The 2018 housing review of the year
In an exclusive article for HQN members, Jules Birch reflects on an eventful year for the housing sector and looks ahead to what’s in store in 2019.
What’s in a name?
In a world of endless rebrands and relaunches it was easy to be cynical in January when the Ministry for Housing Communities and Local Government and Homes England emerged blinking into the limelight.
Yet as the previous names of the department and agency responsible for housing disappeared into the dustbin it still felt like a significant moment: for the first time in more than 40 years, housing was back at the Cabinet table, a secretary of state featuring it in his title; and the new departmental moniker recalled the glory days when council housing had support across the political spectrum.
At the same time, the ugly duckling of the Homes and Communities Agency was reborn as the slightly self-regarding swan of Homes England, with more funding and a brief to ‘fix the broken housing market’.
Housing minister revolving door
If 2017 had sent housing soaring up the political agenda thanks to the shock of the election result and brought social housing back on to the radar after the disaster at Grenfell Tower, then 2018 seemed to be starting as the government meant to go on. Or at least it did for the few days it took for the revolving door at Marsham Street to swing shut behind the latest ex-housing minister.
Alok Sharma had been plunged in at the deep end when he was appointed in the same week as the Grenfell fire but had impressed with his willingness to listen to tenants at a series of roadshows ahead of the social housing Green Paper. Now he exited stage right to the Department for Work and Pensions (DWP), pursued by Universal Credit.
Stepping into his shoes was Dominic Raab, an ambitious Brexiteer but not a man noted for much previous interest in housing. Sure enough, one of his first acts as minister was to insist his officials brief him on the impact of immigration on house prices so that he could feed a headline to the Sunday Times.
An increase of £11,000 sounded a lot but on closer examination it turned out to be just 8% of the total increase in prices over the last 25 years. The ultimate source of his information? A report from a quango created under Labour that had been abruptly shut down by Grant Shapps and Eric Pickles in 2010.
It was possible to dismiss much of this as distraction at the time. His boss Sajid Javid remained in place as housing secretary with the Cabinet rank and apparent determination to drive through his promises to fix the broken housing market and publish a Green Paper to fix social housing.
But then he too was reshuffled to the Home Office to be replaced by James Brokenshire. A Theresa May loyalist returning from a successful battle with cancer, he seemed dull and uninspiring. However, where Javid had sometimes given the impression of doing just enough to look like he was doing something, he turned out to be unafraid of decisions his predecessor had shied away from on issues like a ban on combustible cladding.
Raab himself lasted a mere 181 days before being promoted to become Secretary of State for Leaving the European Union, the job he really wanted but ended up resigning from when it turned out that the job description turned out to be more like literally secretary.
And so it was hello to Kit Malthouse, a former Westminster councillor who wins the housing minister of the year award by virtue of being still behind at his desk.
With ministers coming and going as rapidly as football managers, it would be easy to dismiss 2018 as a wasted year but look back at the last 12 months and there is solid evidence of progress. Housebuilding numbers are rising, if not yet anywhere close to the government’s target of 300,000 a year.
A review by former Cabinet minister Sir Oliver Letwin advocated radical reforms of planning (though not land) to get large sites built out quicker. And several of the (anti-) social housing policies that David Cameron and George Osborne had taken from the backs of envelopes at right-wing think tanks moved from the back burner to the incinerator.
The non-implementation of the forced sales levy for council housing and repeal of mandatory fixed-term tenancies for new council tenants were confirmed when the Social Housing Green Paper was finally published in a ‘housing week’ hastily organised when most people were on holiday in August.
That in turn implied the end of the extension of the Right to Buy to housing association tenants (which the levy ways meant to pay for). And the Green Paper also backtracked on more of the Shapps-Pickles vandalism from 2010, proposing more powers for the regulator of social housing and new rights of redress, and maybe even national representation for tenants.
True, there were groans when it also confirmed plans for league tables of social landlords – evidence from schools and hospitals suggest managers much of their time gaming the system – but there was also a startling proposal to link grant to how tenants rate their landlord’s performance.
The shadow of Grenfell
All this, of course, came from a government desperate to show that it was listening to tenants in the wake of Grenfell.
The year began with painfully slow progress on the removal of dangerous aluminium composite material (ACM) cladding and carefully calibrated non-commitments from
ministers and continued with a series of cases of leaseholders facing huge bills for the replacement of ACM on their blocks.
It ended with confirmation of a ban on combustible materials on new residential buildings over 18m, and Westminster backing for local authorities to take action on private blocks where owners were dragging their feet.
And all the while the Grenfell inquiry continued with tales of tragedy from survivors, controversy over stay-put advice to residents and evidence from experts that revealed failures at every conceivable level in the refurbishment of the block in what one of them called Grenfell’s ‘culture of non-compliance’.
Grenfell will continue to cast its shadow over the sector for years to come, regardless of what and who the inquiry eventually finds was to blame.
A grim reminder of this came in May with the 50th anniversary of the collapse of Ronan Point, which was until Grenfell social housing’s worst disaster – incredibly half a century later there are still concerns about the structural safety of large panel system blocks.
