Don't leave house building to the house-builders

Give people a driving seat in housing investment, writes VMC Rozario.

The reality is mortgage finance is never going to get back to the heady days of the early 2000s, nor should it. But with rents rising, saving for a deposit when a lack of supply keeps prices overinflated seems impossible.

I'm part of Generation Rent, a generation unable to access social housing or mortgage finance and left paying more per month for housing than any other group. But I'm also part of a growing generation of people that, unlike their parents, need to find our financial security in something other than the bricks and mortar of their own home.

Whatever the larger debate, we need more homes all sorts of homes, for rent, socially and privately, and to buy.

The question becomes where will this investment come from?

The London Mayor wants a £1.3bn rebate in stamp duty from the Treasury to build 1 million homes by 2050. Yet with the banks holding back on lending and the Government set against going back to a pre-2010 situation of more public subsidy for capital investment in social housing (despite the economic evidence that it could be the short-term kick the economy crucially needs).

Political parties are desperate for a quick fix to this investment problem. Institutional investors, like pension funds, have been incredibly slow to come to the table to kickstart building.

Perhaps we would be better off crowd sourcing investment from the public directly.

There are a growing number of success stories of start-ups who have gone directly to large groups of ordinary savers/investors through websites like Kickstarter. Although the model isn't directly transferable, the principle is. Get people to invest in housing other than their own. Around 1 million plus private landlords in the UK are doing and making a profit out of it, so why not make more of us landlord investors?

That doesn't mean becoming a country of buy-to-let investors, but if more people want to invest in housing other than their own why not tap into that?

Some might scoff at the idea given the economic climate but actually there are two things that mean we should look at it seriously. Firstly we already have a model of public savings that has grown in sufficient volumes to take seriously.

When Premium Bonds were created by Harold Macmillan government in 1956 the aim was to control inflation but also to encourage saving in post-war Britain. On their first day £5 million worth of bonds were sold and by 2006 improvements in accessibility and a desire for safer investments than the stock market saw 23 million people (then around 40 per cent of the British public) hold premium bonds.

The ability to bring together savings from such a broad section of society (1.6 million of those bond holders had saved only a reasonable £5,000) should be something to replicate in housing investment, especially as housing is relatively stable and long-term investment.

Now National Savings and Investments manage over £100 billion in ordinary people's savings. Imagine if a separate housing fund was launched. There is something powerful about the idea of a family growing into habit of saving, with the added bonus that their investment has helped a housing association deliver them a home and keep house prices and rents down is a bonus. Unlike dead rent, in time those savings could fund a deposit on their own home, university fees or even retirement costs.

The second indicator that this general idea, people investing in housing other than their own, needs closer inspection is that where housing associations have dipped their toes in retail bond issues they have generally had their feet bitten off. Steve Binks, Places for People's Finance Director told the Communities and Local Government Select Committee last year about their experience of reaching out to private investors:

We went out with a relatively small issue, or ambitions for a relatively small issue of £25 million to £50 million. That was our initial asking and we were surprised-almost overwhelmed-by the demand. We ended up raising £140 million in two weeks from people who would invest money with us for five and a half years, put it into an ISA at-I think the interest rate was 5 per cent.

Moreover there's enormous scope of innovation and creativity in this space to give ordinary people a stronger say in housing investment. More work should be done to think and test how this could help communities fund more housing locally, how housing associations could come together to utilising the wealth of savers in the south east (who unsurprisingly save the most) to fund affordable housing across the country and how investments could be made as easy to buy and manage as a premium bond.

A sign marks a plot for sale on a housing construction site on in Swindon, England. Photograph: Getty Images

V M C Rozario is a pseudonymous former housing professional and a member of Generation Rent.

Paul Farrelly
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I represent a Leave constituency - but I want to delay triggering Brexit

Unlike most of his colleagues, Labour MP Paul Farrelly refused to vote for starting Brexit negotiations in March. He explains why. 

Not quite top marks, but eight out of 11 will do - for the justices on the United Kingdom Supreme Court, who have ruled that our country remains, indeed, a parliamentary democracy. 

Furthermore, they have ruled that legislation is necessary to trigger Article 50, which starts the Brexit process, not simply a plebiscite, nor a government diktat fancifully dressed up as a "royal prerogative".

