Category Archives: Housing

The principle of using housing wealth to fund social care is a fair proposal – just not in this form

‘Heartless, nasty and cruel’ said Tim Farron. An ‘incompetent U-turn’ claimed Ed Miliband. The outcry surrounding Conservative plans, branded a ‘dementia tax,’ to reform social care funded by pensioners’ property wealth culminated in the attempted reassurance by Theresa May that ‘nothing had changed.’ Even the most casual observer to politics will be aware that the party’s electoral success depends heavily on its core support of the elderly – the so-called ‘grey vote.’ An ICM/Guardian poll last month for instance demonstrated that 85% of the over-75s asked intended to vote Conservative. The problem which the country is now squaring up to, however, is the universally accepted notion that social care is underfunded. Following David Cameron’s victory in 2010, the following statistics were deemed a key issue for parliament – 10 million people in the UK are over 65 years old.  The latest projections are for 5½ million more elderly people in 20 years time and the number will have nearly doubled to around 19 million by 2050.

Funding, as we know, would have to be generated to pay for this by a) higher taxation or b) greater borrowing by government. Rather than simply funding this through a national income tax, the idea of drawing on the vast piles of accumulated wealth through residential property to fund elderly care is, on the surface, a sensible idea to partly redress the wealth disparity between young and old. Torsten Bell’s piece for the Resolution Foundation marked this as a turning point for ‘intergenerational fairness,’ given the faltering of past political attempts such as the mansion tax to swing the balance away from the economically active to the more affluent elderly.

The idea based around a false sense of meritocracy that one should not be penalised for ‘working hard, paying your taxes etc.’ is so deeply engrained in society that it fails to recognise the spectacular post-1980s boom in housing values which were caused by complex economics totally outside the control of the vast majority of the population. The reaction to this also highlights the anxiety in this country regarding the transfer of wealth inter-generationally. Assets passed down to younger family members are, aside from further inflationary schemes such as Help to Buy, the easiest path to future housing wealth and create a dramatic range in prosperity among the inheriting classes.

Resolution Foundation - ONS

source: Resolution foundation

The levels of fear which snowballed among middle-England pensioners over the weekend was the prospect of entire life savings and property disappearing down to the last £100k all through no fault of their own. The attempt by the Government to save vast sums of money on funding social care by having no cap on the upper limit was what proved so toxic.

A fairer idea would be to pool wealth from all pensioners with assets over £100k, either through a fixed sum or a percentage of total assets upon retirement or death which contributes to a national programme of social care (see Gordon Brown’s 2010 policy.) The same thinking can be applied to the often wasteful use of the ubiquitous winter fuel allowance and free bus passes for property-rich over 65s. It is misleading and outdated to cast all pensioners as ‘vulnerable’ and given that 76% of them own their properties, it is sensible to use this uplift in property value over the years to contribute to public services. What is clear, however, is the utter outrage this causes when put to the electoral test.


Housing White Paper: Keep on renting

Declaring the housing market as ‘broken,’ would have been an appropriate title for any white paper on housing since the early 2000s. Eric Pickles, Brandon Lewis and now Gavin Barwell have overseen Conservative housing policies at a time when ownership has been continually dropping and housing has become increasingly present in the public conscience. 

The end of home ownership as a priority?

The main soundbite which strayed in and out of national news this week was the departure from subsidising home ownership under Cameron/Osborne to the belated green light to PRS developers under the May government. The idea of convincing a nation to shelve its Englishman’s castle mentality to prepare for a future of renting is one which will take time to absorb. While sold as a way of providing security to those currently trapped in the often damp, inhospitable and unreliable conditions of the private rented sector, this was an altogether new strategy to support purpose-built developments which are more likely to provide long-term secure tenancies.

Underpinning this policy is the fact that the rental sector is a gigantic unearthed commercial opportunity. The UK’s private rented sector is, in the most part, loosely regulated, informal and used by buy-to-let individuals to derive a second income. Government support for a more comprehensive PRS sector will please financial institutions who are always on the lookout for new ways to channel the pot of idle pensioner savings in the region of around £90bn according to property analyst Andrew Teacher. The likelihood is that a boosted PRS sector will do more to improve the quality of rental housing in this country than its affordability.

Is this government getting tough on developers?

