HOUSING ISSUES

29 August 2015

I shall set out here over several posts the issues that I think are important in housing in England and then explore my views on these.

1
Selling and reselling council and housing association homes

Right to buy was introduced by the Tories in 1980: council properties were sold to sitting tenants at a discount. The aim was to enable tenants to become home owners and to replace the sold properties with new affordable ones but replacement on a one-to-one basis has not happened. The discounts were raised in 2012 by the Tory Lib Dem government and the present Tory government proposes to extend the right-to-buy to around 1.3 million people in housing association properties.

What has happened is that about 40 percent of former council homes bought by tenants under right-to-buy are not now lived in by the original buyers; the strong indication is that most have been sold on.

Here are the accounts of the investigations in to the reselling of the homes from the Mirror and the GMB in 2013; and Inside Housing magazine this month, along with a supporting article by the Independent. Other newspapers covered the Inside Housing story.

Read this article in the in the Mirror 5 March 2013 by Nick Sommerlad: “Great Tory housing shame: Third of ex-council homes now owned by rich landlords. The son of a former Tory Housing Minister and Mrs Thatcher aide during the peak years of right-to-buy owns at least 40 ex-council property.”

The GMB investigated Wandsworth in south London “Landlords Own 40% Ex Council Houses” (5 March 2013).

Inside Housing magazine 14 August 2015 “Revealed: 40% of ex-council flats now rented privately” and “Right to Buy to Let”

And here’s the Independent 14 August 2015 reporting the Inside Housing investigation “Right to Buy: 40% of homes sold under Government scheme are being let out privately”

Two tables produced by the government offer interesting data about house building and sales in Cornwall.

Table 253 gives the house completion data for Cornwall for 2014/15: 1880 dwellings, private enterprise and local authority and housing association, were completed and of those 400 were for housing associations, none for the council.

Table 685 shows that between 1979/80 and 2013/14 in Cornwall there were 10 275 right-to-buy sales.


Questions

1 Is it desirable to extend home ownership through discounted sales of council/housing association homes to sitting tenants

2 Is it possible and practical to enforce a one-for-one policy, one home sold, one new one built

3 If it isn’t, are the consequences, a net loss of council/association/affordable housing stock, acceptable

4 There is evidence of reselling and subletting: does this matter and, if so, why

5 How could resellling and subletting be prevented if such prevention is considered desirable,

6 Should right-to-buy be abolished

6 What should or can be done about the right-to-buy houses already resold



The new rates for local housing allowance (LHA, housing benefit for renting in the private sector) for April 2015 to March 2016 are here. (LHA 2015 tables, then tab for table 4 in the spreadsheet.)

Cornwall falls into three broad rental market areas (BRMA) for calculating housing allowance rates: Kernow West; North Cornwall and Devon Borders; and Plymouth. I have put links to maps of the areas below.

Kernow West

North Cornwall and Devon Borders

Plymouth



We have a serious housing crisis in Britain. Houses are being built at half the rate that is needed, public housing is desperately short, and private rented housing is in need of reform. In 2013/14 in England we built only a pitiful 30 590 affordable homes for social and affordable rent and 12 130 intermediate affordable homes for rent and ownership (see tables 1b and 1c in Affordable housing supply in England: 2013 to 2014, published October 2014, here).

I’m wary of the political parties’ new found interest in housing. The Labour/Tory/Libdem record in office is appalling and the approaching election seems to over-influence their views; they and the others are profligate with heady numbers and conjured funds. Nevertheless, what Labour and the Conservatives say matters: one of them will be the major party in government in May.

I have already looked at Labour’s views and, oh dear, practicalities and will apart, they are now on the right track and comprehensively embrace both public housing and private rented housing. The Conservatives have had an ideological seizure; their housing policy is a long-term project to diminish public housing and, they hope, catch votes. It will make the shortage of public housing worse. The likely result of the Tory project is that we shall see the stock of public houses in Cornwall shrink and the added shortage will lead to open market house prices and private rent increasing.

The details of the Tory project are not clear but the Tory first part is to compel councils to sell their most expensive council houses as they become vacant. There are about 10 000 council houses in Cornwall and I’m unclear of the exact effect of the Tory policy on that stock. As I understand it – the Tory manifesto has only ninety or so words on the council and housing association aspect of housing – with the money got from the sales, councils will build in cheaper areas replacement public housing, probably at dearer affordable not cheaper social rents, and hopefully in larger numbers than those sold; some of the money will be used in the second part of the Tory plans.

