Cheer up!...you've already had the hangover

Council housing

It would be foolhardy to claim 2009 heralded a new golden era of council housing. As things stand, there’s unlikely to be a golden era of any kind of housing for some time (see Key data box). But it might not be over eager to say there were stirrings of a council housing renaissance.

There have been promises of more freedoms - permission to keep rents from homes English councils build or bring back into use, for example. And housing minister John Healey has stuck to his word, given in June, to get reform of the reviled housing revenue account under way without delay. It’s a nettle his six Labour predecessors failed to grasp.

The minister is backed by his boss. 2009 saw Gordon Brown promise several times to remove the barriers to council development, which one town hall called ‘music to the ears’.

Councils have rushed to share in newly announced development cash: £100 million in England, £35 million in Scotland. Though these sums pale in comparison to the £1.8 billion fall in annual capital receipts suffered by England’s councils this year.

Still, there’s inspiration to be had. See the multi-million pound schemes for 2,550 council homes in Sheffield and Leeds or the South Ham Council’s South Gate development in Totnes for details. The latter walked off with top prize at this year’s prestigious Housing Design Awards.

World of finance

When even cabinet minsters say the UK economy is suffering the worst recession in history - step forward Tessa Jowell - it’s a fair bet times are tough.

And so it proved for housing finance as 2009 got under way - despite one poll naming housing among the top 10 recession-proof industries of our time.

January saw Affinity Sutton, Circle Anglia and London & Quadrant get out their cheque books to make bailout loans to struggling associations. In the end only L&Q was called into action with a £20 million loan to an overstretched 40,000-home Genesis Housing Group.

In the same month, the Treasury moved to guarantee high-quality asset-backed securities in an attempt to shore up the mortgage market. It was a glimmer of hope for associations reliant on cross-subsidy from selling market homes.

Spring brought improvements. A £200 million bond issue by Sanctuary Group in March represented the best price paid by an association on the capital markets since the recession arrived in autumn 2008.

2009 has seen the capital markets appear increasingly attractive to associations seeking to borrow without incurring bank charges. The £191 million bond issued by the Housing Finance Corporation in July was the largest in its 22-year history, and massively oversubscribed.

But as the late summer accounting season arrived, the outlook turned cloudier. Ninety two housing associations told the TSA they would write down a collective £174 million in their 2009 accounts, more than double estimates. It later emerged that association giant Affinity Sutton contributed £13 million worth.

Meanwhile the Homes and Communities Agency tried to lure institutional investment into the private rented sector, launching a PRS investment fund. Something seems to be working: in October the Mill Group launched a £500 million first-time buyer fund aimed at institutional investors.

And it seems there’s an improving prognosis for private finance. Last month, the TSA had no sooner predicted a rise in the availability of private finance, than Places for People signed a $200 million (£122 million) deal with US private investors.

Does that make up for news from the National Audit Office that communities and local government department finance staff are not up to managing the department’s £34.4 billion budget? You decide.

The Homes and Communities Agency ATM

There’s been no £250 daily limit on withdrawals from the HCA this year. The superquango’s mini-statement reads something like this: £16 million for two stalled London regeneration schemes; £400 million to kick start private developments; £100 million for new council homes; £2.8 billion in housing grant to revive social housing construction; and a £461 million contribution to Gordon Brown’s £1.5 billion national house building scheme.

So what’s left? Just 15 per cent of the social housing grant pot, to be eked out until 2011. There’s also the problem of the £128 million cut from growth funding and £150 million from ALMOs’ decent homes cash to consider. And possibly some rather large legal fees - furious ALMOs have launched legal action over the raid.

As if that wasn’t enough, in September Inside Housing exclusively revealed the parlous financial state of the government’s erstwhile regeneration quango. It turns out English Partnerships lost £492 million in its last eight months of operation before the HCA took on its work.

Finally, HCA boss Sir Bob Kerslake could be making fewer trips to the cash point. He turned down his £44,000 bonus for the year, citing pressure on public funds.

Regulation

Rules ruled in 2009

January saw the £2,000-a-day pink bus make the first of many appearances in Inside Housing. The National Conversation - a massive tenant consultation exercise - was under way. Later in the year 1,500 would apply to join the National Tenant Voice, a new tenant lobbying body.

The TSA’s first ever corporate plan, with goals up to 2010, declared an ‘unapologetic focus’ on housing association finance. Most landlords expected the TSA to bring more regulation, according to an exclusive Inside Housing survey in June. But landlords came out fighting for the watchdog in late autumn in the face of Tory plans to scrap it and hand housing regulation to local authorities.

With the year end came details of the TSA’s new regulatory framework, one of the stories of the year. Generally the plans went down well.

Introducing… new faces in 2009…

Alex Neil as Scotland’s first ever housing and communities minister, replacing plain old ‘communities minister’ Stewart Maxwell.

