All posts from: April 2010
Any first-time buyer still celebrating the stamp duty holiday look away now: house price inflation is back in double figures for the first time in three years.
Figures from the Nationwide this morning show that prices rose 10.5% in the year to April to reach an average of £167,802.
The holiday announced in the Budget in early March means first-time buyers do not have to pay 1% stamp duty on homes worth between £125,000 and £250,000. That means any first-time buyer about to buy that that average house would save £1,678.
It sounds a small but handy boost to affordability until you stop to consider this: the average house price has risen by £6,482 or almost four times the stamp duty saving since the Budget.
The Nationwide detects some evidence that house price inflation will slow down soon. Prices over the last three months are up 1.1% on the previous three months, down from 1.5% last month. And surveys show supply is now rising faster than demand.
It also points out that affordability has actually improved over the course of the last parliament. House prices rose 6.7% between May 2005 and April 2010 whereas consumer price inflation rose 13.5%.
But none of that, or the fact that prices are still 10% below their 2007 peak, will be much compensation to any potential first-time buyers out there. With prices back over five times average earnings, getting into the market remains a distant dream.
If we are in for the deepest cuts in public spending since 1976-1980, where on earth does that leave housing as the spending programme that suffered the most at the time?
Yesterday’s warning by the Institute for Fiscal Studies (IFS) that the three main parties are not coming clean about the scale of the spending cuts and tax rises required to bring down the deficit after the election dominates today’s papers. The think-tank looks at the gap between the cuts and rises announced by the parties so far and those required to meet their deficit reduction targets.
The worst since 1976-80 warning applies to Labour and the Lib Dems whereas the Conservative plans ‘imply cuts to spending on public services that have not been delivered over any five-year period since the Second World War’.
That ups the ante considerably on the IFS’s previous warning that programmes like housing and transport would need to be cut by 18% in real terms to protect spending on areas such as health.
Because that looks mild by comparison with the cuts that followed the IMF crisis of 1975. Actual public spending figures are hard to come by but the effect can be seen in the housing starts figures for the period.
According to the UK Housing Review, social housing starts fell by 68% over the next five years. Local authorities, new towns and housing associations started a total of 174,000 homes in Britain in 1975 but just 56,000 in 1980. Council housing bore the brunt of the cuts but starts fell everywhere - and in the private sector too because there had been an eerily familiar crisis in the housing market and financial system in 1974.
That makes existing forecasts, like those published by the Construction Products Association yesterday, look over-optimistic. The CPA assumes that cuts will take time to feed through and that social starts will fall from 26,000 in England this year to 23,000 by 2014.
Looking for positives in the comparison with 1976-1980, at least we are starting from a lower base this time around. Local authorities accounted for 76% of social housing starts in 1975, whereas housing associations account for 98% now and raise half their funding in private finance. A recovery in the housing market could lead to more contributions from section 106 or whatever replaces it.
The late 1970s also look even worse in retrospect because they were followed by the 1980s, a decade that saw social housing starts slump by another 50%. Housing bore three-quarters of the cuts in public spending in Margaret Thatcher’s first term between 1979 and 1983.
The period also saw the big shift from bricks and mortar to personal subsidies and the start of the big sell-off of homes under the right to buy. Neither of those can happen again, which just might be another positive.
Because a convincing case can be made that cuts in housing will lead to extra costs and lower taxes elsewhere. Every affordable home not built means a higher housing benefit bill for a family housed in the private rented sector and lower taxes from the builders not working on it. And, as the National Housing Federation (NHF) warned yesterday, increased overcrowding and homelessness means extra costs and pressure for other public services.
So could the battle be about housing benefit as well as housing investment? The IFS concludes that the parties plans for spending cuts simply to not add up. ‘Whoever forms the next government, that points to greater reliance on tax increases and welfare cuts after the election than the parties are willing to admit to beforehand.’
Today’s return to profitability at Lloyds Banking Group is not just big news for shareholders and the government but for housing too.
