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First Homes won’t extend homeownership and will decimate supply of homes for those most in need
First Homes will reduce the amount of shared ownership and low-cost rental homes built, without providing an option for those locked out of homeownership. The government must think again, writes Ruth Davison
Lots of opinion pieces by chief executives of housing associations reference the boon a social home was to either themselves or their parents.
By contrast, I have vivid memories of my grandad muttering darkly about paying rent and “lining the pockets of a venal council” with nothing to show for it in the end. In fairness, it probably says more about him than the home.
His son, my dad, was praised for buying a home. And he did well out of it, trading up and riding the tide of rising property prices from the 1970s onwards.
It’s still the case that most of us wish to buy a home – a whopping 86% of us, according to the latest British Social Attitudes survey.
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The reasons will be many and varied, from the instinctive and emotional ‘my home is my castle’ to the entirely economically rational. With the exception of a couple of notable blips, in the past 40 years the market has generally delivered for those who ‘got on the ladder’.
As an aside, the seemingly emotional ‘having something to pass on’ is also a strong economic argument. In social policy terms, acquiring assets and handing them on is obviously one of the best ways to end inter-generational poverty.
“I’m not going to knock a wish to help people achieve their dreams. But I will knock a policy if it’s at the expense of people for whom any home, let alone home ownership, is currently out of reach”
The First Homes proposals from the government speak to this desire. I’m not going to knock a wish to help people achieve their dreams, but I will knock a policy if it’s at the expense of people for whom any home, let alone homeownership, is currently out of reach.
The 30% market value discount for First Homes is to be largely funded through developer contributions via Section 106. That’s the policy that currently delivers half of the new housing provided by housing associations.
At Islington & Shoreditch Housing Association we are committed to our corner of north London and work closely with local authorities. They and we are committed to keeping our communities mixed and vibrant and so work together to build social and London affordable homes, with lifetime tenancies. We don’t do affordability tests for social homes. If you can’t afford that rent, you can afford no other. It’s what we exist to do.
We also proudly build shared ownership. Median London household income is higher than national median household income, which the Office for National Statistics (ONS) says stood at £29,400 in 2019.
But the average London house price was £475,000 in November 2019 – and it’s much higher than that in Hackney and Islington, two of our three core boroughs.
You don’t need to be terribly au fait with the mortgage market or a mathematical genius to know that means owning a home is beyond the reach of most. Even with a 30% discount. People may as well wish for world peace and glittery unicorns.
Shared ownership, with shares starting at 25%, gives people that leg onto the ladder. First Homes won’t.
So, the idea that not only up to 80% of Section 106 contributions could be diverted away from social and affordable rent and shared ownership, but that local authorities would lose their discretion to prioritise on need, is horrifying.
Every day, they must already make decisions to prioritise utterly desperate people over those in heart-breaking need. According to Freedom of Information Act requests in 2018, Hackney, Islington and Waltham Forest collectively spent more than £94m on temporary accommodation. To stem the flow of the very few social homes that help will hugely exacerbate the situation.
“The idea that not only up to 80% of Section 106 contributions could be diverted away from social and affordable rent and shared ownership, but that local authorities would lose their discretion to prioritise on need, is horrifying”
And building those is already difficult. We are an association with just 2,400 homes. We don’t build for outright sale, and we prioritise social rent. We can therefore never be the highest bidder on land – the numbers don’t stack up.
The result is that in Hackney for the past five years all our new homes have been via Section 106 – and for those we have paid dearly. The homes we’ve built in Waltham Forest or Islington on land we purchased were possible only because of local authority support. Support they won’t be able to give in future under these proposals. No support, no homes. Or certainly not at the level we currently build.
Homes predominantly for the people who ‘medians’ mask. In all our boroughs the percentage of households in poverty is more than 30% and in one it is 40%, according to the ONS.
So please, government, don’t worsen deprivation in the name of aspiration. Partner with people on their desire to own a home by all means, but not at the expense of those who desperately need any home. Do both, rather than deliver neither.
Ruth Davison, chief executive, Islington & Shoreditch Housing Association
The National Housing Federation’s shared ownership campaign
The National Housing Federation (NHF) is seeking to boost the profile of shared ownership across England.
It has created a campaign with some of its housing association members “to develop and deliver a clear, consistent way the sector talks about and markets shared ownership”.
It is part of a wider advertising campaign launched in January 2020, designed to help the public understand what shared ownership is and help more people into homeownership.
The NHF says that 45 housing associations have now signed up to the campaign’s steering group.
Prominent members include:
- Amy Nettleton, assistant development director (sales and marketing) at Aster
- Jim Munson, head of sales and marketing at Notting Hill Genesis
- Kush Rawal, director of residential investment at Metropolitan Thames Valley
- Louise Gregory, head of sales and marketing at Moat
- Paresh Laxhman, head of land, planning and sales at Rooftop Housing Group
- Rob Poole, managing director of Open Door at Halton Housing
- Sandy Kelly, head of sales at Onward
- Sarah Clark, head of sales and marketing at EMH Group
- Steve Moseley, director of governance, strategy and communications at L&Q
- Tariq Qureshi, sales and marketing director at Southern Housing
- Tim Seward, director of sales and marketing at Clarion
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