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Gimme Shelter : Housing Policy


House building

Britain needs to build 300,000 homes a year. In 2014, the coalition only managed a high point of 141,000. Well, that's what happens when you leave things to the market? House builders blame restrictive planning rules for their sloth but why wouldn't they, fewer houses means the ones you have for sale will earn you more.

Social housing in Britain is facing a crisis, anyone who doubts this should consider the numbers from London's Tower Hamlets, where 24 thousand families are chasing two thousand homes. Each year the number of applicants rises and the number of properties falls.


The year of the clearances

The Localism Act 2011

As of 9 November 2012 the Localism Act 2011 came into force. Significantly, a homeless family cannot refuse an offer of accommodation from a local authority, if they do refuse, the local authority is released from its duty to provide accommodation. Further, by finding short-term private accommodation the council has fulfilled its obligations, it no longer has to provide a home for life.

The Tory Social Cleansing programme continues apace and one day, when the historians find the courage to pick up their pens again, they will write of now as the time of the clearances. We are not here talking about Dale Farm's immobile travellers, the victims here are the poor of the inner cities. Poor people who lower the tone are being moved to the marches, to the dark corners of the nation, to Hull and Bournemouth.

Yes, the historians will say that this was the time of the slum landlord and bailiffs, of the council chiefs, washing their hands like Pilate, of the conniving developers, of alarmist politicians frightening the nice people with tales of the human leeches sucking the life blood out of the housing budget.

The historians will tell us of the face of compassionate Conservatism, a land of sheds with beds and a stealth-like housing law that removed the rights of the homeless in 2012, another gouge out of the Welfare State.

Local authorities were given a legal obligation to take families in and find them social housing locally at an affordable rent. No longer. As of now, that obligation has been removed. And no one has bothered to provide a definition of what is meant by an 'affordable' rent. Now, families can be housed anywhere that the local authority finds a rent that suits its budget. Children's schools, local ties, work, now count for nothing - you will move. Kensington and Chelsea have already dislodged 800 souls, some of them lifetime residents in the area.

The master plan is superb, once wealthy areas have purged all the poor residents, at a stroke they have removed all the social costs of supporting poor families in terms of welfare and care. They can then focus on providing homes for aspiring young singles, who don't require housing benefit and can afford to pay top dollar. The receiving local authorities in the forgotten towns of the North, or in the South at the seaside, will see their costs go through the the proverbial roof, assuming the accommodation has one, and they will have their 'tones' lowered.

Now Factor In the Housing Benefits Cap

Housing Benefit Cap, changes from 1 April 2011 (figures from Gov.UK)

A limit will be introduced so that Local Housing Allowance does not exceed:
£250 a week for a one bedroom property (including shared accommodation)
£290 a week for a two bedroom property
£340 a week for a three bedroom property
£400 a week for a four bedroom property.

At the level of ideology the Tory believes that cutting housing benefit will force rents to fall, however, this free market nonsense fails to notice that we have a housing shortage. Why, because New Labour didn't build enough houses and the incumbents only talk about building 'new garden cites' but they have failed to get the private house builders to leave their yachts in the Med, they are sulking because they only want to pay for public land once homes are built and sold. Also consider the role of private landlords here, since the Cap was introduced they are less keen to let to benefits claimants because they can no longer milk the benefits system.

Housing Facts

The Government planned to slash £2bn from the housing benefit bill, it's gone up by £4.7bn. Nearly all new claimants are in work but can't afford to pay their extortionate rents. And 42% of tenants are living in sub-standard properties. The Tories have no plans to regulate private landlords or to introduce rent controls, they prefer people control.
Something to think about: 7 out of 10 homeless people discharged from hospital are discharged back onto the street - more evidence of compassionate Conservatism.

Now factor in the crack down on squatting

Clause 144 of the Legal Aid, Sentencing and Punishment of Offenders Act is now the law of the land (Sept.2012), this made squatting in residential buildings punishable by up to 6 months jail and/or fines of up to £5,000.
Council and Housing Associations have 5 million names on their waiting lists, 80,000 families are officially classified as homeless, at a time when fewer houses are being built now than in 1923.

Estimates put the number of squatters at around 20,000, dislodging these people could backfire on the government by bringing the woeful ability of Britain to house its people even more into the spotlight. This move will of course help absentee foreign landlords but it will also prove expensive for the police, who will be handling removals and the local authorities, responsible for housing the homeless.
Footnote: Sept' 12, 2012, Westminster Council made the first use of the new squatting law.... only 19,999 to go then.