The news sent Lloyds shares up sharply and briefly above the price paid under the bailout that saw the government take a 41% stake in 2008. That’s good news for Gordon Brown ahead of the prime ministerial debate on the economy on Thursday since it increases the chances of the government making a profit on its stakes in Lloyds and Royal Bank of Scotland.
But what happens to Lloyds will also have a huge impact on housing: not just the housing market, but the private rented sector, social housing and housebuilding too. HBOS was already the biggest mortgage lender when it was forced to merge with Lloyds. The group was also the biggest lender to housing associations in general and on shared ownership in particular. It was one of the biggest lenders to buy-to-let landlords. And on top of that, it still holds major stakes in five of the top 20 housebuilders.
For the moment, Lloyds seems focussed on increasing the margins on its business - the gap between the interest rates it charges borrowers and pays savers - but in the longer term the return to the black should improve mortgage availability. Home loans in the market as a whole remain in short supply, according to today’s figures from the British Bankers Association (BBA).
It must improve the long-term prospects for shared ownership too - or at least it should once whoever forms the next government has sorted out their priorities.
In the meantime, and in an improving housing market, Lloyds seems focussed on improving its financial position by selling off its assets. Two stories in the financial pages this week show the potential impact that could have.
Yesterday, the FT reported that the bank had decided to sell the failed buy-to-let business built up by Grant Bovey (Mr Anthea Turner). Two separate sales will see a portfolio of more than 750 homes go on the market.
Over the weekend, various papers reported that a deal could be in the offing for housebuilder Crest Nicholson. HBOS took a stake in the firm during the boom but in the wake of the bust Lloyds led a consortium of lenders that wrote off its debt and took control.
We’ve opened the identical sealed boxes and read the manifestos - now it’s time to play Deal or No Deal.
The New Deal offered to local authorities seems fairly straightforward: reform of the housing revenue account to allow them to build 10,000 homes a year by the end of the next parliament in return for committing their own land an resources to housing development. A box containing a change in the public borrowing rules would be make it an easy choice but even without it it looks like a Deal.
The same goes for those on offer to new mutual and co-operative forms of housing. It’s not clear how much real encouragement is on offer but it still looks like a Deal.
But the choice is much less clear-cut for housing associations. It’s worth quoting in full: ‘We believe that housing associations can do more to ensure the supply of new affordable homes and make better use of their resources and assets to do so. We want to develop with the sector a new settlement. Labour will pledge to continue to give affordable housing a high priority and will take further steps to guarantee the independence of housing associations from government. In return, we want to see the sector use its assets and development capacities more efficiently to deliver more homes with lower grant rates.’
So, sweat your assets and build at lower grant rates. In return we aren’t making any promises about the future new homes budget (you’ll have to trust us to ‘give affordable housing a high priority’) and we’ll talk about guaranteeing the independence that you thought you already had.
A big part of Labour’s case is its achievement in continuing to invest through the recession alongside its extra help for homeowners facing repossession. Cuts may be on the way, the argument goes, but things will be far worse under the Conservatives.
But the choice is not just about what happens to the housing programme - it’s also about what happens within it. In a paper published on Friday, 20 leading housing associations made clear their preference for shared ownership, arguing that it delivers more ‘bang for a buck’ than either shared equity or social renting (as well as more staircasing receipts for them).
The Labour housing manifesto also pledges to refocus the low-cost homeownership programme to build more rent-to-buy homes aimed at families on lower incomes and says that Labour is the only party committed to Homebuy Direct.
The Conservative manifesto was not exactly explicit about future housing investment beyond vague promises to ‘deliver more affordable homes’ and ‘make it easier for everyone to get onto the housing ladder’. Perhaps one guide might be what happened in London when Boris Johnson took over as mayor: in addition to dropping Ken Livingstone’s affordable housing targets he also signalled a greater emphasis on homeownership schemes and an intention to take them up the income scale.
In contrast, the Lib Dems detailed cuts of £250m a year in the Homebuy programme in their manifesto, which sounds like they would shift the balance of the programme towards renting.
