Monday, 27 March 2017

Inside edge

All posts from: January 2010

Problem shared

Thu, 28 Jan 2010

Local authorities are about to get extensive new powers over the private rented sector but are they equipped to use them?

Housing minister John Healey confirmed yesterday that new houses in multiple occupation (HMO) will need planning permission and that councils will be able to introduce new selective licensing schemes in areas with substantial numbers of substandard properties without permission from central government. Meanwhile a new national register of landlords will be part of a package of new reforms due shortly in the government’s response to the Rugg review.

The proposed new use class for HMOs - defined as properties shared by three or more people who are not part of the same household - has already drawn protests from landlords and cheers from local campaign groups. 

The National Landlords Association (NLA) accused Healey of ‘taking a sledgehammer to crack a nut’ and warned that it would reduce the supply of shared homes (20% of the private rented sector and rising) and create no-go areas for students and migrant workers.

But they will be popular with resident groups and could be a big vote winner in towns and cities with large numbers of students. Communities secretary John Denham tells his local paper in Southampton today: ‘I’ve campaigned for these changes, alongside local residents, for years so am delighted they will now be made.’

The big question though is whether local authorities will be able to cope with the new system. The report on mandatory licensing of HMOs published yesterday confirms that that only 16,000 out of an estimated 56,000 licensable properties were licensed in the first two years of the schemes. By March 2009, 35,000 were still unlicensed.

Add possible new selective licensing schemes, planning permission for new HMOs and dealing with the landlord register and that’s quite a workload for town halls. The Rugg review described the planning permission idea as ‘an extreme response given the limited nature of the problem. Change to the use classes order introduces the need for additional activity that local authorities are ill-equipped to handle’.

John Healey acknowledged the problem in his statement. ‘I am therefore reviewing the support available to local authorities in relation to regulation of the private rented sector,’ he said, ‘including publishing draft guidance on licensing provisions, and will put in place any changes before the commencement of the new powers I am announcing today.’ 

However, with public spending cuts imminent, it’s a problem that won’t go away

Problem shared

Thu, 28 Jan 2010

Local authorities are about to get extensive new powers over the private rented sector but are they equipped to use them?

Housing minister John Healey confirmed yesterday that new houses in multiple occupation (HMO) will need planning permission and that councils will be able to introduce new selective licensing schemes in areas with substantial numbers of substandard properties without permission from central government. Meanwhile a new national register of landlords will be part of a package of new reforms due shortly in the government’s response to the Rugg review.

The proposed new use class for HMOs - defined as properties shared by three or more people who are not part of the same household - has already drawn protests from landlords and cheers from local campaign groups. 

The National Landlords Association (NLA) accused Healey of ‘taking a sledgehammer to crack a nut’ and warned that it would reduce the supply of shared homes (20% of the private rented sector and rising) and create no-go areas for students and migrant workers.

But they will be popular with resident groups and could be a big vote winner in towns and cities with large numbers of students. Communities secretary John Denham tells his local paper in Southampton today: ‘I’ve campaigned for these changes, alongside local residents, for years so am delighted they will now be made.’

The big question though is whether local authorities will be able to cope with the new system. The report on mandatory licensing of HMOs published yesterday confirms that that only 16,000 out of an estimated 56,000 licensable properties were licensed in the first two years of the schemes. By March 2009, 35,000 were still unlicensed.

Add possible new selective licensing schemes, planning permission for new HMOs and dealing with the landlord register and that’s quite a workload for town halls. The Rugg review described the planning permission idea as ‘an extreme response given the limited nature of the problem. Change to the use classes order introduces the need for additional activity that local authorities are ill-equipped to handle’.

John Healey acknowledged the problem in his statement. ‘I am therefore reviewing the support available to local authorities in relation to regulation of the private rented sector,’ he said, ‘including publishing draft guidance on licensing provisions, and will put in place any changes before the commencement of the new powers I am announcing today.’ 

However, with public spending cuts imminent, it’s a problem that won’t go away

Unequal opps

Wed, 27 Jan 2010

It’s hard to get much past that startling stat about the median household wealth of social housing tenants (£15,000) and outright home owners (£411,000) but today’s National Equality Panel has some others that are just as eye-catching.

Income inequality has actually improved slightly over the last ten years - though with minimal impact on the deterioration that happened between the late 1970s and late 1990s. The median income of council tenants was 68% of the overall median between 2005/06 and 2007/08 compared to 67% 1996/97 and 1998/99.

That’s presumably the result of policies like the minimum wage and tax credits but it’s a real achievement given that allocations policy and the right to buy have encouraged greater concentrations of low and non-earners in social housing.

Although home ownership explains the greater part of the wealth inequality it’s not all about bricks and mortar. Even when property wealth is discounted, the disparity is still stark: social tenants still have £15,000 median financial and non-property wealth, or £18,000 when non-state pension rights are included; outright owners have median financial and non-housing wealth of £85,000, or £201,000 including private pension rights.

