Two wrongs

Yesterday, Eric Pickles launched his latest war the nation’s town halls.

Reading straight off the Policy Exchange hymn sheet, the communities secretary ordered councils to publish the latest market valuation of their social homes every year. He also told them to stop ‘sitting on millions’ that could be used to build new homes.

According to the departmental press release, this ‘will give people the information they need to ask questions of how their council is managing stock – and how selling more expensive properties could provide the funds for councils to build more homes and reduce waiting times’.

However the government’s consultation document showed that 58% of respondents did not support this.

While they were perfectly happy to release the existing use value - the measure used to value stock on balance sheets and for securing debt finance - they felt publishing market value would lead to ‘misinformed debate’.

This is because while a flat might have a high market value, it also provides a home for a tenant on a secure tenancy. The value can’t be realised without making the tenant homeless, which is illegal.

So if councils publish the market value of their homes, they could be accused of sitting on millions that could never actually be touched. The department dismissed these concerns. Then put out a press release accusing them of sitting on millions.

Ultimately, selling off expensive homes isn’t the magic bullet it is sometimes considered. You still need the land and capacity to build the replacements and you lose a valuable asset while undermining mixed communities.

Camden and Myleene

A different approach for councils which operate in high value areas is to build homes for sale, as Camden are currently doing.

To fund this building work, they are also selling off high value brownfield land in the borough.

These included, as Julian Fulbrook, the cabinet member for housing revealed to Inside Housing this week, a row of six garages just off Chalk Farm Road which went for £1.6m.

So while Myleene Klass was wrong to suggest one garage would be considered a mansion under Ed Miliband’s controversial taxation plans, a row of eight probably would.