Whatever happens on May 6, it seems cuts are on the way and housing associations will have to make their assets work harder. But there are lots more boxes to open as we all play Deal or No Deal.
I thought I’d been transported back in time when I saw the Conservative ‘housing tax bombshell’ attack on the Lib Dems.
The attack was first deployed in a low-key way last week after the Lib Dem manifesto proposed equalising the rate of VAT between new build and repair and maintenance. The Conservatives argued that would add up to £14,000 to the cost of a new home (7% of the average £200,000 price).
But after yesterday’s launch of the Scottish Liberal Democrat manifesto, it’s been turned into a full-scale poster campaign by the Scottish Conservatives. The poster is a total throwback to the 1992 election campaign.
The Scottish Tories seem to believe that the VAT attack will work better than criticism of Lib Dem policies on Europe, defence and immigration. As shadow Scottish secretary David Mundell put it: ‘Like so many Lib Dem policies the closer you look at them, the less they stand up to scrutiny. VAT on new homes would hit house buyers and the building industry hard. Scrapping Trident would mean 11,000 job losses, going into the Euro would be against Britain’s best interests and the illegal immigrant amnesty would put real pressure on public services.’
The Scottish Tories are backed by Homes for Scotland, the Home Builders Federation and a range of construction companies north of the border. Their problem is that one half of the Lib Dem policy - cutting VAT on repair and maintenance - has for years been one of the key demands of any number of different construction lobbying groups.
It’s the other half - paying for it - that they don’t like. That’s basically why they have never managed to convince the Treasury.
The housebuilders argue that imposing VAT on new build now could help damage the recovery - though based on the bonuses they have been awarding their chief executives recently and the interim management statement today from Persimmon today showing a 20% increase in sales revenue that recovery is already well underway.
Another practical difficulty that would have to be sorted out would be the impact on new build plans by housing associations, almos and local authorities, which would face different problems according to their own VAT status.
However, the benefits of equalising VAT rates more than outweigh those problems. Regeneration, energy efficiency work on existing homes and bringing empty homes back into use would all cost less. The environmental choice between refurbishing existing homes and building new ones and greenfield and brownfield sites would no longer be distorted by tax. And a lower rate of VAT on repair and maintenance might even produce more revenue than expected if it encouraged householders to pay builders legitimately rather than cash in hand.
That said, the tax bombshell idea may be almost 20 years old - but back in 1992 it worked.
Two weeks to go and here are the latest party standings: Labour 31%, Greens 30%, Liberal Democrats 24%, Conservatives 15%.
Before you start wondering what happened to Cleggmania and the Big Society, I should add that it’s not a proper opinion poll. Instead it’s the parties’ percentage share of candidates who have signed up to the National Housing Federation’s affordable housing pledge.
Some 247 would-be MPs have signed up so far - 76 Labour, 74 Green, 59 Lib Dems and 37 Conservatives - and there is still time for more to follow suit. The results also only apply to England.
However, with 2,225 declared candidates in English constituencies this time last month, that still leaves a huge number of don’t agrees, don’t knows or don’t cares.
Candidates were asked to agree with the statement: ‘I pledge to back the building of more affordable homes and to work towards all constituents having access to decent, affordable housing in safe and sustainable communities.’
That might imply too much support for additional public spending for some. The request might have got lost in a tsunami of emails and a pile of post. Or it might just be one lobbying request too many.
However, it’s certainly noticeable from the map on the NHF website that the candidates who have signed up tend to come from the major urban centres - where support for more affordable housing is relatively uncontroversial.
Support in rural areas seems much more patchy. Only 11 candidates have signed up in the whole of the South West, for example, despite the fact that the region has the biggest disparities in the country between house prices and incomes and would seem to need more affordable housing more than anywhere else.
So could fear of the nimby vote be a factor? I hope not but the fact that there are only three signatories in the whole of Kent, Surrey, Sussex and Hampshire would seem to suggest that it is.
Are rising prices a good thing or a bad thing? Ask a housing association or a politician.
