, as it surely will.

The Government has always said it would ‘fully fund’ councils to enable them to deliver the significant additional services that will be needed to genuinely achieve the Bill’s aims of preventing more homelessness, as has been accomplished in Wales through similar legislation. This week it announced a headline figure of an extra £48 million additional funding. But the Minister’s (Marcus Jones) statement   makes it clear that this sum covers the 3 years of the spending review period, and amounts to £35m in 20170-18, £12m in 2018-19 and ZERO in 2019-20. He claimed that ‘offsetting savings’ will make sure there are no costs thereafter. Decisions have not yet been taken about the distribution of these funds between councils to reflect their differing needs of different councils, but it represents an average per council of less than £150,000 over 3 years.

The Association of Housing Advice Services called the funding allocation ‘desultory’. Based on data from five representative London councils, AHAS followed the findings of the earlier legislation in Wales and applied them to London, and estimated conservatively that the total cost to London alone would be more than £160 million. Their full analysis can be found here.

AHAS also make it clear that the rate of successful outcomes achieved in Wales is very unlikely to be repeated in London, where the pressures are significantly greater and ‘solutions’ to homelessness much more difficult to achieve. The most significant extra cost will be for additional temporary accommodation. According to Inside Housing, individual London boroughs have also been making assessments of cost that are significantly higher than the Government has allowed for – £2.4m in Lewisham, £2.6m in Ealing. In most cases, the extra funding from Government will be little more than a partial offset to the service cuts already made.

The Conservative chair of the Local Government Association, Lord Gary Porter, has called for a full review of the costs after the initial two year period because the initial costings are based on assumptions that are difficult to predict. The LGA has warned that homeless placements in temporary accommodation have already risen by 40% in the last four years and homelessness services face a funding gap of £192m by the end of the decade.

As previously discussed on Red Brick, the core of the problem is that Wales’ success in homelessness prevention is unlikely to be replicated in the more high pressure areas of England, and especially London, in the context of wholly inadequate affordable housing supply policies and benefit cuts. We are grateful for small mercies: anything that improves the services provided to homeless people and which helps some of them avoid homelessness is to be welcomed. But, rather like the management of beds in the NHS, the simple reality is that the use of temporary accommodation is rising rapidly because there is nowhere for people to move to.

‘Solutions’ to homelessness are becoming harder to find. Most homeless people simply cannot afford to buy on any scheme, many find it impossible to stay in or to find employment as they go through the experience of homelessness, access to the private rented sector is becoming harder and more expensive each year, benefit caps are pushing the PRS out of reach of many more people, and the social housing stock is in free fall – this week the Chartered Institute of Housing estimated that almost 250,000 social rented homes will be sold or converted to other tenures by 2020, intensifying the problem each and every year. Any notion that the Bill’s provisions will pay for themselves after two years is totally fanciful.

Any notion that the Bill’s provisions will pay for themselves after two years is totally fanciful.

Concern about what the Government is up to was raised this week by a letter from Government to councils setting out its assumptions. As reported in Inside Housing, they are expecting a 30% reduction in homelessness acceptances by the third year of the Bill’s implementation.

I agree with the LGA and others that it is almost impossible to make predictions of what will happen due to the Bill, but I confidently forecast that there will not be a 30% reduction in acceptances, rather the opposite, unless councils’ actual response to the Bill is to become more severe at gatekeeping – as happened after the 2002 Act – and ‘advice’ becomes ‘diversion’ and ‘blocking’. Ministers have threatened to ‘intervene’ if councils do not deliver and send in staff where councils do not follow its requirements, proving yet again that empty vessels make most noise.

I also predict that in 3 years’ time, when the numbers have grown yet further, Government will be happily passing the buck onto councils. They were on board to the legislation, they will say, and we fully funded them to implement it. It is not central Government to blame, it is councils, and mainly Labour ones at that.

This does not in my view mean that we should ditch support for the Bill. Instead, it is vital to highlight the true costs of implementation and to make it clear that central Government is selling local government short by a long way. Councils must up their demand for Government to adopt policies that will lead to a dramatic increase in the supply of social housing – the only real long term solution to the homelessness crisis. Locally, it is important to campaign for proper implementation – some homelessness is preventable and of course it should be prevented wherever possible.

