Penfold Associates

The last CIH Conference before the 2015 general election started with Grania Long challenging the political parties to come up with a housing system that works for everyone and provides a “comprehensive, holistic, long term strategy that operates across all tenures, all geographies and all income levels”.  She said: “Our political leaders can and must do better”.  In the meantime she implored the current coalition government to do four things:-

• Get more active on housing supply and set a national house building target
• Exert control over the mortgage market
• Treat housing as part of the country’s essential basic infrastructure
• Defend the need to increase supply against critics and include social housing as a vital part of that growth.

Perhaps not surprisingly, the politicians failed to make a full response – all parties are still working on their 2015 offer to the electorate.  Emma Reynolds said a Labour government would set a standard methodology for local authority housing needs assessment but would retain the National Planning Policy Framework (NPPF).  She said more planning reforms would come from the Lyons review and promised that Labour would actually achieve one-for-one replacement of RTB sales.  Former Labour housing Minister John Healey supported the SHOUT campaign and said it was as much a call to Labour for more investment in housing as it was a call to the Coalition.  For the Conservatives, Eric Pickles defended the government’s housing record and made announcements on Build to Rent, Custom Build, estate regeneration and a fund to speed up local authority planning performance.  He pointed to increased new house building as a sign that the government’s economic policies are working.  Pickles also denied that there is a housing bubble.   Kris Hopkins announced that 75% of AHG would be paid up-front to providers until March 2015 to speed up the final phases of the current programme.  He stressed the importance of homelessness prevention and said LAs should make more use of well managed private rented sector stock for homeless people.  He also said councils would make the case for raising HRA borrowing caps if they used what is already available.  Conservative Home blog editor Tim Montgomerie defended the objective of the bedroom tax in addressing under-occupation but said it should only be applied if tenants refused an offer of suitable alternative accommodation.  Tory peer Daniel Finkelstein said any government coming to power in 2015 will have to cut expenditure and this is bound to affect the poor.

Other points of interest:-

• Andrew Sentence (ex-BoE now with PwC) said the developing property bubble in the south east could spread if interest rates do not rise and said he favoured an increase in rates over measures such as limiting loan to value ratios.  He said the “new normal” for the economy is growth at pre-recession levels.  Steve Wilcox (University of York) felt interest rates were too crude a tool as they would affect the whole country
• Government advisor on the private rented sector Andrew Stafford said £10Bn was available for investment in the sector with the second round of Build to Rent attracting 126 bids totalling £3Bn.  He stressed the important future role of a professionally managed private rented sector with purpose-built stock.
• Robin Wray of Family Mosaic proposed fixed term tenancies as a solution to scarcity on the basis that they help people in need when they need it but they can later move on.  Barbara Houghton of Riverside said they use FTTs in more affluent areas with better job opportunities.
• The Care Act 2014 responsibilities of landlords to vulnerable tenants suffering abuse were highlighted, including the duty to have plans linked to local adult safeguarding boards.
• Alison Graham of CPAG claimed affordable rents are linked to increasing child poverty.
• Julia Unwin (Joseph Rowntree Foundation) said the state was not so much abandoning the poor as it was increasing control over their lives.  She called for an approach that offers protection but does not threaten destitution for non-compliance.
• Dave Cowans (Places for People) said government should boost housing production regardless of tenure.  He said housing associations will benefit from S106 again when house building expands.
• Andy Rose (HCA) said the sector must be realistic in what it can expect from government.
• Information Commissioner Christopher Graham said it was “bizarre” that the Freedom of Information Act does not apply to housing associations.  He said its application to contracts delivering public functions was under consideration.
• Phil Jenkins of Centrus Advisors criticised HCA caution over index-linked finance as restricting development but the HCA position is that they examine cases on their merits.
• Anne Power (LSE) said garden cities were environmentally damaging, expensive and slow to build.  She said they were not the answer to the housing shortage.
• John Dickie of London First said that if London has its own unique housing market it should have its own housing policy … but many would argue it has had one for years and the rest of the country needs one!
• The Treasury review of HRA borrowing powers shows that 42% of LAs are paying off loans and not investing in new stock, leaving £1Bn in unused borrowing capacity.
• Nigel Wilson (Legal and General) reported that a mass of institutional money is available for investment in housing and could boost production above 250,000 per annum.  He called for more flexibility on land use including demolition of redundant town centre property and redevelopment for housing.
• Gill Leng (Public Health England) said health and wellbeing needs to be at the core of HA values if they want government cash.  Carol Matthews (Riverside) said HAs need to understand the language of health and care.  She stressed that extra care is a niche market and most people want to end their lives in their own homes.
• “Communities Count: the four steps to unlocking social value” was launched at the Conference.  It links social value to the delivery of better services and increased resident satisfaction.  It recommends HAs adopting a social value policy (37% have one) that sets out how they will support and use social enterprises.
• Not surprisingly, the Cosmopolitan governance failings described in Altair’s report were the subject of much discussion – along with the appropriate reaction of the regulator in setting future standards and reacting to breaches.

Kim Penfold
June 2014