No. While the white paper does acknowledge the problems of land banking and the oligarchic nature of volume housebuilding, there is nothing that will stir up rabid discontent among the big players in the market. Speeding up construction starts from the point of planning approval from three to two years is now put to consultation and is caveated crucially by the fact it must not impair the financial ‘viability’ of a scheme. There is some encouraging news for SME builders in terms of making it easier to access finance however.

A ‘Downsizing Revolution?’

This was the Daily Mail’s Monday morning headline, who joined the Telegraph in sensationally overplaying the content of the housing paper on encouraging elderly people to move out of large family homes.

The academic Danny Dorling describes not a ‘housing crisis’ per se but a crisis of accommodation, by which if all the available stock was redistributed in the right areas, the demand for housing would be satisfied. One major social divide in the housing sector is a generational one, which leads to a gap in the fortunes of young and old. However there is a serious undercurrent to the lack of appropriate housing for the elderly, which is tied in with the incapacities of social care at local level. Similar government backing should be made to providers to improve this sector.

We need to move on from blaming local authorities

In general, UK governments, whether local or national, do not build housing. Our fate is very much commandeered by the large house builders and their motivation to build. Thus it is simply counterproductive and misleading to imply that councils are at the heart of a lack of housing supply. Capital controls still exist which prevent local authorities to borrow sufficiently to pursue their own housebuilding programmes. Isolated examples exist of positive and forward thinking work by the public sector to make this happen, but in the majority of cases there is simply not the political will to make it happen. The white paper does all councils to charge up to 20% more for planning fees, which has to be reinvested directly into resourcing costs which will be a welcome boost. However the financial tools on offer remain limited to personnel rather than directly commissioning housing itself. Rather than blame councils, or even developers for that matter, politicians from across all parties are beginning to reluctantly see that the public sector has to be reawakened if the level of housing supply is to meaningfully change.

All in all, the white paper provides a good statistical argument for the issues facing the industry. However it’s suggestions, of which there are few, will not tackle head on the glaring disparity between incomes and house prices and the role of inflationary housing finance. The government would have done well to feed off ideas such as the London living rent which tie rents at a third of average local earnings and be far more interventionist in addressing the planning systems’ impact on the affordability of land. Social housing remains sidelined by national government as a principle, while Right to Buy looks to be expanded rather than curtailed.

One MP described the white paper as a ‘Macmillan-like effort’ to get Britain building again. Harold Macmillan was of course acting at a time of national emergency in the postwar period and was able to pull a number of levers (most notably those of local authority departments and prefabrication) in order to reach his fabled 300,000 new homes a year. This white paper provides a mirror for our current situation, where the problem is made blindingly clear through government publications which set up questions rather than act upon them. Without fully supported local authority housebuilding, we will remain inept at building at the rate we need.

Are garden villages politically viable?


Roll the clock back twelve months from now and you might stumble upon a number of news pieces on grand housing plans, bound together by a narrative of national government tackling the problem of ‘sink estates’ head on. Pre-referendum, the government needed to be seen to be dealing with domestic issues in order to divert unwanted attention from its relationship with Europe. This year the same early January pattern was visible, using housing to create a business-as-usual distraction from Brexit uncertainty and indecision. However the announcement this week of a wave of ‘garden villages’ to create 50,000 new homes is at first a startling one to digest.

Most people living in rural areas or towns will be aware of nearby local authorities using land used for housing and typically be concerned about pressures on local infrastructure and services. Small scale additions to existing villages and towns are of course underway all over the country, whether they are branded garden villages or not. Much like the hype around garden cities in 2014, they are used fundamentally to dress up old policy in new clothes.

Dig a little deeper into the government’s press release issued on Monday and you will find that in reality the announcement merely places additional pressure on local authorities to deliver on their local plans with a fund of £6 million intended to cover resourcing costs to follow through on local planning policy.

Now the presence of a political will to build more homes is of course in simple terms a good thing, however it fails to ignore the fact that government is continually asking local authorities to approve more planning approvals with scarce resources through their local plans and zero influence on the economics of land value and housing delivery. Garden villages, after all, will only provide 48,000 homes nationally as a maximum and consume vast amounts of political capital given the sacrosanct nature of Britain’s greenbelt.