The inflation figures out today show that retail price inflation (RPI) rose to 4.4% in March. If it keeps up at that level, workers will see a pay increase of anything less than that as a pay cut and it will increase the pain of the public sector pay squeeze being proposed by all the major parties.
However, associations will need little reminding that the rate just six months ago was -1.4%, enough to trigger a 0.9% rent cut for tenants from this month under the RPI plus 0.5% formula.
Ironically, the main reason for the rise - accounting for half of the increase in the rate since February - was housing costs. Mortgage payments and house prices were both falling a year ago but now the recovery is pushing them up.
And how about those house prices? The prize for one of the most entertaining question and answer sessions of the election so far goes to the BBC’s home affairs editor Mark Easton.
In a package you can see on his blog he arms himself with arrows pointing up and down and asks John Healey, Grant Shapps and Sarah Teather whether they would rather see house prices rise or fall.
Which one will it be? The non-answers come out quicker than you can say Jeremy Paxman while Easton looks at the issues facing people wanting housing in Bournemouth.
‘If asked, voters often say they just want politicians to be honest and straight with them,’ says Easton. ‘When it comes to housing, politicians think it better to dodge the question and keep their heads down.’
Today’s joint plea by the National Housing Federation (NHF) and Home Builders Federation (HBF) is another stark reminder of the dangers facing the affordable housing budget after May 6.
Whoever wins the election looks certain to impose cuts but the question is whether they will be damaging, devastating or downright disastrous.
The starting point is the 25% cuts implied in the Budget. Extrapolating that across the next decade produces a deluge of depressing statistics including 574,000 planned affordable homes not built, 287,000 jobs lost and 1.4m people added to waiting lists.
The two organisations make a powerful case about the effects of housing cuts on health and education and on first-time buyers and the housing market. That sounds good politics since, judging from last week’s prime ministerial debate on domestic policy, they are all issues that carry more weight than affordable housing itself with the major parties.
They could add that any cuts will not deliver anything like the savings that the politicians imagine. All those homes not built and jobs lost mean tax lost to the Treasury and extra unemployment benefit costs for the Department for Work and Pensions. They would also mean years of higher housing benefit for all those extra people on the waiting list.
Just look at what happened the last time a new government imposed draconian cuts on housing. Labour took power in 1997 committed to sticking to Conservative spending plans that included eye-watering cuts in the housing budget in its first two years.
The Housing Corporation approved development programme fell from £1.1bn in 1996/97 to £702m in 1997/98 and £621m in 1998/99. The total cut was 42%. Spending recovered slowly after that but did not go back to the level of 1996/97 for another five years when Labour finally realised the importance of new homes.
Few people would now dispute that those cuts were a serious mistake. They may have delivered an immediate political dividend and boosted Labour’s reputation for prudence but in the longer term they helped to fuel the housing shortage and house price boom and left Labour open to the attack that it built fewer affordable homes than the Conservatives.
This time around, much of the housing budget for 2010/11 has already been brought forward and the crucial decision will be what happens from 2011 onwards. So far only the Lib Dems have spelt out what they will do in any detail. They have said they would cut Homebuy by £250m in 2010/11 and similar amounts in the next four years - implying that the rented programme would be protected alongside its £1.2bn programme to bring empty homes back into use.
Accepting that cuts are inevitable is by no means the same as accepting that they have to be as damaging as the NHF and HBF are warning.
Away from the carefully managed campaigns of the major parties, this election is throwing up some startlingly different visions for Britain in general and housing in particular, some of them eminently sensible, some downright bonkers.
Two of the major ‘minor’ parties, UKIP and the Greens, have launched two very different manifestos. They are both promising more investment but the Greens ‘reject the use of immigration to mask problems such as lack of high quality social housing’ while UKIP sees cuts in immigration as the problem.
The Green manifesto launched today pledges £2bn in 2010 rising to £4bn in 2011 for social housing. The expansion would be ‘mainly through renovation’ and would create 80,000 jobs.
The party would invest the same amount and create as many jobs again through a programme of free home insulation for anyone who needs it, with priority for pensioners. Tax incentives would be increased through the rent a room scheme to encourage better use of the existing stock.