That inequality starts in childhood and carries on until death. A study of people aged over 50 found that 90% of men and 95% of women in the wealthiest fifth of the population survived over a six-year period. The equivalent figures for people in the poorest fifth were 75% of men and 81% of women.   

And it is then passed on down the generations. By 2005 almost half of first-time buyers got help from family or friends with their deposit. Those receiving assistance were able to pay an average deposit of £34,000, those who didn’t paid an average £7,000.

That factor has become even more important since the credit crunch prompted the banks to demand much bigger deposits.

All the money invested in area regeneration has had little impact on inequality between areas. In 2001 the government’s vision was that ‘in 10 to 20 years, no-one should be seriously disadvantaged by where they live’. The panel concludes that ‘we are still a very long way from achieving this goal’ and argues that ‘the neighbourhood renewal agenda itself needs renewal’.

But there’s another big disparity too: the number of mentions housing gets in the panel’s report (244) and in the government’s response to it (12). Most of those are to do with what the government has done to address the problem so far. Helping people on to the housing ladder through Homebuy and tackling poor housing conditions through Decent Homes may have been laudable enough in their own right but they’ve clearly not done much to reduce inequality overall.

As to what should happen next, the panel chaired by John Hills of the LSE has some suggestions. First, in an echo of the other Hills report, it says ‘we need to be more successful in using the advantages of security and work incentives that social housing can offer to support tenants in moving towards and into employment’.

Second, it points out that most social tenants have very low levels of assets of any kind and ‘measures to support saving and asset-building by tenants are needed to address this.’

The government may have made limited progress on reducing inequality but by commissioning and publishing the report it has at least ensured that the issues continue to be debated.

Which is important because there is the looming issue of what happens in the wake of the recession. Will our response to it end up making inequality even worse? ‘A fundamental question is now whether the costs of recovery will be borne by those who gained least in the period before the crisis, or by those who gained most, and are in the strongest position to bear them.’

Unequal opps

Wed, 27 Jan 2010

It’s hard to get much past that startling stat about the median household wealth of social housing tenants (£15,000) and outright home owners (£411,000) but today’s National Equality Panel has some others that are just as eye-catching.

Income inequality has actually improved slightly over the last ten years - though with minimal impact on the deterioration that happened between the late 1970s and late 1990s. The median income of council tenants was 68% of the overall median between 2005/06 and 2007/08 compared to 67% 1996/97 and 1998/99.

That’s presumably the result of policies like the minimum wage and tax credits but it’s a real achievement given that allocations policy and the right to buy have encouraged greater concentrations of low and non-earners in social housing.

Although home ownership explains the greater part of the wealth inequality it’s not all about bricks and mortar. Even when property wealth is discounted, the disparity is still stark: social tenants still have £15,000 median financial and non-property wealth, or £18,000 when non-state pension rights are included; outright owners have median financial and non-housing wealth of £85,000, or £201,000 including private pension rights.

That inequality starts in childhood and carries on until death. A study of people aged over 50 found that 90% of men and 95% of women in the wealthiest fifth of the population survived over a six-year period. The equivalent figures for people in the poorest fifth were 75% of men and 81% of women.   

And it is then passed on down the generations. By 2005 almost half of first-time buyers got help from family or friends with their deposit. Those receiving assistance were able to pay an average deposit of £34,000, those who didn’t paid an average £7,000.

That factor has become even more important since the credit crunch prompted the banks to demand much bigger deposits.

All the money invested in area regeneration has had little impact on inequality between areas. In 2001 the government’s vision was that ‘in 10 to 20 years, no-one should be seriously disadvantaged by where they live’. The panel concludes that ‘we are still a very long way from achieving this goal’ and argues that ‘the neighbourhood renewal agenda itself needs renewal’.

But there’s another big disparity too: the number of mentions housing gets in the panel’s report (244) and in the government’s response to it (12). Most of those are to do with what the government has done to address the problem so far. Helping people on to the housing ladder through Homebuy and tackling poor housing conditions through Decent Homes may have been laudable enough in their own right but they’ve clearly not done much to reduce inequality overall.

As to what should happen next, the panel chaired by John Hills of the LSE has some suggestions. First, in an echo of the other Hills report, it says ‘we need to be more successful in using the advantages of security and work incentives that social housing can offer to support tenants in moving towards and into employment’.

Second, it points out that most social tenants have very low levels of assets of any kind and ‘measures to support saving and asset-building by tenants are needed to address this.’

The government may have made limited progress on reducing inequality but by commissioning and publishing the report it has at least ensured that the issues continue to be debated.

Which is important because there is the looming issue of what happens in the wake of the recession. Will our response to it end up making inequality even worse? ‘A fundamental question is now whether the costs of recovery will be borne by those who gained least in the period before the crisis, or by those who gained most, and are in the strongest position to bear them.’

