Reasons to be cheerful
30 Nov 2016
It’s easy to feel permanently pessimistic at the state of housing in England. 120,000 children will wake up homeless this Christmas. This is worse than last year, which was worse than the year before. Which – guess what – was worse than the year before. The range of people affected by the housing crisis stretches ever broader and more than two in five people don’t have what the public consider to be a decent home.
And yet, recent weeks have given us reason to be optimistic.
At Shelter we always argue that no housing problem is going to be truly fixed until we tackle the lack of supply and start building genuinely affordable homes. Announcement after announcement by successive governments have disappointed by tinkering around the edges of this fundamental problem with equity loans, ISAs, Right to Buy, not-so-affordable Affordable Rents and so on.
That’s why it was so welcome to see a genuine commitment to supporting affordable house building at the heart of the Autumn Statement. The government committed to £1.4 billion of new money for the Affordable Homes Programme. This brings total investment for 2016-21 to £6 billion, nearly reversing the budget cuts in 2010 which decimated affordable housing supply. Considering that we are not yet in the sunlit uplands of public finance recovery and struggling sectors like social care didn’t even get a look in, it’s pretty good going.
More positively, the government is also showing a less dogmatic approach towards tenure. Unlike the previous obsession with Starter Homes, this money can now be spent on affordable rented homes, shared ownership and ‘Rent to Buy’ – a product priced at 80-90% of market rents and aimed at aspiring first-time buyers. Of course most of us have become pretty jaded about the concept of “affordable rent” in recent years. The coalition’s Affordable Rent homes targeted the poorest households but were priced at up to 80% of market rents i.e. not affordable to most people. It remains to be seen what the exact rent levels in the new programme will be, but if the government is serious about tackling the housing crisis it has to fund genuinely low rent homes for people on below average incomes.
Which brings us to the capital, where the Mayor is effectively reintroducing genuinely low social rents for Londoners. The Autumn Statement gave the mayor £3.15 billion to support the building of 90,000 much needed affordable homes by 2021. A third of these will be London affordable rents, priced at rents affordable to low income households.
Sadiq Khan is also toughening up rules to encourage developers to build more affordable housing. They are shockingly poor at playing their part at present: just 13% of homes granted planning permission in London last year were in any sort of affordable tenure. New planning rules will effectively fast track developments which promise 35% affordable housing – and heavily scrutinise the finances of those that claim it’s not possible. It’s someway short of the Mayor’s pledge for 50% affordable housing, but a bold toughening of the current approach. It goes alongside a complex and sensible change in assumptions about how land is valued, which is crucial for scrutinising viability.
As well as building more homes, there’s also a stay of execution on the frankly stupid plan to make councils with the greatest demand sell of much-needed social homes. The forced sale of ‘high value council homes’ has been delayed for at least a year. Here’s hoping it’s dropped for good. As have been plans to make so-called higher income social tenants pay higher rents: Pay to stay has been dropped entirely, bringing welcome relief to at least 300,000 social tenants.
Price pressures will also be eased for private renters by the long overdue abolition of letting agent fees. Not only will it save renters hundreds of pounds every time they move, but it also shows that the government is beginning to look seriously at redressing the many ways renters are disadvantaged in the private rented sector.
And there’s more: plans to cap housing benefit for social tenants at LHA rates have been delayed for another year, the future of Starter Homes is uncertain, and the government has dropped the unpopular plan to sell off the Land Registry. In general there’s a sense of the new government looking again at the housing policies they inherited.
While we await the much trailed White Paper, which will set out how the government plans to kick-start supply, there are also signs of better protections for people at the sharp end of our failed housing system. In October the government announced its backing for the Homelessness Reduction Bill. It plans to extend mandatory licensing to 870,000 more tenants in HMOs. And we’re now daring to dream that the DCLG working group on private renting could bring some improvements for renters.
“But what about?”
Yes, there is still lots to do. The dropping of Pay to Stay confirmed that the government will press ahead with damaging plans to remove security of tenure from social tenants. Housing benefit cuts continue apace – with direct and serious consequences on homelessness as we’ll show tomorrow. We still lack a strategic, aspirational housing vision for people who cannot afford homeownership. But what’s been announced in recent months is genuinely good news. Governments rarely have the means or the will to perform a complete 180 but we’ve seen enough to sense a welcome change in approach.