Other eye-catching policies include the end of the right to buy the introduction of a new right to rent for people with mortgage problems. Local authority duties to homeless families would be extended to single homeless people and intentional homelessness would be abolished.
Tenants would benefit from a new minimum wage set at 60% of net national average earnings (£8.10 an hour), which would in turn cut the bill for tax credits and housing and council tax benefit. So far, so sensible, and the UKIP manifesto starts out that way.
The whole point of the party is to withdraw from the European Union and £1.5bn of the savings from that would be invested in new social housing and ‘demolishing poor quality houses especially failed tower blocks and low quality buildings’.
Sad to say though, especially since the longer version of its housing policy quotes my blog, the voices from the saloon bar of the Red Lion are soon making themselves heard. UKIP will:‘cut housing quangos down to size including the Housing Corporation and the Tenants Authority Board’ [sic]. give ‘more rights to Landlords to clear out illegal squats as soon as possible’. hold ‘direct binding Referenda on all major housing schemes and economic developments such as supermarkets, housing developments of more than 50 homes and other major building projects’. scrap ‘hidden development taxes such as Section 106 ‘community bribes’ and requirements for social housing in bigger developments’. reduce housing demand and help to stabilise the market by imposing a five-year moratorium on immigration’introduce “Ellis Island” reception centres for immigrants so freeing up more accommodation for local people’.
Housing associations are in the party’s sights too. ‘UKIP finds the recent fashion for HAs to merge worrying for it distances the relationship between housing providers and their local communities. Profit becomes the prime motive. Rents increase. Service, management and repairs suffer.
UKIP wants to reverse this trend by ensuring the survival of smaller housing providers at the local level.’UKIP believes that local communities should be given the choice for social housing to remain in public ownership and shall thus encourage the so-called ‘Fourth Option’.
This creates the financial environment for councils to retain ownership of their housing stock or be able to compete effectively alongside other housing providers.’But in case that starts to sound attractive to workshy tenants who got pregnant to get their home, there are also proposals on the welfare state and ‘reinvigorating sink estates’. Here the size of the type increases along with the volume from the voices in the Red Lion. UKIP wants to tackle the poverty trap by reducing the effects of means-testing and the way that benefits interact.
‘This is not only a huge disincentive for social tenants to seek low paid work. It is also a significant disincentive for ‘the better off poor’ to leave social housing for the privately rented sector of owner-occupation. ‘Under its plan social rents would be ‘set at a single inclusive figure (rent plus Council Tax, net of notional Council Tax and Housing Benefit) calculated at around 20 per cent of each household’s gross income’.
UKIP says this would not only boost work incentives but encourage better-off families into private renting because once they reach a certain level of income rents will be cheaper. But anyone tempted to skive on housing benefit instead had better watch out. ‘Housing Benefit and Council Tax Benefit for private tenants will be phased out and replaced with ‘Workfare’ jobs.
These Workfare job schemes will be administered by local councils to ensure that those who would otherwise not be able to find work can still cover their rent and Council Tax. In addition, these private tenants will be contributing something of value to the local community.’
Today’s Liberal Democrat manifesto is about as full of housing goodies as it can be - though there is at least one nasty surprise for the sector too. Some of the products on offer will be familiar.
Cheap loans and grants would bring 250,000 empty homes back into use at a cost of £1.2bn in 2010/11. A mansion tax of 1% on homes worth more than £2m (a higher threshold than when it was first announced) would raise £1.7bn a year.
Others come with tempting offers for the future. On the key question of investment, the Lib Dems say: ‘Over time, we will seek to provide a greater degree of subsidy as resources allow to increase the number of new sustainable homes being built.’
It’s not exactly a cast-iron pledge but it’s further than Labour or the Conservatives seemed prepared to go. Still more are desirable products that are impossible to find at the stores of the other parties. The party pledges to equalise VAT on repair and maintenance and new build, a key demand of the housing and construction sectors for years.