Take, for example, the site of Dunton Hills in Essex, one of the 14 proposed garden villages. Before the nearby postwar new town of Basildon was built to house over 100,000 people, the area of Dunton was home to a wave of Plotland settlements, sold to individuals at prices based on the cost of agricultural land. They are now almost all but vanished, in part due to their temporary nature and patchwork construction, but they represent a time when land was considered a resource within the jurisdiction of local government rather than an asset to pump up with the help of planning permission. Far from a New Year revelation, Dunton Hills village began its life as Dunton Garden Suburb back in 2014. Planned to provide 4,000 to 6,000 across two boroughs, it was rejected by 84% of respondents during local consultation. As the respective borough councils of Brentwood and Basildon battle with the blunt tools of local government in approving the revised scheme at Dunton Hills, messages coming from Westminster such as those from the DCLG this week fuel local anger and contribute to a sentiment of powerlessness and resentment towards an external force.

Local plans should be undoubtedly be encouraged and supported, however they should not be dressed up as a means for meeting arbitrary housing targets nationally. Local extensions to towns on greenbelt land will remain politically impotent in the near future until a strategic plan is in place to build truly ambitious 100,000+ home new towns. Placing pressure on local authorities to give green lights based on numbers alone will generate sub-standard developments which fail to provide local infrastructure or affordable housing. The housing white paper due to be produced later in the month will shed further light on the appetite of this government towards local additions to existing towns, particularly on greenbelt land.

A five-point manifesto for next week’s Autumn Statement

Next week is an important one for the immediate future of housing. A government white paper on housing will be published alongside Phillip Hammond’s Autumn Statement within the backdrop of a looming Brexit-induced rise in living costs and a growing budget deficit on the horizon. Cheap credit however is likely to herald a new phase of infrastructure spending along with greater national investment in housebuilding.

Truth be told, if any of the following are put into practice it would be a fairly drastic departure from present housing policy but here are five recommendations nonetheless:

    1. Tackle land-banking once and for all.

    50% of new housing is built by eight FTSE-100 listed companies. Collectively they are sitting on land which could be used to build over 600,000 homes. Volume housebuilders are heavily responsible for the high cost and inaccessibility of land for housing development by refusing to build at a rate which would lower prices. Effective zoning or a land value tax would speed up construction times.

    2. Grow the Private Rental Sector.

    Inflationary policies such as Help to Buy do not help those without an adequate inheritance to get on the housing ladder. If we accept that home ownership is unreachable in the current system we must improve the quality of the rental sector. This is most appropriate in urban areas of high demand where lifestyles suit the facilities and flat layouts that PRS offers.

    3. Build more social housing.

    Housing benefit stands at £13bn a year. Most of this goes into subsidising the out of control rental market and does not provide security of tenure or a guaranteed quality of living. Conservative and New Labour governments have proved ideologically opposed to the mere idea of social housing however along with its numerous benefits is also extremely efficient economically. Social housing is generally cost-neutral after 30 years and generates long term income streams for local government or housing associations.

    4. Invest in skilling up the housebuilding workforce

    Technical colleges became stigmatised in the UK as they morphed into universities, providing courses which were not always linked to need in vital areas such as construction. Post-Brexit uncertainty over the capacity of long term migrant labour means we must return to the idea of apprenticeships as a way of ensuring adequate manpower for housebuilding.

    5. Promote open-source land data

    Local authorities do not have the resources to map out every square inch of their respective areas and assess suitability for development such as custom or self-build for example. We should be encouraging tech firms to embrace this and open up land ownership data to the public via a digital format. Thankfully plans to privatise the land registry are currently on hold and we must rethink the way we assess land for development, primarily by making it more transparent.

    Looking to build your own home? Policy is slowly adapting to suit demand


    Housing policy tends to end up packaged up into short catchphrases; Right to Buy, Pay to Stay, Help to Buy, Build to Rent and so on. The latest of these is the Right to Build, which comes into effect from October 31st (today). The aim of this in simple terms is to make it easier for those with the ambition to become self or custom builders to gain access to plots of land. This quietly processed piece of legislation has potentially drastic changes to a growing sector of the housing market. It is more or less common knowledge that the private market has proved unable or unwilling to plug the supply gap since the straitjacket on local authorities was buckled tight through the imposition of borrowing caps from the mid-1980s onwards. The custom build and self build industries in this country have emerged, almost reluctantly, against the will of monopolising volume housebuilders and have only prompted legislation by swelling demand from would-be customers.

    The bill originally proposed that councils would be responsible for providing serviced plots which would be appropriate for individual or collective builders. However the complex reality of undertaking this task in the context of dwindling local authority resources meant that this became refined as a requirement to maintain a list of those willing or considering to build (in varying degrees) their own home.