Factor in plans to cut housing benefit for under-25s

Crisis, the national charity for single homeless people, attacked Mr Cameron’s plans, which would affect 385,000 people in the UK – pointing out that more than half of them have children and many are working, looking for work, or are ill or disabled and many would have fled the family home after suffering violence or abuse.

The average age at which people can now afford their first home has risen to 35 years. Dave says that young people claiming housing benefit should live at home with their parents - he plans to save £1.8bn. His saving plans might make it a tad difficult for the young to get on their bikes and go looking for those elusive minimum wage jobs.


Understanding Tory Housing Policy

There's not much to it really, Grant Shapps talked about being committed to Social Housing, he was demonstrably not. The Localism Act has given the green light to local authorities to do whatever they like on housing and they are. They are moving people on housing benefit out of the boroughs, miles away up North. They are even demolishing social housing stock to make way for private developers and they are not building affordable housing. They are selling vacant homes to housing developers, not local residence under the Right to Buy scheme. They are doing nothing about the rack-renting, slum landlords. Note, 25% of working renters are claiming housing benefit because they don't earn enough to pay the rent. And as the social housing stock diminishes, the rent goes up. The Building and Social Housing Foundation found that 93 per cent of new housing benefit claims made between January 2010 and December 2011 were made by households containing at least one employed adult. Let's recall that the rent capping part of the Welfare Reform Bill was designed to "reintroduce the culture of work in households where it may have been absent for generations", that Bill didn't say anything about working people having to move half way across the country when their housing benefit was cut.

Facts: 4.95 million, the number of housing benefit claimants in Great Britain, excluding Northern Ireland; 300,000, the number of extra claimants since January 2010, of which 279,000 were employed.

Local councils are also rewriting the rule book on allocating homes. There are 5 million people on social housing waiting lists across the country, for many the councils’ new allocation policies are making the waiting even longer. It will also force many more people into the clutches of the slum landlords, and Dave has no plans to cap private rents. The old system of allocation was based on points for those with the greatest need but now extra points will be available for citizens who meet the council's new criteria, in particular, having a job.

In the year 2011-12, there were only 15,500 housing starts. Predictions on the rise in the number of households over the next 25 years say that 230,000 new homes will be needed each year to keep pace with growing demand. These figures alone tell you everything you need to know about Tory housing policy, it's tragic and they are not facing up to it.

Now factor in help for the developers

Planning laws have been altered to make it easier for developers to renegotiate deals with town halls over the number of affordable homes they must supply. Once there existed a sanction that roughly 25% all new builds would be social housing. Now, under the new scheme of things, developers are generously offering to build no social housing. For example, the developer of 211 homes at Bletchley that was due to include 63 affordable homes recently successfully resubmitted their plans, minus any affordable homes. That is, affordable for low paid public sector workers.

Andrew Whitaker, from the Home Builders Federation seems to think that renegotiating deals is perfectly acceptable:

"Private housebuilders deliver the majority of affordable housing in this country. In a few cases, sites where planning permissions were negotiated some years ago are no longer viable to develop in the current market."

Viewed from another perspective, Tory policy on affordable housing reduces to putting developer' profitability before long-term community development.

David Hopkins, deputy leader of Milton Keynes council wrote to planning minister, Nick Boles to inform him his policy
"...unfairly and inappropriately favours the interest of developers over the needs of present and future residents".


Now factor in the bedroom tax

The bedroom tax is being introduced to end under-occupation or make additional savings in social housing benefits. Those affected, some 600,000 souls, will have to find between £14 and £25 extra to keep the spare room. Alternatively, they may have to move to elsewhere in the country since there may not be a property the size they need in their local community.

An interesting feature about those who will be affected by this tax, (which the government insists on calling a 'spare room subsidy' because it doesn't like the association with the Poll Tax,) is the high number of disabled people involved. On the governments own figures 420,000 disabled people will be taxed for their rooms. For example, suppose that each person will pay the extra £14, that amounts to £305m saved in benefit. If they can't pay, the government has set up a hardship fund that local authorities can tap into, of £30m; safe to say, there will be hardship. How much we wonder will it cost local authorities to assess which disabled people to move on and which to leave alone since some, perhaps many, will have specially adapted dwellings?

Deceitfully, Call Me Dave, told parliament (06/03/13) in a response to Ed Miliband, that the retired elderly would not be affected by the tax. It may be true that existing pensioner benefits claimants will not be bothered by the tax but all new claimants, after the introduction of Universal Benefit in October 2013 would be.