Last June, my constituency of Newcastle-under-Lyme in the area home to the historic potteries industry voted 61 per cent to 39 per cent to leave the European Union. Yet in December, I was one of just nine Labour MPs to vote - twice - against rushing for the door by the end of March, come what may.

It was the third time since 2015 that I’d defied the Labour whip (quite modest compared with our leader’s record). The last was when - with the Tories’ true statesman, Ken Clarke - I refused to vote for the legislation paving the way for the referendum in the first place. 

I thought it a reckless gamble with our country’s future, which profoundly disregarded the lessons of the past. Six months down the line, I now realise that, of the "December nine", I was the only one with a Leave majority (though not a majority of all voters) in my seat.

Why? Was it a political death wish? A deliberate slap in the face for my electorate, who have returned a Labour MP now since 1919?

No, it simply made no coherent sense to hand the government a blank cheque before Christmas, before we'd seen what Prime Minister Theresa May wanted to achieve, and given our verdict in the national interest. 

Does that make me – like the judges again, no doubt, according to Ukip, some Tories and the Brexit press - an "enemy of the people"? Certainly not. 

My parliamentary next door neighbour Sir Bill Cash, doyen of the anti-EU lobby, has spent the last 40 years defying the "will of the people" from the overwhelming 1970s referendum. So I think we "rebels" can be cut a little slack for wanting to ask a few hard questions to hold the government to account.

On the face of it, Labour’s continued, official support for the government’s timetable renders today’s Supreme Court verdict of little practical consequence - in the Commons, at least. 

In December, our front bench had tried to be clever, crafting a mild motion calling for debate on a published plan before Article 50, to stir a Tory rebellion. But the PM smartly agreed to the demands, tacked on her timetable and Labour got trapped into riding her coat-tails. 

But at least now, through amendments to a government bill, we’ll have the chance – and so will the Lords – to influence the terms of departure, and who in the future has the final say.

In the PM’s speech a fortnight ago, I was pleased with her commitment to protecting the UK’s science base. Last week, I was at the opening of the fifth Innovation Centre at Keele University’s Science Park on my patch, for which European funding has been vital. That’s been hammered out, until 2020, but what happens further out is wholly up in the air. 

I was happy as well, of course, with the passage on workers’ rights. Ten years ago, I introduced the Private Member’s Bill to stop abuse of agency workers – a Labour 2005 manifesto commitment – which was then delivered at European level. That was aimed directly, too, at tackling the sort of levelling down that, all those years ago, was already stoking anger at immigration in areas like mine.

But these were, really, just warm words for the wider audience. The key concerns for our industry, local and national, about tariff-free trade and access to the single market are still there in spades. And in the 21st century economy, we have not squared "control of our borders". The demand for skills, not least when incomers from outside the EU – the element the government ostensibly can limit – formed the majority in the last statistics.

The reality is that, once Article 50 is triggered, the government will not control the agenda.  That will be in the hands, like it or loathe them, of the other 27 member states. 

The PM’s statement was workmanlike, with no real surprises; but what hardly helps the negotiations are the frenzied Noises Off-style gaffes. For Boris Johnson to liken any French President, on his way out or not, to a Colditz camp guard just stores up more trouble for tough times ahead.

In my formative years, way before politics, I organised international youth exchanges. Every summer, teenagers from all over Europe gathered to tend war graves in Berlin – where wounds of conflict were still fresh, and the Cold War divided the city by the Wall. 

My involvement came from growing up in Newcastle - in Staffordshire, where the German cemetery from both world wars lies next to the Commonwealth memorial on Cannock Chase. I grew up believing that the European Union and its forerunners, for all their frequent frustrations, were part and parcel of the architecture of peace, not just prosperity. 

Those loftier arguments, however, got lost sadly in the bewildering trading of facts and fictions in the referendum. "Turkey, population 76 million, is joining the EU. Vote Leave." Well no, it’s not, but those huge, bright red posters certainly changed the tone of the debate in the last few weeks on many a street last June, not just in Newcastle-under-Lyme.
 
After a narrow 52 per cent to 48 per cent Leave vote, we are now, though, where we are. 

For Labour, on our front bench Keir Starmer has been trying to make the best of a bad hand. Thanks to the Supreme Court, he now has an extra card. But I still just don’t like the way the dealer has stacked the deck.

Paul Farrelly is the Labour MP for Newcastle-under-Lyme. He has sat on numerous select committees, and currently sits on the Culture, Media and Sports committee.