Half steam ahead

Tue, 26 Jan 2010

Mortgage approvals ended 2009 at double the level of a year ago and higher than at any time since the early stages of the credit crunch but the indications are of a slowdown to come.

December figures from the British Bankers Association (BBA) show 45,897 loans were approved for house purchase. The comparison with December 2008 (22,695) and September 2007 (54,913) shows the scale of the recovery but there are good reasons to think it may be about to run out of steam.

First, the total may have been distorted by the end of the stamp duty holiday on properties worth up to £175,000 at the end of the year. The rush to complete the paperwork means that approvals from January and Februrary were probably brought forward.

Second, the recovery has already been slowing down. In the eight months between the low point of November 2008 and July 2009 approvals rose by 131%. In the five months since they are only up 12%.

Third, approvals for house purchase had slowed down dramatically even before the credit crunch. The average monthly total between 2000 and 2006 was 71,000 - so approvals running at 40-45,000 a month are hardly exceptional.

Fourth, the average loan approved for house purchase actually fell between November and December from £142,200 to £141,100 - although that may have been distorted by a larger than normal level of cheaper purchases that were beating the stamp duty deadline but it was actually the first fall.

Fifth, High Street banks now control three-quarters of the mortgage market, up from two thirds before the credit crunch. That’s the result of takeovers, the exit of specialist lenders from the market and problems faced by building societies in keeping hold of savers’ deposits, but it leaves the housing market more dependent than ever on a handful of major companies.

None of which suggests that a broad-based recovery including large numbers of first-time buyers is going to happen any time soon.

Half steam ahead

Tue, 26 Jan 2010

Mortgage approvals ended 2009 at double the level of a year ago and higher than at any time since the early stages of the credit crunch but the indications are of a slowdown to come.

December figures from the British Bankers Association (BBA) show 45,897 loans were approved for house purchase. The comparison with December 2008 (22,695) and September 2007 (54,913) shows the scale of the recovery but there are good reasons to think it may be about to run out of steam.

First, the total may have been distorted by the end of the stamp duty holiday on properties worth up to £175,000 at the end of the year. The rush to complete the paperwork means that approvals from January and Februrary were probably brought forward.

Second, the recovery has already been slowing down. In the eight months between the low point of November 2008 and July 2009 approvals rose by 131%. In the five months since they are only up 12%.

Third, approvals for house purchase had slowed down dramatically even before the credit crunch. The average monthly total between 2000 and 2006 was 71,000 - so approvals running at 40-45,000 a month are hardly exceptional.

Fourth, the average loan approved for house purchase actually fell between November and December from £142,200 to £141,100 - although that may have been distorted by a larger than normal level of cheaper purchases that were beating the stamp duty deadline but it was actually the first fall.

Fifth, High Street banks now control three-quarters of the mortgage market, up from two thirds before the credit crunch. That’s the result of takeovers, the exit of specialist lenders from the market and problems faced by building societies in keeping hold of savers’ deposits, but it leaves the housing market more dependent than ever on a handful of major companies.

None of which suggests that a broad-based recovery including large numbers of first-time buyers is going to happen any time soon.

Letting go

Mon, 25 Jan 2010

Buy to let was meant to have been killed off by the housing market downturn. Instead the signs are that it is bouncing back.

The latest indications come in a new survey by the Association of Residential Letting Agents (ARLA), which reports a surge in the number of ‘reluctant tenants’ - people who want to buy but can’t find the right mortgage or property and people who were forced to sell due to financial instability or a job move.

That grabbed my attention as the reverse of what happened in the 1990s downturn, when thousands of homeowners who had to move but could not sell became reluctant landlords.

The proportion of ARLA members reporting that there were more tenants than properties surged from 24% in the third quarter of 2009 to 41% in the fourth quarter. 

As the housing market crash started in August 2007, 51% of ARLA members said there were more tenants than properties but that the proportion fell to just 10% as the crash bottomed out in February 2009.

The first stages of the recession saw several thousand buy-to-let properties either repossessed or with a receiver of rent appointed (including two in my street alone). However, low interest rates appear to have come to the rescue of many landlords since then.

The results tally with anecdotal evidence from mortgage brokers that some lenders are targetting buy-to-let landlords because they see them as less risky than first-time buyers and from housebuilders, who report an increase in the number of people buying off-plan in new developments.

November’s third quarter survey by the Council of Mortgage Lenders (CML) showed that buy-to-let lending rose for the first time in two years but that volumes were still well down on 2007.

And a separate ARLA survey of landlords suggests that the recovery is still tentative. The proportion of landlords saying they expect to buy more buy-to-let properties in the next 12 months is still stuck at around 30%, compared to more than 60% at the peak of the buy-to-let boom in 2005. The proportion expecting to sell is still below 10% but has actually risen slightly this year. 

Letting go

Mon, 25 Jan 2010

Buy to let was meant to have been killed off by the housing market downturn. Instead the signs are that it is bouncing back.