I should say at this point that the Tory record in building replacement houses for those sold is an utter failure. The Thatcher government of the 1980s did not wish to see them replaced and the housing stock available for public rent shrank and that initiated our current shortage. Since 1980 1.88 million public houses and flats have been sold and only 345 000 replacements built. Labour did nothing with effect between 1997-2010 to deal with the Tory stupidity. The Thatcher desire to increase private ownership has been frustrated and a failure: there are proportionately fewer owner occupied houses in England now than when Thatcher was prime minister. The replacement record of the Tory Libdem government since 2010 is, well, unencouraging: see the post I wrote recently about the dire figures. The likely effect of these forced sales is a net loss of council housing stock available to locals wishing to, only able to, rent.

The Tory figures for the amount to be raised by the enforced sales are speculative of course. That’s a courteous way of saying they don’t know how much they would raise.

On top of the loss of council housing the second part of the Tory project will add the compelled sale of housing association social housing at large discounts (up to about £77 000 in Cornwall) to tenants who have been in the house/flat for three years, a random redistribution of public money to the comfortably housed.

There are several problems.

First, these houses belong to housing associations which are not part of the State but independent organisations and often charities. If a Tory government tries to compel them to sell their possessions, they will probably contest that in the courts. Result: uncertainty, which will also affect investors as in the next paragraph. It would be bizarre to see the Tories, the party of private property, seizing others’ properties.

Second, the associations raise money for building more affordable houses based on their assets, the houses they presently own. If those are being seized, investors are likely to be shy of investing. Result: loss of funds, fewer affordable houses built.

Third, if the houses and flats are sold to present tenants, they will not be available to rent as public housing to people on housing waiting lists. Result: a loss of public housing, longer waiting lists. Actually, history suggests that many of them will be sold on and become buy-to-let properties in the private rented sector: there will be a double cost to taxpayers, an initial purchase subsidy and then housing benefits.

Fourth, People will increasingly be pushed towards the private rented sector where rents are higher than in public housing. Tenants will need financial support in paying the rent. Result: a higher bill for housing benefits.

Fifth, The Tory hope is that the funds from the sale of dear council houses will not only build replacement houses but also compensate the housing associations for the loss of their house/flat assets. Some hope.

Sixth, if tenants of housing association properties are to be enabled to buy their house, why should not tenants in private rented housing be similarly enabled? Is it just to exclude them?

Note that many former council houses sold to tenants have been sold on to landlords and are now in the private rented sector and attracting housing benefits for the new private tenants: the double cost to taxpayers I mentioned above.

On benefits, note that the Tories plan to cut them by £12 billion if they win the election. Presumably housing benefit will be in that cut.

Selling the dearest council houses and moving the tenants to replacement houses in poorer areas is in effect cleansing well-heeled areas of the poor and creating and entrenching class apartheid in housing. Public housing will increasingly be seen and stigmatised as housing of last resort for the poor. The Tory housing policy is probably the worst of all the election policies of any party.

There are about 29 000 on Cornwall Council’s housing waiting list.

Related posts
Right to buy 28 February 2015



“The reality is that the numbers are rising” Brooks Newman on homelessness and rough sleepers

A couple of days ago there was a parliamentary debate initiated by Brooks Newmark, a Tory MP, on the unglamorous topic of homelessness and rough sleepers, mainly focused on London. The only backbencher to take part was the Tory MP for Truro and Falmouth, Sarah Newton, who made some brief and positive contributions. She deserves thanks for her genuine interest.

Unusually, I am going to put here without comment by me some of what Newmark and Newton said in the debate. It’s in Hansard (25 March 2015, column WH536 onwards) and should be widely read. It explains the increasing numbers of homelessness and rough sleeping people, very bluntly discusses the causes, and points to progress and solutions. It is a capital introduction.

Sarah Newton
“The Children’s Society looks after vulnerable 16 and 17-year-olds. It has told me that more than half the youngsters in that vulnerable age group who go along to local authorities are rejected. They are not properly assessed or given support, and some are labelled as intentionally homeless. In addition to the excellent work done by Crisis, the Children’s Society’s work draws us to conclude that there is a severe need for a proper review in the next Parliament of what local authorities are doing to implement their statutory responsibilities to conduct proper assessments.”