Former local government minister John Healey as the fourth housing minister in two years, with John Denham taking the communities brief from an expenses-stung Hazel Blears.

Influential house builder Tony Pidgley moves upstairs to chair private developer Berkeley Homes, leaving finance director Rob Perrins to step into the vacated managing director role.

… and what we learnt about some familiar ones…

TSA chief Peter Marsh revealed his early ambition was ‘to run an airline’. (Surely a bus company?, ed). Meanwhile, the HCA’s Sir Bob Kerslake was a ‘science nerd’ at school, while Riverside boss Deborah Shackleton wanted to be PM.

… and some famous ones

Housing associations hired Cherie Booth to fight a group action against councils’ care service contributions.

Bob Marley, Speech Debelle and Dizzee Rascal all make it into Inside Housing’s first music issue, guest-edited by Blur drummer and prospective Labour MP, Dave Rowntree.

Villains

John Belcher, former chief executive, Anchor Trust

Mr Belcher was making headlines for the wrong reasons from the off. The boss defended plans to sell off 37 sheltered housing developments in January, saying the 1970s and 80s schemes were ‘at odds’ with his organisation.

He drew flak for topping the chief executives’ pay tables in the autumn, a 20 per cent pay hike taking his total compensation to £391,000. A bit rich when Anchor posted a £35 million annual loss just weeks later.

But his critics had the last laugh. Intrigue surrounded the 62-year-old when he quit Anchor suddenly in October, amid allegations of a fallout with the board.

Kristine Reeves

Norwich Council sacked its head of strategic housing from her £62,000 a year post in January after she was found to have moved herself and other staff into decommissioned sheltered housing without permission.

Campaigns

The sector got behind two hard-hitting Inside Housing campaigns in 2009. The first, Empty Promise, launched in January, calling for action on the nation’s 1 million empty homes.

High-profile backers included shadow housing minister Grant Shapps and London mayor Boris Johnson, besides a host of housing luminaries.

The first victory came in March when then housing minister Margaret Beckett authorised a new step-by-step guide for empty homes powers - a key campaign demand.

By April a petition signed by 380 supporters landed on the prime minister’s desk. The HCA had agreed to a second demand, and the Treasury was considering Empty Promise’s final aim. The Empty Homes Agency said the campaign had had a ‘galvanising effect on the sector’.

Our second campaign, Safe as Houses, kicked off in September. A response to several fatal incidents in high-rises, including the Lakanal House fire in south London which left six dead in July, it aims to improve tower block safety. Backers include House of Commons leader Harriet Harman. Join her and others at www.insidehousing.co.uk/safeashouses

Party politics

If 2010 is to bring the pre-election bun fight, then 2009 saw its fair share of squabbling over the rich teas.

Best of all was the government vs opposition scrap which broke out during conference season. Housing minister John Healey kicked things off at his party’s conference in Brighton, branding the Tories ‘two faced’ and, based on plans in Conservative-led Hammersmith & Fulham Council, accused the opposition of harbouring ‘secret plans’ to raise rents.

Leader of the west London authority, Stephen Greenhalgh, retaliated at the Conservative conference. Dismissing the attack as ‘whiffle’, he referred to Mr Healey as ‘some bloke who looks like an accountant’.

Away from the playground, Gordon Brown staked his re-election bid on housing. In June he unveiled a string of radical policy reforms, including £1.5 billion for 20,000 new homes.

Meanwhile shadow housing minister Grant Shapps used his party conference speech to portray Conservative Britain as a ‘nation of house builders’. But he failed to add detail to existing policies, such as a council tax scheme to incentivise developments.

Mr Shapps did however take every available opportunity to attack the TSA’s performance. ‘I’m not impressed,’ pretty much sums it up.
The fun looks set to run. Mr Healey has challenged shadow communities minister Caroline Spelman to a US-style TV debate. Watch this space.

Regions

Scotland

Spring brought £644 million for new social rent and low-cost ownership homes, while a draft housing bill paved the way for axing tenants’ right to buy. Freedom of information requests revealed the ‘alarming’ methods used to form recent housing policy in Scotland.

Northern Ireland

It’s been a year of scrambling to plug a £200 million hole in the Northern Ireland Housing Executive’s housing budget. Concerns the shortfall would prevent landlords meeting the 2010 decent homes target were allayed when consultants said in June the goal was ‘well within NIHE’s capacity’.

Wholesale transfer of the housing executive’s 93,000 homes is among options set out in the autumn by a new commission on housing in Northern Ireland, chaired by Lord Best.

Wales

Wales has continued to build on the momentum of the the 2008 Essex review of Welsh housing. Most notably the Welsh Assembly has asked Westminster for the power to make its own housing laws. Like Scotland, Wales hopes to abolish the right to buy.