The latest indications come in a new survey by the Association of Residential Letting Agents (ARLA), which reports a surge in the number of ‘reluctant tenants’ - people who want to buy but can’t find the right mortgage or property and people who were forced to sell due to financial instability or a job move.

That grabbed my attention as the reverse of what happened in the 1990s downturn, when thousands of homeowners who had to move but could not sell became reluctant landlords.

The proportion of ARLA members reporting that there were more tenants than properties surged from 24% in the third quarter of 2009 to 41% in the fourth quarter. 

As the housing market crash started in August 2007, 51% of ARLA members said there were more tenants than properties but that the proportion fell to just 10% as the crash bottomed out in February 2009.

The first stages of the recession saw several thousand buy-to-let properties either repossessed or with a receiver of rent appointed (including two in my street alone). However, low interest rates appear to have come to the rescue of many landlords since then.

The results tally with anecdotal evidence from mortgage brokers that some lenders are targetting buy-to-let landlords because they see them as less risky than first-time buyers and from housebuilders, who report an increase in the number of people buying off-plan in new developments.

November’s third quarter survey by the Council of Mortgage Lenders (CML) showed that buy-to-let lending rose for the first time in two years but that volumes were still well down on 2007.

And a separate ARLA survey of landlords suggests that the recovery is still tentative. The proportion of landlords saying they expect to buy more buy-to-let properties in the next 12 months is still stuck at around 30%, compared to more than 60% at the peak of the buy-to-let boom in 2005. The proportion expecting to sell is still below 10% but has actually risen slightly this year. 

Decent effort

Thu, 21 Jan 2010

Whether you believe decent homes was a success or, ultimately, a failure, you will find plenty of ammunition in today’s report on the programme by the National Audit Office. You’ll also find one big question: what next?

The case in favour is that the programme tackled an urgent problem - almost 40% of social housing non-decent - and rectified it in 92% of cases by the target date of 2010. That’s quite an achievement given the £19bn repairs backlog bequeathed by the Conservatives. 

The case against is that it will take up to nine more years to get the remaining 8% of homes up to scratch. As of now, 305,000 homes are still non-decent and 124,000 will still be by 2014. 

Meanwhile, as public accounts committee chairman Edward Leigh wasted no time pointed out, the department started the programme with no clear idea of how much it would cost and still does not know how much has been spent. 

The story of decent homes is in many ways the story of the noughties. The Labour government elected in 1997 was packed with northern MPs who saw that their existing social housing stock was falling apart while there was low demand for the new ones being built. Only later did ministers realise that new homes were a major problem too and priorities abruptly changed. 

The programme was also a key weapon in the departmental campaign to get rid of council housing that had begun under the Tories. Local authorities were given three options to meet the standard - stock transfer, arm’s length management (almo) or the private finance initiative. 

The failure of that campaign in many ways explains the failure to meet the rest of the target. Some authorities and many tenants stubbornly campaigned for a fourth option and successive ministers stubbornly resisted them until doing a u-turn too late to find a way to fund the work. Meanwhile the almo programme was being dogged by delays and by the end of the noughties budgets earmarked for decent homes were being raided for new ones.

So what next? As long ago as 2004 the Office of the Deputy Prime Minister select committee called for a new, more ambitious standard - decent homes plus - to apply from 2010 onwards. Some landlords have independently applied a higher standard to their own stock.

In the meantime, environmental concerns have changed the agenda out of all recognition. Decent homes have to provide ‘a reasonable degree of thermal comfort’. But with zero carbon new homes on the horizon, and emissions from existing homes seen as a major problem, that has long sounded badly out of date. Surely something more ambitious is needed - both for social housing and the for the private rented stock accommodating vulnerable people that is also part of the decent homes programme. 

In addition to higher energy efficiency standards, landlords and tenants also told the NAO they wanted to see higher standards for individual elements like new external doors and double glazing and new ones for things outside the home - lifts and communal and external areas. 

The department and Tenant Services Authority seem to be making the right noises but so far there is no firm successor to decent homes. Reform of the housing revenue account is tantalisingly close but not there yet. But without both, and public spending cuts around the corner, it’s not hard to predict that maintenance problems and the repairs backlog will start to escalate once again. 

Decent effort

Thu, 21 Jan 2010

Whether you believe decent homes was a success or, ultimately, a failure, you will find plenty of ammunition in today’s report on the programme by the National Audit Office. You’ll also find one big question: what next?

The case in favour is that the programme tackled an urgent problem - almost 40% of social housing non-decent - and rectified it in 92% of cases by the target date of 2010. That’s quite an achievement given the £19bn repairs backlog bequeathed by the Conservatives. 

The case against is that it will take up to nine more years to get the remaining 8% of homes up to scratch. As of now, 305,000 homes are still non-decent and 124,000 will still be by 2014. 

Meanwhile, as public accounts committee chairman Edward Leigh wasted no time pointed out, the department started the programme with no clear idea of how much it would cost and still does not know how much has been spent. 

