The full ramifications of George Osborne’s pronouncements on housing during the Autumn Statement will no doubt take a while to emerge. Some of the rumours of nasty surprises proved to be unfounded. There were some surprises that were broadly positive – such as the increase in stamp duty on Buy-to-let and second homes. And there were some policy changes that didn’t take quite the form that commentators had guessed they might – notably the transfer of the LHA mechanism from the private rented sector to the social housing sector.
Members of the housing blogging community have already been providing valuable, and extended, commentary. If you’ve not seen it already, Joe Sarling provides a helpful overview of the changes in relation to housing supply and the likely impact on affordability and who actually does the building. Brian provides an expansive discussion on a similar theme, drawing in a number of issues and raising a wide range of questions. Whether Osborne’s push to increase owner occupation stands in the way of dealing with the more important issue of affordability is a question that looms large. That his policies can do anything to arrest the decline in the rate of owner occupation is a claim to be treated sceptically. Similarly we must be alive to the possibility that the agenda of the Autumn Statement was less to do with addressing housing issues seriously and more to do with Osborne’s leadership ambitions.
One question of major significance lies in a completely different direction. Does the Autumn Statement represent the death knell for social rented housing? The Government is switching subsidy to supporting discounted starter homes and shared ownership, allowing subsidy to go direct to private developers. The prospects of new social rented housing being built with state support, rather than funding from housing association’s own resources, look pretty dismal. Coupled with the other changes that we already know are in train, and those – such as fixed-term tenancies by default – that we expect to arrive, it is not hard to construct a plausible narrative that social housing is heading for the buffers.
We should also always remember that the Conservatives reverting to a tenure strategy rather than a housing strategy – as they had in the 1980s – has substantial distributional implications. Any subsidy going to those buying starter homes at a modest discount or buying shared ownership properties in high pressure housing markets, or taking advantage of the new London Help to Buy supplement, are, by definition, going to relatively wealthy. The policy is proposing to cap eligibility at household with incomes well over twice or three times the median. These subsidies will be going to those in the top two or three income deciles. This is arguably not even middle class welfare because it is beyond the reach of significant chunks of the middle classes.
Given that it is proposed that much of this subsidy is going to head into shared ownership rather than starter homes we might anticipate that there is going to be renewed debate about the meanings of housing tenure, tenure fluidity, and housing discourses. In something I posted here two years ago on this topic I noted that we could just as accurately call shared ownership “mostly renting” but we don’t tend to do so, and that tells us something important about housing policy. Policy attempts to treat shared ownership as equivalent to full ownership can come up hard against some very real differences. That doesn’t mean that shared ownership is necessarily a bad thing. But it means that it is a different type of thing. The research recently completed by my colleague Dave Cowan, along with Alison Wallace, has plenty to say on these and related topics.
Drawing general conclusions about the implications of the Housing Benefit changes for social housing is difficult because it will depend on how social housing rents compare with private sector benchmarks in a locality. That in turn will depend, in part, on things like whether housing associations in the locality embraced the Coalition’s affordable rent regime or steered clear of it. However, Joe Halewood has urgently drawn our attention to the potentially huge implications of these changes for supported housing. The SAR does not apply in the social rented sector at the moment, but if this policy transfers it from the private rented sector into the social sector then that will have a massive impact on the housing options for vulnerable individuals under 35 years. Joe argues – in his usual forthright manner – that this policy will render a lot of supported housing – including accommodation for disabled people and refuges for women fleeing domestic violence – financially non-viable. He sees the policy very clearly as a new source of a new type of homelessness.
We’re no doubt going to have to spend a while longer trying to make sense of this new housing policy landscape. As yet there are relatively few things we can say for certain. But one thing I am entirely confident about is that Osborne’s claims that his new policy will solve the “crisis of home ownership” is utterly facile and fallacious. For a start, he can offer subsidy and incentives but he has no control over how many properties will actually be built. Promises of 400,000 new homes between now and 2020 should be treated as, at best, aspirational. At worse they are entirely vacuous. And even if this number of properties were to be build, and they were all additional to the ones that are already planned, it would only begin to come to grips with the issue. It certainly wouldn’t solve it.
And it does absolutely nothing about the housing circumstances of those who have no hope of accessing any form of even partial ownership.