Selling expensive council houses can't accommodate the future

"What might be an appropriate tactical response in some cases could not be considered to be a comprehensive strategic solution."

According to the latest government figures, the number of households in England is expected to grow by 232,000 per year over the next twenty years. Last year, we completed just 109,000 homes, with rates falling again in the first quarter of 2012. How can we bridge this gap and what combination of tenures would best meet the needs of the population? With the economy in double-dip recession and access to mortgages constrained, most of these homes need to be for rent, although an element of housing for sale, possibly using a rent now, buy later model, would help to ensure more balanced communities.

A recent Policy Exchange report proposes that the volume of affordable housing could be increased by at least 80,000 homes per year by selling off social housing properties in high-value areas and replacing them with new homes in low-value areas. This might be an appropriate tactical response in some cases but could not be considered to be a comprehensive strategic solution to providing sufficient affordable homes.

There are a few difficulties with the Policy Exchange approach.

Firstly, it is a reactive approach that can only come into play once a home becomes vacant, so it is difficult to plan a new development when the timing of the cashflow to fund it is so uncertain. Inevitably, there would be a delay with fewer affordable homes available, before the new homes could be constructed.

Secondly, over the long term, we risk denuding high-value areas of all affordable housing, pushing families on lower incomes away from their places of work, reducing their disposable income and putting additional pressure on the transport system. It would also create greater pressure on public services in low-value areas. Having said that, many social landlords are making judgements about the appropriateness of their existing stock as they become empty, so this approach is already in place in some areas. Alternatively the homes may be retained by the landlord but let at 80 per cent of the market rent, which would generate a better income stream for the landlord while retaining the housing mix in the area.

The efforts of the coalition government to encourage house building, by streamlining the planning system and giving some support to stalled schemes, have failed because they are largely relying on the private developers to deliver the increase and they will only build where they can make a profit, difficult when first-time buyers find it so difficult to access mortgage finance. There are few private companies undertaking development for rent so this is a gap in the market that social landlords could exploit, at the same time as making a significant contribution towards bridging the gap between the number of new homes and new households.

Housing associations have access to relatively cheap finance, they have established development teams who know their areas and have good relationships with local councils, and they have the scale and housing management expertise to manage a large portfolio of rented stock efficiently. Under the current Affordable Homes Programme, most new affordable housing is being let at 80 per cent of market rent, well above social housing rent levels in most areas. This model requires relatively little capital subsidy (in many cases, none) but the higher rent levels are increasing the housing benefit bill for households on low incomes. Indeed the properties in high-value areas could be relet at market or sub-market rates and the cashflows from these used to support borrowing to build more homes.

Using their scale, financial strength and community knowledge, housing associations should be able to increase the volume of new rented housing without subsidy, while still being able to let at rents a little below the market rent level. These should be secure homes in which families could remain long-term without the fear of being pushed out at the end of a fixed-term tenancy introduced under the current regime. There would also be no requirement to means test the tenant population to identify the high earners who would be paying higher rents under the proposed “pay to stay” policy.

The government has begun to recognise that increasing the rate of house-building would also have a significantly positive effect on the economy, reducing unemployment and largely sourcing materials from within the country. An announcement is expected soon that the government will guarantee housing association loans, enabling them to further reduce the cost of capital and thus their costs of development. This is an opportunity to scale up the delivery of new homes for rent well above the level envisaged in the Policy Exchange report.

A man walks in late afternoon sunshine on the Heygate housing estate near Elephant and Castle on February 11, 2010 in London, England. Photograph: Getty Images

Chris Mansfield is a managing consultant at Hargreaves Risk and Strategy, a consultancy working in the housing association sector.

Photo: Getty
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How our actual real-life adult politicians are mourning Big Ben falling silent

MPs are holding a vigil for a big bell.

Democracy in action in the Mother of Parliaments has always been a breathtaking spectacle, and today is no exception. For a group of our elected representatives, the lawmakers, the mouthpieces for the needy, vulnerable and voiceless among us, will be holding a silent vigil, heads bowed, for the stopping of Big Ben’s bongs for four years.

That’s right. Our politicians are mourning an old bell that won’t chime for a limited period.

Here’s everything ludicrous they’ve been saying about it:

“Of course we want to ensure people’s safety at work but it can’t be right for Big Ben to be silent for four years.

“And I hope that the speaker, as the chairman of the House of Commons commission, will look into this urgently so that we can ensure that we can continue to hear Big Ben through those four years.”

- The Right Honourable Theresa May MP, Prime Minister of the United Kingdom of Great Britain and Northern Ireland, head of Her Majesty’s Government.

“There’s going to be a small group of us standing there with bowed heads in the courtyard… a group of like-minded traditionalists.

“We’re going to be gathering outside the members’ entrance, gazing up at this noble, glorious edifice, listening to the sounds rolling across Westminster, summoning true democrats to the Palace of Westminster.

“We’ll be stood down there with heads bowed but hope in our hearts.”

- Stephen Pound, Labour MP for Ealing North, Shadow Minister for Northern Ireland Where There Are Actual Issues.

“Why can’t they switch the bells back on when they stop working at 5pm or 6pm or whenever it is? Also why is it taking four years?… My own view is that Big Ben, whether it be the Elizabeth Tower or indeed the bell inside, it’s not just one of the most iconic British things, it’s one of the most iconic world things, it’s on a Unesco site.”

- Nigel Evans, Conservative MP for the Ribble Valley and Adult Human Person.

“Four years to repair Big Ben?! We could have left the EU twice in that time.”

- The Right Honourable Lord Adonis, formerly of the No 10 Policy Unit and ex-Secretary of State for Transport.

“I think Big Ben ought to be kept striking as much as possible during the repairs as long as it doesn’t deafen the work force.

“It would be symbolically uplifting for it to sound out our departure from the EU as a literally ringing endorsement of democracy.”

 - The Honourable Jacob Rees-Mogg, Conservative MP for North East Somerset and Our Future Overlord.

“We are being liberated from the European Union superstate and Britain will again be a completely self-governing country. Where will the eyes of the world be? On Parliament and Big Ben. It would be very strange if at midnight on that day it does not chime out, very bizarre. It is the heart of our nation.”

 - Peter Bone, Conservative MP for the Unfortunate Doomed of Wellingborough. 

Others have responded:

“[Silencing the bell is] not a national disaster or catastrophe.”

- The Right Honourable Jeremy Corbyn MP, Leader of Her Majesty’s Most Loyal Opposition (to broken clocks).

“When you see the footage [on Monday] of our colleagues who gather at the foot of Big Ben you will not see too many colleagues who have careers ahead of them.”

- Conor Burns (by name and by nature), Conservative MP for Bournemouth West and Parliamentary Private Secretary to the Foreign Secretary.

“I think we should respect people’s health and safety while we’re at work.

“To be honest, there are more important things to be worrying about. We’ve got Grenfell Tower, we’ve got thousands of people across our country let down who don’t get access to proper mental health care, and so on and so forth.

“Quite apart from what’s happened in Barcelona, let’s just get a life and realise there are more important things around.”

- The Right Honourable Norman Lamb, Liberal Democrat MP for North Norfolk, former Health Minister, and National Voice of Reason 2017.

I'm a mole, innit.