The story of decent homes is in many ways the story of the noughties. The Labour government elected in 1997 was packed with northern MPs who saw that their existing social housing stock was falling apart while there was low demand for the new ones being built. Only later did ministers realise that new homes were a major problem too and priorities abruptly changed. 

The programme was also a key weapon in the departmental campaign to get rid of council housing that had begun under the Tories. Local authorities were given three options to meet the standard - stock transfer, arm’s length management (almo) or the private finance initiative. 

The failure of that campaign in many ways explains the failure to meet the rest of the target. Some authorities and many tenants stubbornly campaigned for a fourth option and successive ministers stubbornly resisted them until doing a u-turn too late to find a way to fund the work. Meanwhile the almo programme was being dogged by delays and by the end of the noughties budgets earmarked for decent homes were being raided for new ones.

So what next? As long ago as 2004 the Office of the Deputy Prime Minister select committee called for a new, more ambitious standard - decent homes plus - to apply from 2010 onwards. Some landlords have independently applied a higher standard to their own stock.

In the meantime, environmental concerns have changed the agenda out of all recognition. Decent homes have to provide ‘a reasonable degree of thermal comfort’. But with zero carbon new homes on the horizon, and emissions from existing homes seen as a major problem, that has long sounded badly out of date. Surely something more ambitious is needed - both for social housing and the for the private rented stock accommodating vulnerable people that is also part of the decent homes programme. 

In addition to higher energy efficiency standards, landlords and tenants also told the NAO they wanted to see higher standards for individual elements like new external doors and double glazing and new ones for things outside the home - lifts and communal and external areas. 

The department and Tenant Services Authority seem to be making the right noises but so far there is no firm successor to decent homes. Reform of the housing revenue account is tantalisingly close but not there yet. But without both, and public spending cuts around the corner, it’s not hard to predict that maintenance problems and the repairs backlog will start to escalate once again. 

Rise and fall

Wed, 20 Jan 2010

The end of the outside toilet? The relentless rise in house prices? The right to buy? A fascinating snapshot of housing over the last 50 years is on offer in a new survey published by the Halifax.

None of it will come as a huge surprise to anyone working in housing now but it would have seemed inconceivable to the average housing officer in 1959.

It’s hard not to start with what’s happened to house prices. They’ve increased by 273% in real terms in the last 50 years, outstripping the real terms rise in earnings by 2.7% to 2%. That’s despite a significant fall in real house prices following each of the four big booms. The decade that saw the biggest real terms increase? No prizes for guessing it was the noughties.

At the same time the quality of our housing has improved dramatically: households without an inside toilet fell from 14% to 0.2%; households without a basic hot water supply fell from 22% to 1%; and households with central heating rose from 35% (in 1971) to 92%.

We’re living on our own more. The proportion of single-person households rose from 19% in 1971 to 33%. We’re living in bigger homes: just 10% of the homes built between 1945 and 1964 were detached; 36% of homes built over 1980 were detached.

Home ownership has risen and risen - and then fallen recently. Private renting has fallen and fallen - and then risen recently. Social renting has risen - and then fallen and fallen. 

Connected with that, and perhaps underlying all the other trends too, is what’s happened to housebuilding. More than 280,000 homes were built in Great Britain in 1959 - a level that seems unimaginable in 2009, when the latest forecasts suggest the total will be less than 160,000.

Yet private sector housebuilding has not actually varied that much. There were 153,000 private sector completions in 1959 - and 151,000 last year. In between, completions fell in the 1980s and 1990s and started rising again in the noughties - to peak at almost 197,000 immediately before the credit crunch. 

In contrast, public sector completions rose to almost 190,000 in 1970, slumped to little more than 20,000 in the early noughties and are a little under 40,000 with the public spending axe about to fall. 

Little wonder that the last 50 years saw dramatic improvements in the condition of the worst housing and then a dramatic increase in housing inequality between owners and tenants. 

Rise and fall

Wed, 20 Jan 2010

The end of the outside toilet? The relentless rise in house prices? The right to buy? A fascinating snapshot of housing over the last 50 years is on offer in a new survey published by the Halifax.

None of it will come as a huge surprise to anyone working in housing now but it would have seemed inconceivable to the average housing officer in 1959.

It’s hard not to start with what’s happened to house prices. They’ve increased by 273% in real terms in the last 50 years, outstripping the real terms rise in earnings by 2.7% to 2%. That’s despite a significant fall in real house prices following each of the four big booms. The decade that saw the biggest real terms increase? No prizes for guessing it was the noughties.

At the same time the quality of our housing has improved dramatically: households without an inside toilet fell from 14% to 0.2%; households without a basic hot water supply fell from 22% to 1%; and households with central heating rose from 35% (in 1971) to 92%.

