Category Archives: Policy

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