Also, families with a disabled child under the age of 10 with their own room may lose that since the new rules state that children under 10 can share. This may cause problems for siblings. The tax will also apply to children of the same sex up to sixteen, who must now share a room.
People who require round-the-clock care will also lose out under the new rules. If the carer is supplied from outside then they will not be affected but if the full time carer is a partner they will be expected to pay up or lose the room.

The history of Right to Buy

Under the old Tory “Right to Buy” scheme, 1.7 million council houses and flats were sold at discounted prices to their tenants between 1981 and 1995. The provision of new social housing was switched from local authorities to housing associations. Whereas in 1978 32 per cent of all housing in Great Britain was owned by local authorities, the proportion was under 19 per cent by 1995.

The ConDem's latest gimmick, sorry, boost to social mobility, is to allow council house residents to buy their properties and gain up to 50% discounts. This of course assumes that the Council of Mortgage Lenders director general Paul Smee will dish out the required mortgages. Mr Smee said: "lenders will need to conform to all relevant regulatory requirements" - but no one knew what he was talking about. And in case you worry that reducing the housing stock in this way will only lead to longer queues on the social housing waiting list - worry not.
Grant Shapps, one time Housing minister told us:

'We are determined to maintain the number of affordable homes for rent - so for the first time, every additional home that is sold will be replaced by a new affordable home on a one-for-one basis.'

Did anyone spot a gap in Shapps's thinking there - i.e. some sort of disjunction between money in and money out. Are we expecting Shapps's house builders to be waiting trowel in hand for a house sale before they set to - all very odd.

On 3 January 2014 the government announced plans to increase the maximum discount for a house to 70% of its value. The five year tenancy criterion will remain, and should the property be sold within the first five years of the original sale, part or all of the discount will be required to be paid back. Right to Buy has been a disaster for the British housing market. It's increased the housing benefits bill, added pressure to local authority waiting list and forced many families into the grip of the unregulated private rented market.

There's more - not a new scheme but just in case you missed it.... Communities have the Right to Buy post offices, libraries, swimming pools or pubs threatened with closure. This move follows the shutdown, over the past decade, of more than 5,000 post offices, 3,500 pubs and 200 public libraries.


FirstBuy/Help to buy

We don't know if Mr Smee liked the FirstBuy scheme started in 2011, through which an interest free 20% loan was made available on new homes, if the buyer could find a 5% deposit and if, Mr Smee would loan the other 75%. Wait a moment! Is this the same FirstBuy scheme that Shapps announced the week before (March 2012). The conditions have changed but its the very same scheme; giving money to people who can't afford to buy an overpriced pile of bricks. Leaving many, further down the road, ladened with debts they can never repay. And deep irony; citizens who can't afford to buy will be subsidising those who think they can.

What exactly does FirstBuy/Help to buy and Right to Buy do for the tens of thousands, perhaps millions of citizens living in sub-standard, rat infested, damp, rotten, virtually uninhabitable private rented accommodation - no question mark required, the answer's nothing. The Help to Buy equity loan scheme, which was due to come to an end in 2016, will be extended until 2020.

This scheme, which involves the government lending prospective buyers up to 20% of the cost of a home so that the buyer only needs a 5% deposit, covers only new-build homes, which has made it less controversial than the Help to Buy mortgage guarantee programme that can apply to any property worth up to £600,000.

The equity loan scheme has already helped to fund the purchase of 25,000 homes. According to the Treasury, extending it from 2016 to 2020 will help another 120,000 people buy homes. Shapps announced a return to 95% mortgages to boost private house building, help first time buyers, and encourage social mobility, blah...

The plan involves the taxpayer underwriting mortgages for first-time buyers who want to buy a new-build home. We will see what happens when the current holiday on stamp duty for first-time buyers ends? The Council of Mortgage Lenders director general, Paul Smee, likes the idea.

What ever happened to the Eco-Towns

House building in Britain is at its lowest level since the 1920s. New Labour came up with the idea of the biggest house building scheme since the second world war, in the shape of Eco-Towns. The original plan imagined at least ten towns, under the current government this has fallen to just three, and the proposed towns, if they get built, will probably end up being small villages.

The reason the scheme has foundered is several fold. Grant Shapps slashed public funding for the scheme by a half. Most the money for this scheme was coming from the private sector and when they don't want to know, it's a sure sign the opportunities to make a fast buck are largely absent. Absent because the building spec' for these eco sites was rigorous, far more rigorous than Mr Wimpy et al was use to bodging to - these builds were supposed to be carbon zero dwellings. Add to the mix, lobby groups such as the Campaign to Protect Rural England protesting against the schemes, and perhaps, more importantly the government reneged on its promise to ease up planning regulations for the scheme.