It is good that councils will have duties towards a wider range of people, many of whom have been neglected before. But the fact that many councils could do more should not obscure the fact that most are struggling to find genuine solutions to homelessness as the housing crisis for people on low incomes intensifies.

Inside Housing magazine has had excellent coverage of the passage of the Bill  and they have produced this excellent summary of its provisions, reproduced here for the benefit of readers.


The bill is made up of 12 measures:

  1. A change to the meaning of “homeless” and “threatened with homelessness”. Each household that has received an eviction notice is to be treated as homeless from the date on which the notice expires, and the period at which a person is threatened with homelessness is changed from 28 to 56 days.
  2. All homeless people have access to free advice and information.
  3. Local authorities are required to carry out an assessment of what led to each applicant’s homelessness, and set out steps to remedy this in an agreed written plan.
  4. Local authorities are required to help to secure accommodation for all eligible households who are threatened with homelessness, and at an earlier stage.
  5. Local authorities are required to provide those who find themselves homeless with support for a further period of 56 days to help to secure accommodation.
  6. Local authorities are able to take action to help to secure accommodation under the new duties to help homeless households.
  7. Households in priority need who refuse to co-operate with prevention and/or relief activity will be offered a minimum of a six month private rented sector tenancy. They will not progress to the main homelessness duty. Households not in priority need who refuse to co-operate would be provided with advice and information only.
  8. All young people leaving care will be deemed to have a local connection in the area of the local authority that is responsible for providing them with leaving care services under the Children Act 1989.
  9. Applications are provided with the right to request a review in relation to the prevention and relief duties.
  10. The bill introduces a duty on specified local agencies to refer those either homeless or at risk of being homeless to local authority housing teams.
  11. The secretary of state has a power to produce a statutory code of practice to raise the standards of homelessness support services across the country.
  12. A local housing authority must satisfy itself that specific requirements are in place where it secures accommodation for vulnerable households in the private rented sector
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One article does not wipe the slate clean

Having attended Owen Jones excellent lecture on ‘optimism’ over the holiday, I had resolved to view 2017 with more positivity, looking at what is possible in the future rather than what has gone wrong in the past. Sadly, the feeling didn’t last long. I read an article by Kate Davies (the chief executive of Notting Hill Housing Trust for more than a decade) in Inside Housing. On the surface there was little to complain about, mostly I agree with the content. It explains the benefits of social housing, low rents and security, and complains about the lack of grant for new homes. It sets out the serious implications of the shortage of social housing, a common enough theme on Red Brick.

But context is everything. My annoyance at the piece stemmed from knowing Kate’s role, as I see it, in undermining the cause of social housing over the past decade, in two ways. First, she has led an organisation which deliberately decided not to provide as many social rented homes as it could have done – amounting to thousands of homes over the period which could have been used to house people in housing need. Secondly, she was a leading light in the campaigns and lobbying that seriously challenged the existence of social housing as we had known it, policies that were taken up directly by the Coalition and now the Tory Government. In her article, she makes no acknowledgement of her previous views and takes no responsibility for their impact.

Of course, she was not alone. There were many others in UK housing who went down similar paths. People fell over each other to disparage the social housing ‘offer’and to stereotype its occupants. It is the combination of failing to deliver as much social housing as possible, failing to defend genuinely affordable housing from attack, and failing to contradict the media’s demonisation of tenants, that has led me to be so critical of leading figures and institutions, especially in the housing association world. Homeless and badly housed people have been the victims of their loss of commitment and weakness of vision.

I was on the Board of Notting Hill Housing Trust for six years, from 2002-2008, having served on area committees before that and having had connections with the Trust since 1972. It is an organisation that really matters in west London and has transformed thousands of lives. Along with Kate and many others I worked hard, with some success, to improve the performance of a once great organisation that had hit the doldrums. With regard to housing development I am a pragmatist: I supported Notting Hill’s role in promoting shared ownership, and have had a long-held interest in providing homes in the ‘intermediate’ sector as well as for those most in need. As a Board member I supported tentative moves into highly profitable private development because it could be used to cross-subsidise an increase in social rented homes. It was a time when grant for social housing was substantial and the Brown Government had increased the budget considerably.