Brooks Newmark
“…the government changed the methodology used for local authority rough sleeping counts to make them more accurate in tracking annual trends…

…there has been a continued growth in returner rough sleepers in London, and that is a matter of concern. One possible factor in that is the cuts that many local authorities have made to their Supporting People budgets. Those cuts mean that people who leave the street do not get the support they need to sustain accommodation in the long term.

Turning to some of the key causes of homelessness, people become and stay homeless for a whole range of complex and overlapping reasons. Solving homelessness is about much more than putting a roof over people’s heads. Anyone can become homeless, but certain individual factors make it more likely, including relationship breakdown, leaving care, substance abuse and physical and mental health problems. A recent report for Crisis on the experience of single homeless people found that almost half of them had experienced mental ill health, drug dependency, or alcohol dependency, or had served a prison sentence.

Structural factors also play a major role. The continued shortage of housing and the ongoing effects of the economic recession are major drivers of homelessness. The welfare and housing systems have traditionally acted as a buffer between unemployment, poverty and homelessness. Government reforms, particularly cuts to housing benefit, are eroding that safety net. In particular, housing benefit has been cut by around £7 billion. Also, housing supply has not kept pace with demand for many decades. In total, almost 137,000 new houses were supplied in 2013-14—well below the estimated 232,000 required to keep up with demand.

…the Government, much to their credit, have invested £20 million in the homelessness transition fund, which supports 175 voluntary sector projects for single homeless people. The fund also supported the national roll-out of the No Second Night Out initiative. Indeed, No Second Night Out has been successful in supporting many new rough sleepers in moving off the streets. Some 67% of the rough sleepers worked with were taken off the streets after the first night that they were found to be sleeping rough, and the majority of them did not return to the streets once helped.

…the Department for Communities and Local Government introduced the gold standard programme, which is a set of best practice principles for local authorities to sign up to, designed to drive improvements in housing options services. DCLG also invested £13 million in the Crisis private rented access scheme. Since the creation of the scheme, 153 voluntary sector-led projects have helped 9,320 vulnerable people into accommodation, with more than 90% maintaining tenancies for at least six months.

Crisis recently conducted a mystery shopping exercise, in which eight formerly homeless people visited 16 local authorities to examine the quality of advice and assistance that they provide to single homeless people. In well over half the 87 visits, the help offered was inadequate. In 29 cases, they were simply turned away without any help or the opportunity to speak to a housing adviser, despite the mystery shoppers portraying individuals in very vulnerable situations, including someone who was forced to sleep rough after losing their job, a young person thrown out of the family home, a victim of domestic violence and a person with learning difficulties.”

Note
The data for homelessness and rough sleeping by council areas is at the two following websites:

Homelessness data (Table 784)
Rough sleeper data

This post contains parliamentary information licensed under the Open Parliament Licence v3.0



A general election is coming and the parties are showing an interest in housing that has been wholly absent for three decades. They are falling over themselves to declare how many more houses will be built if they win power than if their rivals win. Parties whose previous approach was more or less, Let them sleep in tents, and who slept comfortably in beds in houses at night while millions didn’t, now ply us with their genuine, deeply-felt concern, newly discovered like stout Cortez’s Pacific.

Look in the Daily Telegraph here for a brief guide to the parties’ policies and numbers. I shall focus on the two main parties of government, Labour and the Conservatives. One of them will be in government after the election.

Labour

The Labour party, the party of progress and reform, with an appalling, indefensible record of indifference to people’s need for housing and with scandalously low numbers built during its thirteen years in office, says there will eventually be 200 000 a year of all sorts of new houses built if it wins power. Of course the party and government won’t be building any; a Labour government would merely create the conditions for others to do the work.

I am not convinced. The Labour plan, unambitious in numbers about both market and affordable homes, nods towards the funds necessary for this but it lacks sufficient worked through details for me to believe that it is anything other than the hasty combination of guilt and imminent election. I should be happy to be very wrong.

Conservatives

Along come the Tories who are the chief authors of our housing shortages: from 1980 they sold off public housing for good and bad reasons and disastrously prevented a replacement program so that the public stock of housing diminished; the numbers of market houses built also fell. It was a signal and stupid failure by Tory ideologues and we live with the consequences today.

