Jules Birch
Freelance journalist writing about housing and social policy since 1992. For more possibly interesting stuff I'm on twitter @jules_birch
Recent activity
Blog Posts (536)
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QE for housing
The Bank of England seems set to announce another round of quantitative easing on Thursday. Is it time to consider an alternative?
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Small mercies
Yesterday’s events in the House of Commons have left me looking for some good news among the bad.
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Taking the strain
Today is the 21st anniversary of perhaps the most significant statement in the recent history of housing.
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Dunce’s cap
If history repeats itself, first as tragedy and then as farce, then the politicians seem intent on doing both at the same time with the benefit cap.
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Winners and losers
Who has most to celebrate from last night’s defeat for the government on welfare reform?
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Comments (29)
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Comment on: QE for housing
Thanks for the comment F451. I think what you're missing here is that another round of QE is going to happen anyway - probably this morning - so the first question is whether there is an alternative to something that in housing terms inflates house prices and rents.
QE is not borrowing in a conventional sense so as I see it there is no reason why this should turn into a PFI-style debt monster. It's a way of creating liquidity - and in this case new homes - that would otherwise not exist.
This QE would be underwritten by the Treasury in the same way as conventional QE already is. When the time comes to unwind it, the Bank's bonds would be repaid from proceeds on the sale of the homes. However, the Treasury is also getting back 10-15 per cent of the sum through increased taxes and reduced benefits, more from any multiplier effect in the economy, and more from any rents charged on the homes before they are sold. In the meantime, also, councils and government departments could get any proceeds from any public land used, rather than have to hand it over to housebuilders on a build now, pay later basis.
When the homes are eventually sold, the buyers could be private individuals, institutional investors, property firms or social landlords. But social landlords would pay for them in the same way that they pay for new homes now - through a combination of grant (if any) and borrowing and their own resources. No extra PFI-style borrowing involved.
This isn’t meant to be a backdoor way of borrowing for new social housing via a method that costs more in the end but simply a way of creating more new homes (of whatever tenure) that will otherwise never be built. I may well still be missing something but I think the bigger issues could be to do with managing such a large programme, land assembly and building the right sort of homes in the right markets for the right buyers.
It’s not the only real-world alternative QE plan being put forward either – both Compass and the Green Party have called for a Green QE energy efficiency programme. -
Comment on: Winners and losers
Fair point, Steve, I was only citing ASDA because that was where David Cameron made the speech. The point is not specific to them, or supermarkets, or retail in general but a deeper one about the growth in housing benefit for people in work because wages are too low and rents too high.
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Comment on: The problem of rent
Interesting points there, Jono. You're right, the same issues do keep coming back eg the creation and abolition of the shopping incentive in the LHA, the problems incorporating housing benefit into a flat-rate universal credit etc etc. As for the solution to other problems of economic and social organisation, as I was saying he was writing on the assumption of full employment and private sector rent control. Big question is whether he would have seen solution to current economic problems as deficit reduction or would he have agreed with the co-architect of the post-war system Keynes? Deficit and debt both higher in 1945 than now but we still (largely) implemented the Beveridge report.
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Comment on: The problem of rent
Interesting points there, Jono. You're right, the same issues do keep coming back eg the creation and abolition of the shopping incentive in the LHA, the problems incorporating housing benefit into a flat-rate universal credit etc etc. As for the solution to other problems of economic and social organisation, as I was saying he was writing on the assumption of full employment and private sector rent control. Big question is whether he would have seen solution to current economic problems as deficit reduction or would he have agreed with the co-architect of the post-war system Keynes? Deficit and debt both higher in 1945 than now but we still (largely) implemented the Beveridge report.
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Comment on: The problem of rent
Interesting points there, Jono. You're right, the same issues do keep coming back eg the creation and abolition of the shopping incentive in the LHA, the problems incorporating housing benefit into a flat-rate universal credit etc etc. As for the solution to other problems of economic and social organisation, as I was saying he was writing on the assumption of full employment and private sector rent control. Big question is whether he would have seen solution to current economic problems as deficit reduction or would he have agreed with the co-architect of the post-war system Keynes? Deficit and debt both higher in 1945 than now but we still (largely) implemented the Beveridge report.
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