The fight against Sadiq Khan’s affordable housing reforms is nothing more than snake-oil politics

The BBC did not only mischaracterise the change as a reduction in affordable housing quotas. It also failed to make even the basic distinction between percentage points and percentages, reporting that the mayor had cut affordable housing requirements by 15%, rather than 15 percentage points.

Linguistic pedantry aside, the error points to two wider problems: how a lack of funding at the BBC is hurting its ability to fact-check, and a deeper reticence within the housing industry to defend itself and inform mainstream opinion properly. 

I have written in Inside Housing many times about how it angers me that housing associations have not had a better deal, reputationally and financially, given they have effectively been housing the country since the financial crisis. George Osborne’s social rent cuts, a decade of cheap debt, and now the best part of a decade of tighter safety regulation have piled on costs while creating billion-pound black holes in balance sheets.

None of that context was offered by the BBC, and little of it is understood by policymakers at large. 

Inside Housing and its sister publications have reported at length on the milestone deals by L&Q and Notting Hill Genesis, both selling off mega-portfolios to repair their balance sheets.

Both moves are the right thing to do. The sales bring in private capital to cut debt payments and, in L&Q’s case, help unwind previously inadvisable deals such as the £505m acquisition of Gallagher Estates in 2017. They make perfect sense. 

This context matters, because too many people think the affordable housing crisis has been solved at a stroke by the recent £39bn settlement. Very few grasp the nuance of how grant funding works, as the commentary around some of Andy Burnham’s proposals shows.

The other fallacy is the idea that the social housing crisis can be solved by hitting private profits. Without a thriving private housebuilding sector, the flow of Section 106 homes, which has all but dried up, cannot resume.

The Greens’ assertion, on Radio 4 and in their manifesto, that the answer is council buybacks and rent caps, is lunacy. It is a toxic form of snake-oil politics that sells an undeliverable dream to people without acknowledging the complexity and reality of what we face.

This refusal by politicians to tell the truth, or to accept reality, is how we got here, from the hangover of Brexit to the string of decisions that followed it and created the instability and volatility we now live with. 

My day job involves advising clients across the sector on business strategy, investor relations, corporate communications and policy, and through advisory roles with the Urban Land Institute and the Association for Rental Living, I am proud to be an active advocate for the sector, and wholly unaligned with any political party.

I say this purely for transparency: many of the conversations I have around dinner tables with G15 chief executives are about standing up, defending their positions, explaining this context and championing the work that thousands of colleagues do across the sector every day. 

“The sector would be far better served by unifying around a core set of asks than by looking inward at its differences”

So why does this matter? In the context of this story, what is clear is that the current routes for funding social housing are broken, and the wider market with them.

The gold rush we enjoyed during the zero-interest decade, getting private house builders to fund almost everything alongside modest public grants, is no longer sustainable. Industry research showing an £18bn-a-year funding gap for social housing, proving it does not pay for itself, is still poorly understood. Meanwhile, soaring budgets for housing benefit and temporary accommodation swallow cash that could build new, fit-for-purpose homes. 

As someone who grew up working class in east London, in the shadow of the Barnardo’s campus, I appreciate the social and economic need to support no-income households, and those who so often fall off a cliff the moment they leave the care or criminal justice systems. There is an immense set of problems here beyond simply housing key workers, and these are the things housing associations do without getting the credit.

The sector would be far better served by unifying around a core set of asks than by looking inward at its differences. We should be finding the sensible people across the political divides and harnessing their voices to bring some common sense back into these debates.

The evidence on the damaging effects of rent caps is clear. So is the need to think radically about how we fund social housing, including a more useful role for pension fund cash and a contribution to retrofit.

As the recent partnerships between institutional managers such as Legal & General and Hyde show, the opportunity to bring in long-term pension capital is real. That is a long way from fast-tracking planning, but it shows the depth and complexity of the conversations we need to be having about helping tomorrow’s government deliver.

Ultimately, in a world of volatility, the only thing more predictable than England losing on penalties is that, unless we deal with the affordable housing gap, social division, unrest and populism will keep growing. And with them, the snake-oil salespeople will prosper. 

Andrew Teacher, founding partner, Lauder Teacher Associates