But the Trust came to be dominated by a philosophy which saw social renting as something to be disparaged, a ‘dead end’ and a route into ‘dependency’, and which also placed home ownership on a pedestal called ‘aspiration’. Provision of social rented homes was downgraded in priority, there were moves into making tenancies conditional (eg on seeking work), whilst more and more effort went into shared ownership and private development. There were skirmishes at the Board over individual schemes where the proposed balance between social rent and shared ownership was weighted in favour of the latter even though the finances of the scheme seemed to allow for more social renting in the mix.

It came to a head in early 2008 when a new 5 year development programme was put before the Board. It was fully costed, certified by the Director of Finance as a credible and viable plan, and it reflected in full the policy of the then mayor, Ken Livingstone, that development should be 50% affordable (35% social rent and 15% intermediate). Having drafted Ken’s housing strategy, I was delighted that NHHT planned to follow the lead. But the proposal was withdrawn by the chief executive and a different strategy was brought to the next Board. The amount of shared ownership was significantly increased and the share of social rent significantly decreased. After a long and difficult Board meeting, where I was an isolated advocate for the first strategy, the revision was passed (as I recall) by 8 votes to 1. The mix in the programme was proposed to shift from (social rent: intermediate) 70:30 to 40:60, much more extreme than even the policy of the incoming mayor Boris Johnson (although still much better than now).

I resigned. In my (July 2008) letter to the Chair, a clever businessman who helped improve the Trust in many other ways, I commented:

I cannot support the Board’s decision to approve the strategic plan proposed by the Corporate Management Team and the underlying attitudes it reflects. The basic premise of the growth strategy is that NHHT should make ‘shed loads of money’ from private development, which can then be applied to meeting housing needs.  But this argument falls if CMT and the Board then decide to provide many fewer social rented homes than could be provided within reasonable business parameters.  Real choices were available in deciding the strategy – and the final decision reflects serious differences of principle.  In short terms, I feel that NHHT is fixated with promoting home ownership and has insufficient commitment to meeting housing need.

Any reasonable analysis of housing need in London shows that the highest priority is for more social rented homes.  Of course other objectives come into play, and I have consistently supported mixed development and intermediate housing options .………  Compared to the first version of the corporate strategy in March (which was also recommended by CMT), the revised strategy would produce 1,500 fewer homes for social rent over 5 years. 

Externally, Kate was often heavily involved in policy development and lobbying. Amongst other things, she was a key advisor to the extremely influential Localis review (Principles for Social Housing Reform) on which Red Brick has commented many times (for example here). She chaired the ‘Housing and Dependency Working Group’ for Duncan Smith’s (misnamed) Centre for Social Justice producing a report – using NHHT resources – on housing poverty in 2008, where she repeated her call for an end to security of tenure and criticised social housing for providing ‘low cost living for life funded from the public purse’.

Of course Kate is fully entitled to hold her own views and to pursue them as she wishes. In many ways she is very good at her job. But the antagonism to social renting affected both what NHHT was doing and what it was saying to Government as a prominent housing provider. For example, in 2006 I managed to get the Board to agree not to submit draft evidence to the John Hills review on the future of social housing because it supported tax relief for first time buyers (without evidence) and because it called for the ending of security of tenure for social tenants and higher rents. My view was that the proposed evidence stigmatised tenants: social housing was described as ‘subsidised’ whilst shared ownership was not; tenants were seen as second-class citizens who needed ‘a springboard back into society’; social housing was a ‘dead end’ where lives ‘stagnate’. Home ownership was seen as the miracle cure for social ills.

It has become fashionable once again for leaders in UK housing to describe in graphic terms the rise in homelessness and the appalling degree of housing need in our country. But the industry has an awful lot to feel ashamed about and failing to defend social rented housing is top of the list. People should be held to account for what they did when the money was available, what they have advocated for as individuals in public debate, and, crucially, how they used the platform and resources provided by their organisations to promote their views. One article does not wipe the slate clean.

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Trump will be bad for housing too

A foreclosed home in Las Vegas. Photo: Max Whittaker for The New York Times.

A foreclosed home in Las Vegas. Photo: Max Whittaker for The New York Times.

If social housing provision in the United States is already highly marginalised and directed towards the very poor, it’s due to get worse under the next president as budgets are hacked back. And the appointment of the new secretary for housing could be the worst news of all.