It also says it will ‘investigate reforming public sector borrowing requirements to free councils to borrow money against their assets in order to build a new generation of council homes, and allow them to keep all the revenue from these new homes’.
As I argued on Monday, this was a key thing missing from the Labour manifesto. On second homes - a key concern in Lib Dem seats in the South West - the party promises new powers for local authorities to set higher council tax, and the option to require planning permission for new ones.
Meanwhile policy on capital gains tax would ensure that speculative gains on second homes would be taxed at the same rate as earned income rather than the current 18%.
So far, so good though the party also promises ‘honesty about the tough choices needed to cut the deficit’ and that means there will be some less palatable things at the checkout too.
Like the other parties, the Lib Dems will target public sector pay. There will be a £400 pay rise cap ‘initially for two years’ for all public sector workers to save £1.7bn in 2011/12 and £3.5bn a year in subsequent years.
Housing associations will not be keen on one of the other Lib Dem cuts. The Homebuy programme would be scaled back by £250m in 2010/11, with the saving rising to £270m by 2014/15.
There will be concern too about the Lib Dems’ policy on planning. The manifesto pledges to abolish the Infrastructure Planning Commission and return decision-making, including housing targets, to local people’.
It does not spell out exactly how that would work but the housing section of the Lib Dem website says: ‘We will scrap the ‘Westminster knows best’ regional house-building targets by allowing local authorities to determine how many and what type of homes are needed in their area.’
The party would also hold community land auctions to bring forward sites for new development. Politically that should help Lib Dem candidates compete with the Conservatives in a swathe of seats in the south and midlands of England.
Practically though what’s to stop it becoming even more of a charter for nimbys than the Tories are offering - and without the council tax incentives to approve more homes?
Well there it is in the Conservative manifesto in black and white: ‘we will respect the tenures and rents of social housing tenants’. The Tories are working very hard to shake off the accusation that they will introduce Localis-style deregulation in social housing if they win the election.
Grant Shapps complained last week about Labour ‘spreading unfounded and baseless statements about David Cameron, myself and Conservative policies on social tenure and rents’ and said his party had no plans to change security of tenure for current or future tenants or raise rents to market levels.
In February, Labour’s Two Nations also promised to ‘protect and respect the rights of social tenants’. There is still some wiggle room there - the manifesto does not actually spell out that they mean future as well as current tenants - but it will now be much harder for the Conservatives to do anything that smacks of deregulation without being accused of breaking a manifesto commitment.
Elsewhere, the manifesto goes over some familiar territory such as equity stakes for ‘good social tenants’, a pilot of a new right to move scheme, local housing trusts and scrapping planning targets for new homes and replacing them with local incentives.
There is also a very vague promise that ‘we will make it easier for everyone to get onto the housing ladder’.
However, while ‘deliver more affordable homes’ is one of three key pledges flowing from the party’s commitments to ‘make politics more local’, there is no mention of investment.
So much rests on the leap of faith involved in believing that local communities will use localism to approve more homes rather than as a charter for nimbyism. As in the earlier housing green paper, Strong Foundations, it’s notable that the Conservatives have dropped some touchstone policies of the past, including the extension of the right to buy to housing association tenants and restoration of right to buy discounts. There’s also what I think is a new commitment on homelessness - not just to more accurate street counts but to ensuring that ‘a minister in each relevant department has homelessness in their brief’.
All in all, the manifesto seems determined to avoid any ‘nasty party’ connotations on housing policy. In which case someone might like to have a word with Iain Duncan Smith. Why was the ex-Tory leader and possible future minister for fixing ‘broken Britain’ telling Inside Housing only last month that he ‘wouldn’t be surprised’ if a victorious Conservative government scrapped security of tenure?
Why give such a prominent role to someone whose think-tank argued that ‘the law must be changed so that councils and housing associations are free to let social homes on whatever terms they judge most appropriate to meet the particular needs of incoming tenants’ if you have no plans to do so? And what are the implications for housing and tenants of ‘a welfare system that is fair but firm’?