Alas, these Bourbons appear to have learned nothing. Their election bait is 200 000 starter homes for purchase: see the part in the Labour comment above about the government itself not building any. The details are sketchy – a feature of all the parties’ plans – but it appears that to fund a 20 percent discount for the first-time buyers purchasers of each home the Tories will remove from the developer any requirement for a proportion of the homes built to be affordable or to pay money to the council in lieu of his building them (and they will remove infrastructure requirements too). This will have sure effect: a reduction in the number of affordable homes for rent that are built. Additionally, small developments will be exempt from the requirement for a proportion to be affordable, another policy which will reduce the number of affordables built. The current Tory Libdem one-for-one replacement program is turning out to be one-for-ten or-so thus also reducing the public stock of affordable houses for rent.

Centre v local

The major need now is for affordable homes to rent; the purchase of ‘affordable’ homes is now out of reach of most on housing waiting lists. Neither Labour nor Tories have faced up to this.

Nor have they resolved the central difficulty of housing policy. The government proposes, the planning committee disposes. Even if the developers draw up schemes and find the funds and the construction industry can find the labour and materials, the parties’ house building targets can only succeed if the plans are passed, the site and house tenures agreed. At present the government in effect leans on councils and most plans are passed but enough are not to throw doubt on aims to double the current annual number of houses of all sorts built. New county (local) and parish (neighbourhood) plans are likely to restrict building in direct challenge to the parties’ aims. In many places, including Cornwall, localism doesn’t like more than a handful of new houses for locals and even jibs at current inadequate totals. There is a chasm between the parties’ aims and local aims.

The question is then, Who gets to decide whether new houses are built? The government or the local councillors with local electors breathing down their necks? And which locals: do the comfortably housed locals drown out the voices of those locals looking for an affordable house?

Housing and localism

I discussed some of the problems with localism and housing three years ago in the post The trouble with localism. I think some points are worth repeating.

<<The other [problem with localism] is the likelihood that the locality wherever it is will consult its own immediate interests, or perhaps rather the interests of the noisiest with the sharpest elbows, and disregard the wider interests of the community and country or even the interests of quieter, powerless people in the locality. Yet those wider localities will be expected to pay the bill for local decisions…

I point out again that localism might mean very few affordable houses get built anywhere if locals decide. Read this report [Localism is making housing shortage worse, warns new report, Guardian 24 June 2011].

Two years ago, during a debate in the Commons on 3 June 2009 about the relationship and distribution of powers between central and regional and local government, Peter Soulsby, then Labour MP for Leicester South, made a telling point which shattered the simplisticism of a hymn to localism. The debate begins at column 352 and I urge you to read it.

Soulsby argued reasonably that, while subsidiarity, the devolution to the local level of as much as possible, mattered, there was a tendency for local councils to reject housing plans in their areas on nimby grounds (column 357). This meant that a higher authority — in his view regional — had to tell them they must provide the housing. He added, absolutely rightly I think, that that the voices of local people seeking their first house and affordable housing ‘are far too easily drowned out by those who wish to oppose housing development in certain areas’ (column 362). Central government had to overcome the local tendency to say no by setting housing targets ‘to reflect the needs of people throughout the country.’

I think Soulsby demonstrated that localism has its limits and drawbacks.

Andrew George, Libdem MP for St Ives, who initiated the debate, endeavoured to reconcile the desire to see local powers with the reality of how such powers could be used to frustrate affordable housing. He agreed that a local council failing to meet local demand for affordable housing should be subjected to ‘pressure’ from central government, whatever ‘pressure’ means (column 357).

What is interesting in all this is that fairly uncritical and simplistic claims for more powers for local decision-making by local councils or local people are confronted by two egregious examples of the likely failure of localism, the provision of affordable housing and gipsy sites. I think outside direction by central or regional government is needed to secure desired ends and those ends might well not be what many local people wanted. Additionally, localism turns out to be, well, not quite as local as people thought it would be.>>

Previous posts
Numerous posts on housing and affordable housing can be found through the blog search box. Similarly for localism.


RIGHT TO BUY

28 February 2015


“Every additional home that is sold will be replaced by a new affordable home on a one-to-one basis” Grant SHAPPS, when housing minister

Last September I wrote a post about the right-to-buy council/social houses and the importance of replacing those sold: Replacing lost homes: how Cornwall MPs voted.