Social housing in the US caters for barely one per cent of households, and is disproportionately occupied by the very poor, with one-third earning less than $10,000 per year. Nearly half of tenants are black, even though black people make up only 19 per cent of the population overall. But the Housing and Urban Development department, HUD, has a budget of $47 billion overall, because its housing voucher programme assists millions more poor households in the private rented sector. With the focus of its spending so strongly on the poorest and on black communities, it’s easy to see it as a potential target for Trump’s budget cuts.

Traditionally HUD has been a low-key cabinet post awarded to a competent administrator (the incumbent is Julian Castro, a Clinton supporter and former city mayor). Even previous Republican presidents usually put it in safe hands. But Trump has appointed the uniquely unqualified Ben Carson to be the new secretary, a man whom even his friends describe as having ‘no government experience’ or ability to run a federal agency. However, Carson does have one characteristic that may have suggested to Trump that he was right for the post: he’s black, and originally from a poor background. Perhaps because of this he was initially thought to be the only pick for the HUD position who had actually lived in a public housing scheme (it later turned out he hadn’t).

What he does have, apart from his ‘gifted hands’ as a highly competent brain surgeon, is a strong commitment to small government that means he’s hardly likely to fight for the bigger budget that HUD badly needs. At present, almost all new rented housing is created for middle-income earners and above. Despite being a person of colour, Carson’s on record as opposing Obama’s attempts to get HUD to put more social housing in wealthier neighbourhoods and to challenge discriminatory practices that the agency has tolerated. Obama, according to Carson, is guilty not just of social engineering but of failed socialism. In the UK we would call it trying to create mixed communities. In the US the principles are enshrined in the Fair Housing Act, and it would be an extraordinary irony if it were a black housing secretary that had to be taken to court for failing to observe this particular law, because of his belief that poor people must continue to live in poor areas.

Indeed, Carson’s priorities, if he follows them when he takes up the HUD post later this month, could hardly be more misplaced. Federal housing policy has in key respects been a disaster for the poor and for minorities in particular. The failed, state-backed mortgage giant Fannie Mae was guilty of leaving many poor households destitute as a result of the crisis in and collapse of the ‘sub-prime’ mortgage market in which it had had a major role. Empty homes that have been foreclosed (repossessed) are often mismanaged (see photo), especially those located in poor areas, making it more likely that the former owners are still in debt and unable to obtain new credit. Homelessness has surged: more than half a million people are living on the streets, in their cars or in official shelters. Several cities, such as San Francisco and St Louis, seem to have decided to launch a war on the homeless rather than on homelessness. At the same time, social housing is far too small a sector to cater for the millions in need who are, of course, now much less likely to ever become home owners. New housing policies, like those which Bill de Blasio is pushing in New York, are needed across the United States.

The incoming housing secretary, however, believes that ‘poverty is really more of a choice than anything else’. Oh, and he doesn’t believe in evolution either, or that abortion should be permitted in any circumstances, and he thinks that gun control in pre-war Germany may have fostered the rise of Hitler and produced the holocaust. He was also the would-be presidential candidate with an unusual theory about the origin of the pyramids, leading one person to tweet that ‘it’s amazing how one can be a neurosurgeon and a dimwit at the same time’. Welcome to the Department of Housing and Urban Development, Ben Carson.

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The war on local government

What’s more depressing, the government’s current war on local government or the lack of a sufficiently outraged response to it? Or rather, why is the outrage being directed just where the government wants – at local authorities – rather than at Theresa May, Phillip Hammond and their refusal to do anything about the precipitous crisis created by their predecessors?

Authorities like Walsall are being pilloried for threatening to close art galleries and libraries: writer Philip Hensher tweeted ‘…if you want to live among intelligent people … move out of Walsall.’ But as Graham Chapman, Labour deputy leader at Nottingham has pointed out, the real philistine is the government, which has cut Walsall’s spending power per head by £543 since 2011. Urban councils in the north and Midlands have been worst hit by the cuts, then when the government has offered compensation they’ve missed out on that too. Cuts in council funding have also tended to coincide with the areas worst affected by welfare funding cuts, as Christina Beatty and Steve Fothergill have consistently shown. There can hardly have been a clearer enactment of the biblical prediction that ‘whoever does not have, even what he has will be taken away’.

