6 industry news COMMENT So what is the government’s housing policy?
Patrick Mooney of Mooney Thompson Consulting comments
T
he next few months could define the new government’s housing credentials and firmly set out its housing agenda until the
year 2020. Yes the next election does seem a long way into
the future but implementing new housing policies is a bit like steering a huge super-tanker on the high seas – you need to make adjustments early on in order for them to have the desired impact and even then they can take a long time to be felt. An early indication that David Cameron
intends pushing ahead with the controversial pro- posal to extend the Right to Buy to housing association tenants was revealed when this was given centre stage in the new housing bill announced as part of the Queen’s Speech.
Extension of RTB
Brandon Lewis (nearly the former housing minister) was then sent north to Manchester, to plead with the big wigs of the housing world to get onside with the proposal and to help HA ten- ants achieve their aspiration. We shall skip over the obvious question “Had
anyone actually asked HA tenants if they wanted this new right?” to briefly ponder on the problems this policy could encounter. Lots of commentators are predicting a rough
ride for the legislation in the House of Lords – no doubt led by Lord Bob Kerslake, who recently left his top job in the civil service and is now a leading campaigner against the RTB extension – not least because he sees it damaging the fabric of housing in London, where he has just become a the chair of a large HA. Joining Lord Kerslake in an unusual coalition
was new London MP, Boris Johnson, who urged the government to ensure money raised from London council house sales stays in the capital. The controversies come thick and fast, but at
the top of the pile are: •The funding mechanism which forces councils to sell their most expensive houses when they become empty could see millions of pounds leave the capital to other parts of the country;
•HA tenants will be tempted into taking on debts which they cannot really afford, with the potential for high rates of default and repossessions;
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• Government promises to build one new home for every property sold have been shown to be worthless and even misleading, with only one home built for every six or seven homes sold since higher discounts were given to council tenants.
Figures released by the Department for Communities and Local Government showed that 12,304 homes were sold by English councils under the RTB in 2014/15, while only 1,903 homes were started or acquired to replace them using the receipts. And yet the Government will persist with
trying to push this unpopular policy through while we are also seeing two bedroom former council flats in places like Westminster and Kensington being sold for £1 million plus. Of course not everyone benefits from such housing market windfalls. It seems pushing home ownership is the only
substantive housing policy that the Government has – that and pushing for more decentralisation of powers to places like Manchester, at a time when when public sector budgets are being squeezed harder than ever before.
Northern powerhouse
By pushing powers out from Whitehall, the Chancellor can side-step any criticism of failure to deliver because he has passed responsibility over to compliant local authorities who are having to make do with billions of pounds less. It’s a bit like giving a teenage child more responsibility but cut- ting their pocket money and saying ‘Go on, get on with it.” A similar point was made by Tim
Montgomerie when he addressed the CIH annual conference in Manchester. The former Times leader writer is fast becoming a favourite speaker at housing events and he warned the government they risked alienating the public. He said the government intended ‘to emphasise
things like the northern powerhouse and to empha- sise the fact that this is a different kind of Conservative government’. At the same time the Government is proposing to cut upto £12 billion from the welfare budget, with tenants of councils and housing associations very much in the firing line.
Mr Montgomerie added: ‘If you are making
those levels of cuts, it’s very difficult to sustain those credentials.’ The Prime Minister has already said that under
25s are unlikely to receive housing benefit, while other changes in benefit eligibility are also expected. The annual cap on the maximum amount any household can receive in welfare is being reduced to £23,000 and the bedroom tax could be increased as well. Montgomerie said both the new communities
secretary Greg Clark and David Cameron had housing at the top of their agenda, as if that makes us feel any better. He added: “David Cameron has told all of the ministers that housing is one of his signature issues.” If you know what that actually means, then please let us all in on the secret. Also outlined in the Queen’s Speech were two
other measures to promote home ownership: First-time buyers will be helped by plans to
deliver 200,000 Starter Homes, which will be available at a 20 per cent discount to first-time buyers under 40. And a ‘Right to Build’ in the new Housing Bill
will also help increase housing supply and diver- sify the housing sector by giving people the right to be allocated land with planning permission for them to self-build or commission a local builder to build a home. Ministers hope this will act as a boost to smaller and medium sized builders.
Defaults and discounts
Meanwhile HA chief executives and finance directors are getting increasingly worried that pushing through with the welfare cuts and extend- ing the RTB to their tenants could see them being forced into discussions with their private lenders about the impact on their income streams and how to avoid defaulting on loan covenants, as the security for their loans are sold at discounted prices from under their feet. In the meantime the Government is extending
the time frame and funds for the various initiatives to support house buying, particularly for first time buyers. This money is leaking out of the Treasury at an alarming rate and is helping to prevent a readjustment in house prices. The Homes & Communities Agency are unlikely to see their budgets extended in quite the
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