Slums as a housing solution

6605979025_d5b50310c2_zAt the end of last week there was a bit of a furore generated by a blogpost published by the Adam Smith Institute. A young man called Theo Clifford argued that the solution to the British housing crisis lies in deregulation. That in itself is not, perhaps, an earth-shattering observation to find emerging from a libertarian think tank. Clifford, though, takes the argument a stage further than we usually see. He argues that Britain’s housing problem is an absence of slums. Social welfare would be improved if we were to deregulate so that housing consumers can “choose” poor quality, cramped, overcrowded and/or insecure accommodation, if that is the amount of accommodation that would satisfy their preferences.

This argument can be criticised from a number of directions. And it has been. [Read more…]

Finance, housing and the ageing population

Last week I went to a meeting in London to talk housing and the ageing society. I was invited to do a quick three minute introduction to the financial aspects of the topic of housing and an ageing population. I thought I’d write up my remarks and amplify them a bit. I’ve also reordered the points a little so they flow better. And, for no real reason other than it’s a bit of a change, I’ve posted at Medium rather than here (click on the title below to go to the post). I’ve also, for a bit of a change, added references to some of the recent work in the relevant academic literature.

Finance, housing and the ageing population

Policy-induced uncertainty

[Originally posted on The Policy Press blog, 24/07/15, under a different title. Reposted here under the original title.]

Choices of a businessmanGeorge Osborne’s recent “emergency” budget proposed many changes to state support to lower income households in a bid to fulfil the Conservatives’ manifesto pledge to cut £12bn from welfare spending.

One unexpected aspect of this package was the proposal to cut housing association rents by 1% each year for the next four years.

This proposal was justified with reference to social housing rent rises over the last few years. These have pushed up the already substantial housing benefit bill. Households have needed greater state assistance in order to afford the rents being set. Bearing down on rents over the next few years will, it is claimed, both reduce the housing benefit bill and force social landlords to deliver efficiency gains.

To the unwary or unfamiliar this argument could appear entirely plausible. It is surely time to try to rein in this sort of behaviour: landlords extracting income at the taxpayers’ expense.

Yet, it is important to understand how we have arrived at the current situation and what the consequences of this policy change are likely to be. [Read more…]

Through a glass, darkly

414585868_2c8513d269_nThe community of housing bloggers has already offered plenty of comment on the implications of the Chancellor’s “emergency” budget for housing. Comment from almost all quarters – be it Jules, Ken, Joe, SteveTom or Gavin – highlights, in more or less lurid terms, the challenges the budget measures are going to present the housing sector.

Some of the changes announced in the budget – the reduction in the benefit cap, cuts in tax credits, and the benefit freeze – were heavily trailed. However unwelcome they might be, they didn’t come as a huge surprise. Yet, the precise dimensions of the change – the reduction of the cap to £20,000 outside London and the inclusion of LHA in the benefit freeze – made for grimmer reading than many might have hoped.

But other policy changes were rather more of a surprise. [Read more…]

Policy unpacked #10 – Social housing: heading for history or the tenure of the future?

Policy UnpackedIn this podcast I contrast some the current Conservative government’s policy proposals with alternatives offered by a couple of recently published reports, and then reflect on the current state of the debate, particularly the role of evidence.

(Running time: 28′ 07″)

Mentioned in this podcast:

[Read more…]

The disconnected housing debate

There is something of an oddity in the debate over the nature of the problems facing the UK housing system, and therefore by implication where the focus of policy attention is best directed. I’ve remarked on it before but it struck me forcefully this week when reading Christian Hilber’s new briefing, prepared with the aim of informing the election debate, UK housing and planning policies: the evidence from economic research. This was reinforced by Andrew Lilico’s contrarian post at CapX yesterday, which argues that there is no housing crisis and never was one. I don’t agree with Lilico’s overarching argument, but in the course of his discussion he makes a very important point. [Read more…]

Further leverage in the housing policy debate?

I’m not sure quite how I missed it the first time around. Most probably because, like many policy commentators, I’m inclined to focus too closely on the relatively parochial and the marginal shifts in domestic policy position.

As a consequence of this failure to look sufficiently far beyond the end of my own nose I only recently became aware of the Geneva UN Charter on Sustainable Housing, a document that was finalised back in October 2014. This document is not legally binding, but it offers a potential resource in ongoing discussions over the direction and ambition of housing policy emanating from Westminster. [Read more…]

Housing markets and economic stories

Part of the story isn’t being told.

As we move towards the General Election strands of news and snippets of information have emerged which circle around the issues but there is a gap in the middle where the story could – and should – be.

I’m thinking here of housing-related aspects of the party manifestos: cuts in inheritance tax on property versus mansion taxes. I’m thinking of the observation that buy-to-let lending was the only component of mortgage lending not to stall in February. I’m thinking of Hannah Fearn’s argument that removal of the obligation to invest pension pots in annuities can be interpreted as a move to recapitalize the bank of mum and dad. And finally I’m thinking of Christine Lagarde’s words of support for George Osborne’s strategy for economic management.

So what’s the story that is missing? [Read more…]

Selling off social housing

8182240298_f9770a9cbeRumours have been circulating in the housing policy ether for several months now. Given the housing policy influence of the Policy Exchange at No 10 those rumours should have been, and were, treated seriously.

And now it looks like those rumours are well-founded. They’ve only gone and done it.  The Conservative manifesto pushes the Policy Exchange line that local authorities should be forced to sell high value properties in order to fund building new properties in lower value areas, and, if elected, they are proposing to extend the Right to Buy to housing associations. This opens up the possibility of an extra 1.3 million households having the chance to buy their home at a discount.

This is supposed to be the Conservatives’ big offer. Although, to be fair, it would seem to be a big offer targeted at a relatively small group of people – housing association tenants who earn enough from stable employment to be able to afford a property which, even at a substantial discount, is going to be a financial stretch.

Despite what some people seem to think, extending the Right to Buy to housing associations is not a new idea. [Read more…]

Policy unpacked #9 – Housing and the General Election

Policy UnpackedFor this podcast I am joined again by Ken Gibb to discuss housing policy ideas emerging from the political parties in the run up to the General Election. We review some important discussions over the future direction for aspects of housing policy in Scotland, and reflect on the development of policy competition between the Edinburgh parliament and Westminster. We also consider one or two policy proposals emanating from other commentators.

(Running time: 50′ 05″) [Read more…]