Housing is showing several instances of the critical reduction or disappearance of services, with councils being lined up as the culprits. In the run up to Christmas, the annual concern about rough sleeping numbers is being turned on councils, with Birmingham blamed by the local press for the £10 million cut it’s making to homelessness services. While housing minister Gavin Barwell has admirably accepted that homelessness is a ‘moral stain’, he sticks to the coalition government’s propaganda that it is ‘protecting’ or ‘increasing’ funding to tackle it, when it is doing nothing of the sort. Yes, there are some protected pockets of funding, but these are insignificant when most services to tackle homelessness are financed by councils’ general funds and support for these will, according to the IFS, have been cut by 79% by 2019/20 compared with 2010/11. Birmingham, like everywhere else, is facing horrendous choices in making its budget for 2017/18, as its chief executive has explained this month. It is not surprising that, while there has been a cautious welcome for the new homelessness prevention duty likely to be imposed on councils, there is also widespread concern about expectations being raised that can only be dashed. As Steve has already pointed out in Red Brick, the biggest step to prevent homelessness would be for the government to recognise the devastating impact of its own policies, notably those resulting from welfare ‘reform’.

Red Brick has complained before that government housing policy often has more illusion than substance, but perhaps Sajid Javid isn’t one of our readers as he’s now at it again. This time it’s in relation to the crisis in social care, where in an apparent response to Jeremy Corbyn’s cornering of Theresa May on the issue, Javid has announced more funding. Except of course that he hasn’t: the ‘extra’ is to be found by cutting the New Homes Bonus, which is not just money that councils would have got anyway, but to crown it all was taken away from them in the first place! Councils will also be allowed to raise more in council tax, which has become a very regressive source of tax income and is due to become even more so as government funding for rebates is further reduced. And again, it’s councils in the poorer parts of the country that will be worst hit and where better social care is even more urgently needed. Javid is having to make the best fist he can of the Chancellor’s failure to even mention social care in last month’s Autumn Statement, because there is, in truth, simply no more money being made available. But he can count on May’s backing to blame the problem on ‘underperforming’ councils.

There is a similar story about councils’ local planning duties in relation to housing development, where the government continues to threaten action against ‘underperforming’ councils through its Neighbourhood Planning Bill. But even builders have been forced to agree that the main problems councils have in meeting their housing targets are lack of resources and insufficient planning staff, said to affect nine out of every ten local authorities.

Council housing was, of course, supposed to be protected from these cuts because (to its credit) the coalition government implemented Labour’s deal to make the service self-financing and allow councils to decide their own rents and keep the proceeds. Councils collectively took on £13 billion of extra debt to pay for this, and began to keep their side of the bargain by upping their investment programmes. But as Red Brick has reported several times, most recently in July, the previous Chancellor reneged on his promises and instead began to use council housing as a sort of milch cow for the Exchequer. Admittedly, Javid and Barwell have now stepped back from introducing ‘pay-to-stay’ rents and have delayed the horrendous policy of forcing councils to sell higher-value stock, but the cuts in council rents are still in place and have completely undermined investment plans by taking £2.6 billion out of councils’ housing revenue accounts.

The background to the war on local government is described in historical detail by Tom Crewe in the latest edition of the London Review of Books. It is a salutary reminder of all that we have had and what we are now losing. As Crewe points out, austerity is about far more than closing art galleries and libraries (lamentable though those cuts are). It is about services which are among the basic underpinnings of civilised life: as he puts it, government ‘…has wrecked the ability of elected local authorities to provide and administer many of the features and functions of the state as we understand them… . Councils today are caught in a web of obligations, helpless to fulfil them without outside help, and at the mercy of a government that might choose not to provide it.’

While devolution to places like Greater Manchester provides some respite, it can’t make up for the cumulative effect of what will be a decade of relentless cuts and it offers yet another chance for central government to pass the buck. Sajid Javid must be delighted about the cognoscenti having a go at Walsall council, because as Tom Crewe says ‘we fret and fume about this council here, that service there, while the whole system is sliding off a cliff’.