Caroline Lucas, the Green MP, presented an admirable, sensible, rational, and practical amendment to the Deregulation bill, a proposal to “require the minister to produce a plan to replace affordable homes lost in England as a result of Right to Buy, review the effectiveness of current policy, and carry out an assessment of changes since 2012 before making further policy changes” (Hansard 23 June 2014 column 116, 125). Extraordinarily, five Cornwall MPs voted against the proposal and no vote is recorded for Stephen Gilbert.

The Tory Libdem promise
I am returning to this topic because the latest figures for sold and replaced from the Department for communities and local government (DCLG) are alarming. The Tory Libdem government revamped the purchase discounts for tenants in April 2012. It assured that every additional home sold would be replaced on a one-to-one basis using the receipts from the right-to-buy sales.

What happened
The latest figures show that 26 750 houses have been sold in England under right to buy between April 2012 and December 2014 (DCLG Live Table 692: see link at the foot of the post).

In that time 2712 additional replacement homes have been started, approximately one for ten sold (Live Table 693).

There is of course an inherent time lag between sale and starting a replacement build using the receipts from right-to-buy. However, the gap between the figures is much too large for natural drag; the replacement program isn’t working and the stock of public housing is being reduced at a time when house prices on the open market mean many people need an affordable house to rent or buy. The DCLG should look at Lucas’s dismissed amendment and urgently scrutinise the program and tell us what it will do with effect to stop the depletion of the stock of public housing. Of course, I am assuming it meant its one-for-one promise and wishes to maintain and increase the affordable stock. Those in Cornwall, including MPs, who make much about affordable housing should press the DCLG for a practical response.

Pantomime in Cornwall
On a side note, a pantomime in Cornwall. Initially Cornwall Council told the DCLG that since April 2012 the county had started nearly 1100 additional replacement homes using by right-to-buy receipts; now we learn the actual number of replacements started April 2012-December 2014 is 15 (DCLG Live Table 693, Inside Housing 25 February 2015, Independent 27 February 2015. It has sold 113 through right-to-buy in the period (DCLG Live Table 691). Note that the replacements are starts and acquisitions, unseparated in the data.

Cornwall wasn’t the only council to make a mistake and lead the DCLG to put out incorrect figures, though it was way in front of the pack. Apparently a major cause was some councils adding together houses built using by right-to-buy receipts and the Homes and Communities Agency or Greater London Authority funds. In a note at the foot of its Live Table 693 explaining the several causes of the muddle the DCLG says grimly, “It is possible that interpretation of starts and acquisitions by local authorities may still not be uniform.” The DCLG should ask for information in a way that makes misinterpretation ordinarily impossible.

Waiting
Oh, and there were 29 554 households on the Cornwall Council imperfect housing waiting list on 24 November 2014 (council answer 25 November 2014 to someone’s FOI request).

The DCLG figures are in these spreadsheets.

Have confidence in your masters.



Let me draw your attention to three measures by the Tory Libdem government – the government of all six Cornwall MPs – that damage the provision of affordable housing.

First, recently the government has decided that housing developments of ten or fewer houses do not have to either include any affordable housing or pay cash in lieu of the unbuilt houses. The figure is five for very rural sites. This will reduce the number of affordables built and councils in England are taking the government to judicial review. In Cornwall, despite the large adverse impact upon the affordable program, the response of the Libdem/Independent unitary council cabinet has been to duck below the parapet, apparently in case challenging the government impairs the claims for more local powers. See here. Devolution silences Cornwall.

Second, though of less impact in Cornwall, the Tory Libdem government recently decided that the developers of large empty properties no longer have to pay a levy towards affordable housing. See here. The financial loss to councils and the numbers of affordable houses that can be built in London, for example,  are vast.

Third, the government promised that every social-rent affordable house sold under its revived right-to-buy policy would be matched by a new affordable house built. Grant Shapps, the then housing minister said, “Every additional home that is sold will be replaced by a new affordable home on a one-for-one basis”. In fact so far a new one has been built for every five sold, a serious depletion of the public housing stock at a time of large waiting lists. See here.

Tories and Libdems in government talk about supporting affordable housing; they pursue policies that reduce it.