We’re living on our own more. The proportion of single-person households rose from 19% in 1971 to 33%. We’re living in bigger homes: just 10% of the homes built between 1945 and 1964 were detached; 36% of homes built over 1980 were detached.

Home ownership has risen and risen - and then fallen recently. Private renting has fallen and fallen - and then risen recently. Social renting has risen - and then fallen and fallen. 

Connected with that, and perhaps underlying all the other trends too, is what’s happened to housebuilding. More than 280,000 homes were built in Great Britain in 1959 - a level that seems unimaginable in 2009, when the latest forecasts suggest the total will be less than 160,000.

Yet private sector housebuilding has not actually varied that much. There were 153,000 private sector completions in 1959 - and 151,000 last year. In between, completions fell in the 1980s and 1990s and started rising again in the noughties - to peak at almost 197,000 immediately before the credit crunch. 

In contrast, public sector completions rose to almost 190,000 in 1970, slumped to little more than 20,000 in the early noughties and are a little under 40,000 with the public spending axe about to fall. 

Little wonder that the last 50 years saw dramatic improvements in the condition of the worst housing and then a dramatic increase in housing inequality between owners and tenants. 

Not so sweet

Tue, 19 Jan 2010

What now looks like the inevitable takeover of Cadburys by the American food giant Kraft is another sad reminder of the end of the Quaker legacy to housing in Britain.

Not a complete end of course. Just as the Joseph Rowntree Foundation and Housing Trust have continued to go from strength to strength in the wake of Nestle’s takeover of Rowntree in the 1980s, so the Bournville Village Trust (BVT) will survive the £11.5bn deal to create a ‘global confectionary leader’. And there are still many local Quaker housing associations around the country. 

Or even the start of the process. That began long before the dastardly yanks appeared on the scene - although the trustees of BVT still appear to include two members of the Cadbury family, unlike the board of the company itself.

But it is a sad reminder of what seems like the old-fashioned Quaker belief in the welfare of the workforce as well as of the bottom line - and what seems like the very contemporary notion of building communities rather than just homes and factories that nevertheless began in the 19th century.

Could that idea ever have survived late 20th/early 21st century capitalism? It’s all reminiscent of another Quaker invention - Monopoly.

Not the modern game in which players compete to buy up all the property on the board and then bankrupt everyone else but the original version invented by an American Quaker called Lizzie Magie before it was repackaged by Parker Bros. 

It was originally called The Landlord’s Game and the whole point was to show how private renting, private land ownership and property speculation enrich landlords and impoverish tenants. 

A century on, whether you play the Atlantic City, London or Simpsons version of Monopoly, the chocolate factory has proved to be worth rather more than the water works and the electric company but the landlords and the takeover specialists are still proving Lizzie Magie’s point.

Not so sweet

Tue, 19 Jan 2010

What now looks like the inevitable takeover of Cadburys by the American food giant Kraft is another sad reminder of the end of the Quaker legacy to housing in Britain.

Not a complete end of course. Just as the Joseph Rowntree Foundation and Housing Trust have continued to go from strength to strength in the wake of Nestle’s takeover of Rowntree in the 1980s, so the Bournville Village Trust (BVT) will survive the £11.5bn deal to create a ‘global confectionary leader’. And there are still many local Quaker housing associations around the country. 

Or even the start of the process. That began long before the dastardly yanks appeared on the scene - although the trustees of BVT still appear to include two members of the Cadbury family, unlike the board of the company itself.

But it is a sad reminder of what seems like the old-fashioned Quaker belief in the welfare of the workforce as well as of the bottom line - and what seems like the very contemporary notion of building communities rather than just homes and factories that nevertheless began in the 19th century.

Could that idea ever have survived late 20th/early 21st century capitalism? It’s all reminiscent of another Quaker invention - Monopoly.

Not the modern game in which players compete to buy up all the property on the board and then bankrupt everyone else but the original version invented by an American Quaker called Lizzie Magie before it was repackaged by Parker Bros. 

It was originally called The Landlord’s Game and the whole point was to show how private renting, private land ownership and property speculation enrich landlords and impoverish tenants. 

A century on, whether you play the Atlantic City, London or Simpsons version of Monopoly, the chocolate factory has proved to be worth rather more than the water works and the electric company but the landlords and the takeover specialists are still proving Lizzie Magie’s point.

Complete control

Mon, 18 Jan 2010

The recovery in the housing market continues to be good news for house builders but not for house building, according to trading statements from the major companies.

Sharp reductions in debt and increases in forward sales and average selling prices were all features in the results for the six months to the end of December. Two of the biggest companies, Barratt and Taylor Wimpey, have cut their debt by a combined £1.5bn since December 2008. Forward sales were up 43% at Barratt, 28% at Taylor Wimpey and 40% at Persimmon.

But the emphasis is still firmly on controlling costs and improving margins rather than output. The increase in average selling prices is so far more the result of changes in the mix between flats and houses and between affordable and market homes than much underlying improvement.  