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Winning Elections and the Leaseholder Vote

By Dermot McKibbin

The 1997 Labour Election manifesto described the leasehold housing tenure as not worthy of the 20th century. The leasehold form of ownership is feudal in nature.  You pay for a lease and when the lease expires, you revert to a mere tenant unless your lease is extended. It is a wasting asset. If you break the terms of your lease, or fail to pay your ground rent,  the freeholder can apply to court for forfeiture of your lease.

Former commonwealth countries such as America and Australia have a communal form of ownership to deal with flats in blocks. Scotland has abolished ground rent.

The 2002 Commonhold and Leasehold Reform Act sought to replace the leasehold tenure with a system of Commonhold. The freeholder interest would be replaced by a Commonhold system of ownership whereby all flat dwellers owned a share of the freehold. The residents could decide how to run the building themselves instead of the freeholder.

Unfortunately the Commonhold system failed. It was only voluntary for new build schemes. For existing leaseholders they would have to obtain the agreement of all other leaseholders in their block to transfer to the Commonhold system. This proved impossible to achieve.

Since the Act became law there has been a large increase in the number of applications to the first tier property tribunal to determine the lawfulness of service charges. The number of applications to the property tribunal has gone up by 400% in 10 years. Unfortunately these  tribunals are now too legalistic. Freeholders have deep pockets to pay lawyers who run rings round the average leaseholder.

In August 2014 the Coalition  Government published an important technical study into how many leaseholders there were in England. This showed that the number of dwellings owned by leaseholders was 4.1 million. This was much higher than the previous figure of 2.5 millions leaseholder households.

Whether Labour likes it or not the number of housing association  leaseholders is likely to increase. Indeed over 40 % of all newly built properties in England are leasehold. In London the comparable figure is over 60%.

The English Housing Survey 2013-14 revealed  7.4 million households who owned outright, 6.9 million households who had a mortgage, 4.9 million private rented households and 3.9 million households who rented either from a local authority or a housing association. Labour cannot ignore the votes of owner-occupied households.

Apart from the Labour commissioned Redfern Review into the decline of home-ownership, there has been little debate within the Party about the housing problems of the dominant tenure such as mortgage repossessions, how to deal with disrepair problems or the fact that under universal credit unemployed home owners will have to wait 9 months before they receive any state help to pay their mortgage.

There has been research into the amount of unlawful service charges  or detriment that exists in the leasehold housing market.  A 2011 Which survey estimated the annual detriment to be £700 million. This was based on the number of leaseholders being 1.8 million leaseholders.

In December 2014 the Competition and Markets Authority published a much criticised study of the residential property market.  No mention was made of the strict forfeiture rules or of the Law Commission’s proposals to abolish these rules. The  supreme court decision that seriously undermined the legal rules about how a freeholder consults with leaseholders was not mentioned. There was no review into how successful the 2002 Act had been.

The report did cautiously estimate that the  annual detriment could range  between £34 million and £98 million a year. It is likely that the actual figure is considerably higher.

The study concluded that there was little need for statutory regulation. Most problems could be resolved by voluntary measures. Unsurprisingly the Tories endorsed this approach.

The Guardian has recently exposed how volume builders such as Taylor Wimpey are making money out of the building  and selling of leasehold houses. The freehold is sold to developers who have the right to increase the ground rent by 200% every 10 years. This makes the property virtually unsellable.

This practice has been condemned by John Healey MP the Shadow Housing spokesperson. Unfortunately there is no evidence that the Party as a whole is aware of the need for leasehold reform. Labour cannot afford to ignore the plight of the growing number of leaseholders.

Many freeholders such as the Duke of Westminster have close links to the Conservative Party. Labour needs to develop a clear position on leasehold reform and to expose the links between freeholders and their political allies if they wish to win the political support of leaseholders at the next election.

Dermot Mckibbin is a retired housing lawyer who until recently worked for Greenwich Housing Rights. He is interested in leasehold reform.

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One (stifled) cheer for the Autumn Statement

It is hard to imagine a housebuilding policy that could be more extreme than the position reached by David Cameron and George Osborne last year. Having virtually ended new programmes of social rented homes, in favour of the so-called ‘affordable rent’ programme, they went one step further and pulled the plug on AR in favour of total reliance on subsidised home ownership products. The Government was only going to offer help to those who already had incomes that brought them within touching distance of home ownership. The rest could go hang.