The present Coalition government is aware that more than 100,000 new homes are needed now, that number is additional to the 120,000 completions to September 2012. New starts for the same twelve months fell by 9% to less than 100,000. New Labour's "eco-towns" project which, similar to the coalition's new towns programme, had intended to construct new settlements of up to 20,000 homes have not materialised. The politics of housebuilding is such that if the Government is not prepared to take on local interests then not much will change.

Nick Clegg says that the government will intervene where schemes have hit a wall and would supply builders with funding, which would be repaid only when the homes were sold. There’s no point here, we are just telling you what Nick said although we don’t know who told him to say it.


Garden Cities?

George Osborne announced his plan for 15,000 new homes at Ebbsfleet in Kent and strangely described it as a new Garden City, "the first for 100 years". In the annals of idiocy that was a seminal moment.

Ebenezer Howard's came up with the original vision of ‘slumless, smokeless cities' was a part of a campaign for co-operative development, land reform and land capture. One school of thought describes Howard's vision as radical and socialist but another suggests that it was reactionary, that is, a reaction to the overcrowding and industrial pollution of growing Victorian cities and a call for a return to pre-capitalist forms of production.
Ebenezer wrote in 1898: "Human society and the beauty of nature are meant to be enjoyed together," and "Town and Country must be married, and out of this joyous union will spring a new hope, a new life, a new civilization." The first and only garden cities ever built were Letchworth and Welwyn, built in the first quarter of the last century but they did not quite match up to the ideal and soon became nothing more than dormitory towns.

There was no place in Ebenezer's scheme of things for absentee landlords and speculators; his scheme is about self-sufficiency, with industry and services providing for the needs of the local community, with profits ploughed back into community development.

George's Ebbsfleet plan describes no more than another dormitory town, the plans for which have been in place as far back as 1996. In 2012, the government and local councils agreed with the developer, Land Securities, to build 22,000 houses at Ebbsfleet. (We must have missed George announcing that one.) The fact of Land Securities's involvement clearly rules out applying a 'garden city' tag to Ebbsfleet. And let us not overlook the £4000 per house subsidy that George is kicking in, just to encourage Land Securities to build on a low-lying swamp.

And the only reason there is a HS1 train station at Ebbsfleet, in case you have ever travelled to France and wondered why you are stopping at a station where no gets on and no one gets off, is because Michael Heseltine once dreamed of building a financial centre there. Well, that did not happen but promises have been made to the builders and HS1 needs the revenue. The high speed line has been a flop and George is now promoting it as a commuter line "just 19 minutes to St.Pancras".

Asked why Ebbsfleet had been chosen as the location, Osborne gave the Andrew Marr show a pathetic set of reasons for choosing the location:

"In Ebbsfleet there is the land available, there is fantastic infrastructure, with a high-speed line. It's on the river, it's in the south-east of England, where a lot of the housing pressure has been, and, crucially, we've got local communities and local MPs who support the idea."

In fact, the government have already considered far more desirable locations for new building. A Whitehall report recommended they be built in Buckinghamshire, Warwickshire or Oxfordshire. The report was drawn up after Dave gave a speech two years earlier in support of reviving the idea of garden cities to address 21st-century housing needs. Nick Clegg gave his support to the report, "As a government we are committed to publishing a prospectus on garden cities, which I very much hope we will do as soon as possible.” In seems clear that this report will not be seeing the light of day before the 2015 election, Dave would not want to upset all those Tory voters, especially those in Witney. And in case you are wondering, the swamp dwelling denizens of Ebbsfleet are unmoved by the prospect of a new housing development, their idyll of 18th century arts and crafts living was crushed with the building of the Blue Water shopping centre.


Every day in the newspaper you will read someone saying that the answer to our housing problems is to build more social housing. The government says and keeps saying that it intends to but doesn't. However the voices calling for a social house building programme are overlooking the behaviour of local authorities, who don't want more social housing. You don't have to go to Kensington and Chelsea for evidence, try Cornwall, where many influential voices are against social housing because they fear that the tone will be lowered by 'problem' families arriving from Kensington and Chelsea. In Cornwall house prices are high, wages are low and they prefer to keep their local housing problems hidden.

Readers' Note: Grant Shapps lost the housing brief to Mark Prisk in September 2012 but nothing has been seen or heard from Prisk, which makes us wonder whether Dave has actually told him he's in charge of housing now?