And completion of new homes are still falling. Barratt completed 5,028 homes in the six months (27% less than in 2008). Taylor Wimpey completed 10,186 homes in 2009 as a whole, which was down 24% on 2008. 

Given the extent to which house building depends on a few major companies, that does not bode well for the future and it makes the search for alternatives even more urgent.

Barratt chief executive Mark Clare said last week that he does not expect house building to recover to 2007 levels for another five to seven years. That makes a massive shortfall over the next decade between supply and demand from new households look inevitable.

Complete control

Mon, 18 Jan 2010

The recovery in the housing market continues to be good news for house builders but not for house building, according to trading statements from the major companies.

Sharp reductions in debt and increases in forward sales and average selling prices were all features in the results for the six months to the end of December. Two of the biggest companies, Barratt and Taylor Wimpey, have cut their debt by a combined £1.5bn since December 2008. Forward sales were up 43% at Barratt, 28% at Taylor Wimpey and 40% at Persimmon.

But the emphasis is still firmly on controlling costs and improving margins rather than output. The increase in average selling prices is so far more the result of changes in the mix between flats and houses and between affordable and market homes than much underlying improvement.  

And completion of new homes are still falling. Barratt completed 5,028 homes in the six months (27% less than in 2008). Taylor Wimpey completed 10,186 homes in 2009 as a whole, which was down 24% on 2008. 

Given the extent to which house building depends on a few major companies, that does not bode well for the future and it makes the search for alternatives even more urgent.

Barratt chief executive Mark Clare said last week that he does not expect house building to recover to 2007 levels for another five to seven years. That makes a massive shortfall over the next decade between supply and demand from new households look inevitable.

Mind the gap

Thu, 14 Jan 2010

Anyone who can get on the housing ladder has (almost) never had it so good, according to new lending figures out this morning. 

The Council of Mortgage Lenders (CML) says the debt burden for first-time buyers is the lowest for five years while home movers are enjoying the best conditions since 1996 and the second best since records began in 1974. 

Existing owners buying a new home typically needed just 10.6% of their gross income to cover their mortgage in November 2009, down from 11.1% in November. That compares with 10.2% in mid-1996 at the bottom of the 1990s slump in house prices.

First-time buyers needed 14.4% of their gross income, down from 15.1% in October and the lowest since May 2004.

The improvement is the result of the big fall in mortgage rates and a small improvement in incomes and came despite the fact that average house prices and mortgage advances have been rising since February. 

Overall lending was down slightly on October but up by two thirds on November 2008. 

Which sounds like great news if you can get on the housing ladder but not so good if you can’t. Some 19,300 first-time buyers got a loan in November compared to 11,900 a year ago and a low of 8,600 in January. 

However, that’s still half the number seen in early 2007. True, the fall is most marked in the riskiest sounding mortgages - interest-only with no repayment specified made up 22% of the market in mid-2007 but just 7% now - but it is also part a longer-term disappearance of first-timers since the early noughties, when more than 40-50,000 a month were getting on to the ladder.

Ultra-low interest rates may have bailed out existing home owners - though their debt burden will rise rapidly if rates increase - but with banks only willing to offer average 75% mortgages the market looks less accessible than ever for those locked out.

Mind the gap

Thu, 14 Jan 2010

Anyone who can get on the housing ladder has (almost) never had it so good, according to new lending figures out this morning. 

The Council of Mortgage Lenders (CML) says the debt burden for first-time buyers is the lowest for five years while home movers are enjoying the best conditions since 1996 and the second best since records began in 1974. 

Existing owners buying a new home typically needed just 10.6% of their gross income to cover their mortgage in November 2009, down from 11.1% in November. That compares with 10.2% in mid-1996 at the bottom of the 1990s slump in house prices.

First-time buyers needed 14.4% of their gross income, down from 15.1% in October and the lowest since May 2004.

The improvement is the result of the big fall in mortgage rates and a small improvement in incomes and came despite the fact that average house prices and mortgage advances have been rising since February. 

Overall lending was down slightly on October but up by two thirds on November 2008. 

Which sounds like great news if you can get on the housing ladder but not so good if you can’t. Some 19,300 first-time buyers got a loan in November compared to 11,900 a year ago and a low of 8,600 in January. 

However, that’s still half the number seen in early 2007. True, the fall is most marked in the riskiest sounding mortgages - interest-only with no repayment specified made up 22% of the market in mid-2007 but just 7% now - but it is also part a longer-term disappearance of first-timers since the early noughties, when more than 40-50,000 a month were getting on to the ladder.

Ultra-low interest rates may have bailed out existing home owners - though their debt burden will rise rapidly if rates increase - but with banks only willing to offer average 75% mortgages the market looks less accessible than ever for those locked out.

Getting involved

Wed, 13 Jan 2010

Where does engagement stop and empowerment begin?

That’s the question raised this week by the National Housing Federation (NHF) in its response to the consultation by the Tenant Services Authority (TSA) on its new regulatory framework for social housing in England. 