    The success and popularity of similar housing sectors in other Northern European states, combined with the freedom and open-sourced potential of developing technology would hint at this being a no-brainer. The UK market has proved typically suspicious about the idea, mainly given the inertia and lack of investment in what is perpetually deemed a risky boom-and-bust industry.


    Wikihouse open-source design and build

    Perhaps the best place to start when unpacking this policy is in addressing the cost and accessibility to land. Land value taxation for instance would be an effective way of forcing developers who bank land into building on it or sell up. Stringent planning and zoning policy in favour of custom and self builders on local authority land would limit risk with, for example, custom build developers and the open the possibilities for a more varied typological approach to developing sites.

    Media outlets in home improvements and DIY serve their purpose of fuelling desires or confirming embedded suspicions among Britain’s potential custom and self builders. However the sector is now longer confined to the time-rich upper middle classes but to both the young and old generations as a meaningful alternative to the dreary options proposed in the new-build housing marketplace. Policy has been late coming, led by Richard Bacon MP and backed by heavyweight industry evidence, the new act will now require local authorities to grant planning permission for self and custom build development in line with the demand recorded from local authority registers. Interest from those willing to engage in this opportunity for a more customised and user-specific solution is vital to maintain momentum.

    Register with your local authority here

    The decision to block the CPOs on the Aylesbury Estate is good news, but why was it taken?

    Sajid Javid recently made the shock decision to overturn Southwark council’s attempt to buy out the last remaining leaseholders in order to begin demolishing the Aylesbury Estate in south London. A shock both because it came from Javid himself (a former investment banker at Deutsche Bank not typically associated as a saviour of social housing) and because it was made on the grounds of ‘human rights’ despite the wealth of available historical examples where such rights were seemingly of secondary importance. Used by Tony Blair as the location for his first speech as Prime Minister and by Channel 4 to depict a damp, dreary scene of satellite dishes and washing lines, the estate has arguably the most turbulent past of any in the UK, pummelled by years of neglect and contempt. The design of the estate has well known architectural shortcomings, both in the inadequate lifespan of the construction method used and the sheer scale of its resolution. However the issues of estate management, affordability and rehousing of existing tenants go well beyond the discourse of design.

    The question remains as to why this decision was made at all. Is it part of a wider message projected by the new government’s initial promises of fighting inequality and social injustice? Is it an attempt to declare allegiance to leaseholders as opposed to social renters? Or, more optimistically, is it the beginning of a fresh view on problematic viability calculations on soon to be developed estates?

    At face value, the decision seems to be at odds with any government policy on social housing since the 70s. It would be a mistake to extrapolate this move as any meaningful shift towards protecting the rights of those living on threatened estates. It seems unclear how far the government want to develop the recent political construction of a move towards the centre but it is unlikely to generate a sudden swing in its appeal to voters on inner city estates.

    The process of estate regeneration in recent years to densify public land is renowned for its complexity and the precarious state in which it can leave residents. Countless examples of ill-fated revamps on estates have produced an entire generation of organised groups such as 35% or Architects for Social Housing (ASH) which campaign actively on behalf or alongside residents. The crucial political fact was recently pointed out by Paul Watt, academic at Birkbeck University, in a talk titled ‘Forgotten Estates,’ where he explained that social housing is one the three pillars, alongside the NHS and state education, which form the foundations of the welfare state. However it is the most likely, he explains, of the three to be left behind within public opinion. While we depend on state healthcare when we fall sick or send our children to state schools, the reality is, for a multitude of reasons, most of us do not live in a council property and therefore do not have direct physical or emotional connections to it as an idea. It may form the subject of superficial televised documentaries in order to expose the dire situation of those faced with eviction, but the simple fact remains that social housing does not rank high enough alongside immigration or the NHS as political treasures worth investing in or dealing with.

    It also would be a mistake to explain the decision simply because it referred specifically to leaseholders as opposed to tenants. This episode brings to light once again the catastrophic combination of the Right to Buy and estate demolition. While it must be said that in many cases leaseholders are indeed able to get a good deal for their property which they invariably acquired at a massive discount, there are also huge losses from this process. As recently explained by George Turner, while the principle of buying your own council property at a discount understandably seems an attractive prospect, the eventual reality is that you have only marginally more rights than social tenants. If the price paid by the council for your property in the event of demolition is pegged by its ‘market value,’ then the property is invariably worthless on the open market and often generates a CPO value of around a third of similar local properties. Consequentially this means residents either move out of high value areas such as London as they cannot afford to buy a similar sized property outright or typically take one of the shared ownership offers available on the newly built part of the site.