Labour’s manifesto pledge to build 10,000 new council homes a year by the end of the next parliament is a bit like a jigsaw with a missing piece.
It marks a break with the no fourth option orthodoxy of the last 13 years but not yet a complete one.Flash back to the run-up to the 1997 election and John Prescott was arguing for a new deal for council housing featuring a change in the public borrowing rules.
The proposal was squashed by Labour’s Treasury team because anything so bold risked damaging the party’s prudent reputation. The man in charge of that team? Gordon Brown.
Promising new council homes without changing the rules is like completing a jigsaw only to find a key piece missing from the box. Free to raise private finance, councils could make the same funding go much further. If the rules are not going to be changed, wouldn’t giving the funding to housing associations produce more homes?
An election campaign in which the level of public borrowing is such a big issue might not seem like the best time to expect movement– but the signs are that the Lib Dems will pledge to change the rules when they launch their manifesto on Wednesday.
In his interview this week with Inside Housing Brown tells housing associations: ‘We would like to see the sector use its assets and development capacities more efficiently.’Why not give local authorities the chance to do exactly the same?
Is it too much to hope that this is exactly what will happen, that Labour’s upcoming mini-manifesto on housing or the new commission on council housing will find that missing piece?
Or that, if Labour wins the election, ministers will finally slot it into place?
Both seem based on ideas pitched somewhere in between the two main alternatives. Both are attractive to most people even if they’re not sure what exactly they stand for. And both constantly seem like their time has come without ever actually arriving.
The Liberal Democrats will be hoping that they can change all that in the election campaign. And the Chartered Institute of Housing and London & Quadrant chose the day the election was called to launch a new initiative designed to do the same for intermediate renting.
A discussion paper looks at a housing landscape in which home ownership is expected to continue to shrink and demand for renting will grow - especially among inbetween households earning £12,000 to £25,000.
But where will the growth come from? The potential for growth in buy to let looks limited and in any case it just leads to competition for existing stock. Institutional investment in private renting could be stymied by low returns.
So why not housing associations? As they emerge from the shock of the housing market (and shared ownership) crash, can they develop alternatives?
The discussion paper sees a future in two types of product: discounted market rents and longer-term tenancies. Both could be options for people who earn too little to make shared ownership work but they also need to stack up financially for associations over the long term.
A key (and controversial) aspect of that would be ‘the trade off between security of tenure and ability to churn assets to produce the required overall return’.
But ‘if it is possible to develop more variation and flexibility in the forms of, and rents charged for, tenancies available, then it would be possible to begin to develop a more fluid and dynamic affordable rented sector - rather than a sector principally focused on social housing’.
The prize would be ‘a more flexible system which better meets the needs of households’ and allows easier moves between the social, intermediate and private rented sectors.
Put that way it sounds less like something midway between the existing options and more like a radical alternative to the existing system - much as the Lib Dems are fond of describing themselves.
Can it ever work? In housing as in politics it’s an uphill struggle to win support for new alternatives. Anything involving security of tenure will make it doubly difficult to win support and trust.
But, who knows, if we get a hung parliament we could even have a Lib Dem housing minister in a month’s time.
The interviews, campaign speeches and baby kissing are in full swing but back in Westminster there’s still some unfinished business.
Some things we already knew would thud into the in-tray of the next housing minister: implementation of housing revenue account (HRA) reform and regulation of the private rented sector are two obvious examples; and negotiations over the next spending review will loom large on the horizon.
Plans to give more powers over housing to the Welsh Assembly look like being a casualty of the election too. According to BBC news, the Conservatives will block the legislative competence order going through the Westminster parliament because they object to plans to suspend the right to buy and to allow traveller sites contrary to local decisions.
All of those issues and more will feature in written answers today and yesterday, with some MPs taking a last chance to raise issues before they stand down and others setting down markers for the next parliament. Among the last-minute things we learned: new use class orders for houses in multiple occupation are expected to generate an extra 8,500 planning applications a year. Those powers made it through just before Easter.
There was still time for some last-minute announcements from Communities and Local Government.