Theresa May and Philip Hammond have rowed back from this position a little way. Quite how far is still unclear. The headline extra money that Hammond announced in the Autumn Statement sounds less impressive when you realise it covers a five year programme from 2016-2021. They will spend in half a decade what some might think is a reasonable programme for a single year.

It is good news that there will be more money for grant for new homes. The penny has dropped that a policy based on subsidising and supporting demand for home ownership is bound to fail in the medium term because the subsidy will feed into price increases unless there is a corresponding increase in supply, thereby defeating the original purpose. Subsidising supply is a much better thing to do. More grant will enable a bigger share of each development to be ‘affordable’ and, depending on the policies of the funder and the delivery body, should also ensure that some of the programme is for social rent. More grant makes negotiating s106 planning gain agreements easier.

It is also good news that there will be more money available for infrastructure to support housebuilding. Inadequate infrastructure has been a big barrier to many developments. However, there is still a lot to play for in operational terms to make the money work hard. Public funding of more infrastructure should mean more development is viable, producing more homes and more affordable homes, but, if not managed well, it could just feed into developer profits by reducing their costs. There is also a risk that it becomes another way of paying for roads. Programme management and effective negotiation will be key to getting the best possible social return.

It is also good news that the Government is now willing to see the grant that is available go into a wider range of forms of tenure – although the Treasury documents only talk about ‘affordable rent’ (ie rents at up to 80% of market rents) despite the Government’s talk of having policies that work for everybody. The extra money does not yet mean there will be  a new stream of social rented homes.

Strategic funding bodies – the London Mayor and the Homes and Communities Agency in the rest of England – will be encouraged to help people who fall into Theresa May’s  definition of ‘Just About Managing’, whatever that is. But a genuinely inclusive policy would also be aimed at those who are ‘Just About Sinking’. At this point a slightly less regressive housing investment policy comes face to face with a regressive benefits policy. Despite a small amount of amelioration, the impact of the new benefit cap and the general squeeze on benefits has not yet been felt. There are dire expectations that these changes, matched with a growing lack of access to private renting for people on benefits, will lead to a surge in homelessness over the next period. Measured against such need, the extra money begins to look very modest indeed.

The news has been well received in London, which will get the lion’s share of the new cash for investment. Sadiq Khan and his housing deputy mayor, James Murray, have played blinders so far, getting the balance right between shouting from the rooftops about London’s needs, winning the argument that housing is the biggest barrier to economic growth in the capital, negotiating stealthily with Ministers who are more open-minded than their predecessors, convincing them that they can help deliver Government priorities as well as promoting their own. Khan is now in a strong position: he controls the funding pot, can set the terms of trade, and is refining the planning requirements. Housing associations and developers are already beginning to go with the grain of his policies, just as they did with Ken Livingstone, and, miserably, just as they did with Boris Johnson. I think the new administration is genuinely committed to getting a social rent programme moving again. The extra cash oils all the wheels of their policy.

Outside London the response of the HCA to the new flexibility is harder to predict, and I have yet to see a response from them. In some places new combined authorities and, next year, the Metro mayors will have a much bigger say in what happens. Elected authorities should seek movement away from the priorities set out in the current Shared Ownership and Affordable Homes programme 2016-2021 – which was described by the HCA itself as ‘a decisive shift towards support for home ownership’. As the HCA is due to announce initial allocations under the programme shortly, effective intervention from local areas is needed now.

Together with decisions like dropping ‘pay to stay’, the deferment at least of forced sales of council high value homes, and action on letting agents’ fees, Gavin Barwell has made a strong departure from the policies of Cameron and Osborne. Yet the Office for Budget Responsibility raises doubt that the balance of new policies will increase housebuilding, predicting a reduction not an increase in housing association output.

So, should we welcome the new direction in policy? Well, that’s a big word. My feeling is that it is rather like going 10 rounds with Anthony Joshua. You would welcome the fact that he has stopped hitting you so hard. You also know that the pain is going to endure, but there is genuine relief that things might be less bad than they could have been.

It’s a victory for all those who have campaigned against the extremes of Government policy, but I can only give it one (stifled) cheer.

The response of SHOUT the campaign for social housing can be found here.

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