    Javid’s decision noted that ‘The proposed purpose of the order will have considerable economic and social dis-benefits in terms of consequences for those leaseholders remaining on the order land.’ This has called a halt to the demolition phase and brings hopes of a better deal for the eight remaining leaseholders. While Southwark contemplates legal action against this decision, this episode merely confirms the absence of a national level plan to strategically locate new, affordable housing. The lack of available land means invariably councils are pressured into densifying their stock at unsatisfactory levels of affordable housing. This decision will at least make those developing public land to think twice when offering buyouts to those refusing to leave the estate they call home.

    Right to Buy and the rural housing sell-off

    One unequivocal fact in the housing debate is the need for affordable housing in rural areas. Often ignored amid the monotonous focus of ‘housing crisis’ discourse related to urban areas, peripheral parts of the UK face huge struggles in the face of uncertain employment opportunities and the attractiveness of rural property in the UK market. The upcoming Housing and Planning Bill which has quietly navigated its way along the political channels to the point at which it is a seemingly an inevitable conclusion to a process which has seen sparse evidence of coherent public or political debate.

    Within what could be deemed a generally contentious bill among those working in the housing industry, the most hotly contested aspect is that of the extension of the Right to Buy. Right to Buy has stood the test of time since its inception in the 1980s and is now proposed to be extended to a wide variety of different modes of housing provision, including housing associations and bizarrely including sectors such as co-operatives which were initiated in direct opposition to the principles of Right to Buy.

    Of course it is nonsensical to be blankly opposed to the concept of home ownership, not least given its political resourcefulness among the electorate, and while being advertised as a ‘voluntary’ measure, the prospect for any individual or family of securing a huge discount on a property in an era of negative interest rates will be undoubtedly attractive given the upward curve of property appreciation in the last 30 years. However what is blindingly clear to those who operate in local authorities is that this measure will come at huge financial and social cost. Rural communities appear to be particularly poorly documented when it comes to the affordability crisis among those unable to yield the necessary capital to leap haphazardly on to that all important first rung of the housing ladder.

    For instance in the recent debate on the Housing Bill in the House of Lords, Exmoor was cited as an example of an area characterised by idyllic countryside, prime for second home owners yet also inhabited by a local population who no longer work in industries such as agriculture but work on a seasonal basis often in low-paid ‘cash in hand’ jobs which renders them far outside the boundaries of mortgage lenders’ requirements. In such areas, building contractors charge a premium for the difficult accessibility to sites which are available for construction and property values are approximately 8 times average salaries, making the area arguably more unaffordable than London’s burgeoning housing market.

    The details of the proposed Housing Bill extends the Right to Buy to Housing Associations and rural local authority housing for social rent. The percentage of affordable housing in rural areas stands at only 8% compared with 20% in towns and yet these proposed measures will result in the sell-off of housing stock which can then be painlessly sold on for profit after 5 years with no requirement whatsoever for the local authority or Housing Association to replace the home with another in the same area.

    The flimsy promise of a ‘1 for 1’ replacement for homes sold off under Right to Buy is plagued with the caveats of the definition of ‘affordable’ housing which includes the government’s ‘Starter Homes’ which 79 councils across the UK tellingly regard as unaffordable. Hastoe Housing Association, one of the larger rural housing associations with 7,000 homes across 62 local authorities has been one to openly decline the offer of Right to Buy by central government, citing concerns that ‘the offer brings a serious risk that the current low volume of rural affordable housing will be further depleted.’


    Young people are thus faced with the decision of remaining in the communities they grew up in unstable jobs or move on to local towns or cities where demand in house prices is comparatively lower. Along with numerous other side effects of this process, it results in the further emptying out of rural communities, inhabited purely on a seasonal basis or exclusively by the retired community. In order to alleviate the growing scarcity of affordable rural properties in peripheral areas of the UK, this Housing Bill must be heavily amended to avoid irreversible weakening to local authorities and housing associations who carry out such essential work for local communities. If the long term aim is to reform local councils then it is by allowing them to be proactive in the way they actively develop land through more innovative financing measures, not by impeding their path to recovery.