Yesterday John Healey £146m of housing and planning delivery grant - something the Tories say they will scrap. On Easter Monday he gave a special planning power to parish councils to build new affordable homes.
That ‘boost for rural communities’ was just as well, since the government has since been forced to drop Budget plans to scrap tax relief on holiday homes - depending on your point of view, an attack on tourism or the closing of a loophole for second home owners.
All of which leaves a big pile of unfinished business for the next parliament. Who will be taking the decisions and voting on them? The election result is uncertain - it’s conceivable that the next housing minister could be Labour, Conservative or even Lib Dem - but it does look certain that the next parliament will include more new MPs than any for the last 65 years.
And they’re off…it would be great to think that housing will play a big role in this election campaign, even better to think that all parties will follow through with commitments to housing.
As I’ve argued before, there are enough different issues knocking around to make housing more prominent in this election than for many years. Whether it’s the BNP in Barking, the future of council estates in Hammersmith or planning for new homes in the south and Midlands there will be no shortage of passionate argument.
The connection between those issues may be obvious to anyone who works in housing but they seem unlikely to be made by the electorate or the politicians. And housing is far more likely to appear in local campaign leaflets than on national campaign platforms.
The website The Straight Choice is steadily building up a database of those leaflets for both the Westminster and council elections. Already there are some fascinating insights into which housing issues the politicians think should be resonating on the doorsteps.
For Andrew Smith (Labour, Oxford East), it’s action on bad landlords and the new clampdown on homes in multiple occupation. Could that late move by the government be enough to hold on to seats in university towns like Oxford?
For Nicholas Soames (Conservative, Mid-Sussex) it’s what Gordon Brown has got planned for his constituency: 17,000 new homes. In seats like his, the Tories’ pledge to scrap regional planning targets and give more say to local people could be a vote winner.
That would be bad news for the Liberal Democrats in seats in the south where it’s a straight fight between them and the Tories, so it’s no surprise to find that the message from candidates like Richard Burt (West Worcestershire) features a pledge about ‘protecting our towns and villages’. The same goes for Labour too.
In Liverpool Wavertree, meanwhile, Labour candidate Luciana Berger is making hay with the Lib Dem council’s refusal of funding to build new council houses.
And in Salford & Eccles BNP candidate Tina Wingfield (a former housing officer) is using housing as a key weapon in her fight to unseat former communities secretary Hazel Blears.
So housing will be there wherever you look in this election - even if some of the messages are more palatable than others. Whether that will translate into the sort of ‘long term vision for housing’ demanded by the Chartered Institute of Housing remains to be seen.
April Fool’s Day and as usual I’m struggling to separate fact from fiction.
It’s bad enough in a normal year, when I have been known to quote Fools as real months after the event, but this year I’m struggling more than usual.
It started off with the Colossus of Stratford. Surely this has to be a Fool, I told myself, but apparently not.
But by the time I’d listened to the radio and waded through the nationals - Labour’s new Gordon ‘hard man’ Brown ads, a suspcious-looking story about ferrets delivering broadband, AA men with jetpacks and Shakespeare is French - I was beginning to wonder if everything else is an April Fool today. And devoutly hoping that one story in particular is not true.
So when I turned to my Inside Housing - online, of course since post before lunchtime is another April Fool these days - I was at my most sceptical.
Welwyn Hatfield, constiunency of Grant Shapps, is one of the five councils that will have to take on an extra £1.6bn of housing revenue account debt? Pull the other one.
Tenants in Bristol putting their heating and hot water meters in the fridge to slow them down? You don’t get me that easily.
So I turned with relief to the Tenant Services Authority. Surely I must be on firm ground with an organisation that launches its new regulatory framework on 1 April?
Because this new hot-desking project that will see the TSA workforce move in with the Homes and Communities Agency sounds like a great idea. Certainly a lot better than the permanent hot-desking that the Conservatives have in mind after the election.
But then I realised my mistake. TSA and HCA staff working together in one office? Maybe even in a joint organisation? That’s so ridiculous it has to be an April Fool.