But it’s related to the deeper question underlying current attempts to redesign public services by putting citizens first and the even bigger one of how to revitalise democracy itself.  Whether you call it localism, co-production or citizen empowerment, all the main parties are at it but none of them are very clear about what they actually mean by those fashionable buzzwords.

As for the NHF, it says it is ‘strongly supportive of engaging residents in decisions affecting the management of their homes’ but adds that it is ‘confused by the references to “empowerment‟ and the directions issued by the government in this regard. We are unclear about which powers the TSA will be rely upon to impose a standard relating to empowerment since we cannot find any specific reference to this in the legislation. It would be helpful if this point could be clarified.’ That sounds like a worrying lack of clarity given that we are already well into the consultation. 

The TSA says its tenant involvement and empowerment standard will apply to all registered providers and require three outcomes: customer service and choice; involvement and empowerment; and responding to complaints. The requirement on involvement and empowerment says that ‘registered providers will offer all tenants opportunities to be involved in the management of their housing’ and that this must include opportunities to ‘influence housing-related policies and how housing-related services are delivered’ and to ‘be involved in scrutinising performance in delivering housing-related services’.

None of that seems controversial and many social landlords are already doing much of that - whether it’s at the top with landlords whose board is one third tenants or at the bottom with small supported housing groups that involve residents in decision-making. For others, particularly the larger landlords with complex group structures and business models, it’s far more difficult. 

The NHF’s objection, as in many other areas recently, seems to be to being told what to do when that was not specifically laid down in the legislation. But if the limits of engagement are left up to individual landlords that sounds like the opposite of empowerment. 

Which is a shame because if there is one public service in which engagement and empowerment ought to work it is housing. Compare it to, say, education and health and the difference is that the people who use the services have a constant and lasting connection to the organisation that delivers them. And, as Hyde Housing argues in a report out this week, the most involved tenants or ‘heartlanders’ play a crucial role in bonding their communities together. 

The debate about empowerment also raises the issue of the future of the TSA itself. If there is one thing that really defines the difference between the new organisation and the old Corpie (apart from that camper van) it is precisely the emphasis on tenant involvement. But the extensive consultation that has gone into it has left the regulator vulnerable to Conservative criticism about how long the process has taken. The new framework is due to take effect in April - just weeks before the likely date of the general election. 

Getting involved

Wed, 13 Jan 2010

Where does engagement stop and empowerment begin?

That’s the question raised this week by the National Housing Federation (NHF) in its response to the consultation by the Tenant Services Authority (TSA) on its new regulatory framework for social housing in England. 

But it’s related to the deeper question underlying current attempts to redesign public services by putting citizens first and the even bigger one of how to revitalise democracy itself.  Whether you call it localism, co-production or citizen empowerment, all the main parties are at it but none of them are very clear about what they actually mean by those fashionable buzzwords.

As for the NHF, it says it is ‘strongly supportive of engaging residents in decisions affecting the management of their homes’ but adds that it is ‘confused by the references to “empowerment‟ and the directions issued by the government in this regard. We are unclear about which powers the TSA will be rely upon to impose a standard relating to empowerment since we cannot find any specific reference to this in the legislation. It would be helpful if this point could be clarified.’ That sounds like a worrying lack of clarity given that we are already well into the consultation. 

The TSA says its tenant involvement and empowerment standard will apply to all registered providers and require three outcomes: customer service and choice; involvement and empowerment; and responding to complaints. The requirement on involvement and empowerment says that ‘registered providers will offer all tenants opportunities to be involved in the management of their housing’ and that this must include opportunities to ‘influence housing-related policies and how housing-related services are delivered’ and to ‘be involved in scrutinising performance in delivering housing-related services’.

None of that seems controversial and many social landlords are already doing much of that - whether it’s at the top with landlords whose board is one third tenants or at the bottom with small supported housing groups that involve residents in decision-making. For others, particularly the larger landlords with complex group structures and business models, it’s far more difficult. 

The NHF’s objection, as in many other areas recently, seems to be to being told what to do when that was not specifically laid down in the legislation. But if the limits of engagement are left up to individual landlords that sounds like the opposite of empowerment. 

Which is a shame because if there is one public service in which engagement and empowerment ought to work it is housing. Compare it to, say, education and health and the difference is that the people who use the services have a constant and lasting connection to the organisation that delivers them. And, as Hyde Housing argues in a report out this week, the most involved tenants or ‘heartlanders’ play a crucial role in bonding their communities together. 

The debate about empowerment also raises the issue of the future of the TSA itself. If there is one thing that really defines the difference between the new organisation and the old Corpie (apart from that camper van) it is precisely the emphasis on tenant involvement. But the extensive consultation that has gone into it has left the regulator vulnerable to Conservative criticism about how long the process has taken. The new framework is due to take effect in April - just weeks before the likely date of the general election. 

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