The impact of Grenfell was felt not just in the national Green Paper but at a local level too, as the Royal Borough of Kensington and Chelsea appeared to recast its entire housing policy to put residents first.
Where once it had seemed committed as anywhere else to the regeneration of what David Cameron had notoriously called ‘sink estates’, now it pledged that ‘we will refit and refurbish, but not remove and rebuild’.
And council leader Kim Taylor-Smith even launched a stinging attack on England’s biggest housing association, Clarion, over its ‘morally wrong’ redevelopment plans for the Sutton estate in Chelsea.
Back in the game
That came in the same month as perhaps the biggest surprise of the year as the prime minister used her party conference speech in October to announce what everyone was hoping for but did not quite believe would ever happen: the end of the borrowing cap on council housing.
The impact of this measure on the ground remains to be seen – the Office for Budget Responsibility poured a bucket of cold water on expectations of an extra 10,000 council homes a year by predicting the policy would produce just 9,000 by 2023/24 and many local authorities have already set up housing companies outside of the Housing Revenue Account system – but the symbolism was undeniable.
A Conservative Party that had spent decades cutting what it could not sell off and selling what it could not cut had only grudgingly allowed councils back into the game.
It had introduced self-financing in 2012 but with caps imposed on the borrowing it still did not trust local authorities to do wisely. The caps were raised in the 2017 Budget but even in January this year the housing minister was telling MPs that scrapping them would be unsustainable.
But things were changing quickly. Bidding for the increased caps was over-subscribed by many times. In August the housing secretary even harked back to the glory days of Harold Macmillan when he quoted the 1951 Tory manifesto on housing being ‘the first social service’ in the Green Paper.
In September, Theresa May spoke at the National Housing Federation’s conference (a first in itself), heaped praise on housing associations and social housing and even preannounced £2bn worth of long-term funding.
And behind the scenes a cross-party campaign fronted by the irrepressible Conservative chairman of the Local Government Association Lord Porter had finally paid off: the caps would be scraped more or less immediately, and without any of the usual Treasury strings.
And yet for all that good news the future of housing remains uncertain and dark clouds are gathering on the political horizon.
For all the positive messages in the Green Paper, there were still some wrong notes: fighting stigma with street parties and neighbourhood competition; and valuing social housing in one breath but saying it should be a springboard to home ownership with the next.
Worrying evidence emerged about the quality of homes in offices converted via permitted development even as the government planned an expansion of the deregulated system and as private equity continued its expansion into rented housing the government called for proposals for private shared ownership.
The impact of years of austerity continued to be felt in levels of homelessness and rough sleeping. For all ministers’ enthusiasm about Housing First and the Homelessness Prevention Act ‘welfare reform’ continued to make things worse.
The benefit freeze is set to continue until 2020 after the chancellor rejected the chance to soften it in the Budget, more or less guaranteeing that the end of a private rented sector tenancy will continue to be the single biggest cause of homelessness.
The benefit cap and the bedroom tax continue to turn the screw on disabled families and single parents with young children.
And the roll-out of Universal Credit continues remorselessly. For all the concessions made by ministers, for all the tweaks made to the system, the year ended with the Managed Migration of existing benefit claimants hurtling down the track and some landlords were finding the alternative payment arrangements that are meant to help vulnerable tenants even more cumbersome than the existing system.
In November, the United Nations Rapporteur on extreme poverty produced a devastating report saying that poverty levels in Britain are ‘not just a disgrace, but a social calamity and an economic disaster all rolled into one’.
The government has ‘stubbornly refused to see the situation for what it is,’, said Professor Roger Alstom, and ‘remained determinedly in a state of denial’. Needless to say, the DWP denied it.
The B word
But few at Westminster had much attention to spare for anything other than Brexit and even fewer could confidently predict whether the outcome would be a Deal, No Deal, Canada, Norway, a general election or a second referendum.
Warnings from the Bank of England of a house price collapse in the wake of No Deal were starting to concentrate minds in a social housing sector far more reliant on market sales than it was in 2008.
If January saw the collapse of the outsourcing giant Carillion, a dire warning of what can go wrong, then at least housing could give thanks that it had never adopted the Private Finance Initiative on any scale.
As the year drew to a close there was news of a 39% increase in the number of affordable home ownership units unsold for more than six months. And that potentially troubling taste of things to come was put into perspective by shocking official figures showing almost 600 homeless people on the streets or in temporary accommodation in 2017, an increase of 24% on five years ago. Only two days before, James Brokenshire had told The Guardian that he saw the huge increase in rough sleeping since 2010 as the result of a combination of addiction and family breakdown rather than government policies. By Christmas Eve he was admitting that the Conservatives ‘need to ask ourselves some very hard questions’ about the issue and saying that changes to policy were needed.
Whoever the ministers are, and whatever the departments they run are called, it was a worrying end to a year that had generally brought more good news than bad.
However, rough sleeping and homelessness are just two of the big issues on his agenda for 2019. With consultation responses due on the social housing Green Paper, regulation, leasehold reform and longer private tenancies there too, not to mention the aftermath of Grenfell and housebuilding delivery, good intentions will only go so far.