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MPs have made £42m profit from second homes

If you think our industrious MPs are already busy enough with Brexit, spare a thought: they’ve also got to manage the process of profiting from their second homes!

According to a Mirror investigation, our dear leaders have collectively made £42 million in profit from selling their taxpayer-subsidised second homes.

One beneficiary is hot/cold Brexit fan Michael Gove, who has apparently made £870,000 from two homes. Nice!

But that’s small beer compared to ex-Cabinet minister Maria Miller, who made more than £1.2m from some slick second home sales work.

Though under parliamentary rules the 160 profiteering MPs are allowed to keep the money, naturally, critics are urging them to hand it back, what with trust and patience levels at record lows amongst the public.

One of these critics is the unimpressed Sir Alistair Graham, former chairman of the Committee of Standards in Public Life, who said: ‘You should not be profiting out of special taxpayer funds; you should repay any gain you made over that period.

‘The arrangement was made purely to take into account MPs who came from the North who would struggle to meet the housing costs.

‘It would need to be carefully ­calculated, but Independent ­Parliamentary Standards Authority has done this before and they can do it again.

‘I don’t think anything will restore trust – it’s at such a low ebb – but it’s the right thing to do.’

According to the investigation, MPs made an average profit of £255,000 on selling their  homes.

Interestingly, second home-selling Labour MPs made an average of £193,000 profit, while Tories floggers made a average of £417,000 – so maybe there’s something in the old myth that conservatives are better with money?

 

Social landlords are building homes and boosting finances – yet are still being slammed. Why?

By Alistair McIntosh, HQN CEO

Associations are working harder than ever to bulk up financial strength and build more homes. So why are you getting criticised so much?

In many ways, you are trapped by a couple of paradoxes. To get stronger you may need to merge, and that means you deal with a wider set of people in many different places.

Can you keep them all happy? It’s a tall order. You try to build homes quickly and that means working with developers. Time and again their standards of building fall well short of what any reasonable person would expect.

All too often it’s the association that gets hammered as the developer runs for cover. Then you try to sell homes to subsidise rented ones. And those leaseholders go over every bill you send with a fine toothcomb, as is their right.

So, you wind up covering bigger areas than ever and managing the expectations of a wider demographic than you imagined you would. In many ways, that’s all good news.

But in the days of phone cameras and social media, everyone is a journalist. If you screw up, there is no hiding place. And the board and chief executive are usually the last to know. On top of this we have febrile politics. So Momentum and others are boosting tenant campaigns. And there’s no point whinging about this as that’s their job.

So, what do we do about it? That’s what our reputation management event in London this month will explore.

There is no doubt that we are losing the reputation battle. We’ve seen savage criticism from MPs, massive social media campaigns, tabloid exposes and brutal documentaries on UK and even Russian TV lambasting us. It’s painful to watch, regardless of the rights and wrongs of it.

The housing minister, Kit Malthouse, tells us he’s tired of being the post bag for complaints about his local associations. But he also praises L&Q for their honesty and determination to sort things out. That’s why we’ve invited L&Q to share their learning – good and bad – at this event.

Karen Buck will also tell you about her vigorous work over many years to make sure social and private landlords do the right thing for her constituents. All too often, it’s been an uphill struggle. What are her dos and don’ts?

This won’t be a day for the fainthearted. You’ll hear a lot of home truths. As you know, there are plenty of well-funded private landlords waiting in the wings to replace you. It’s essential that we recover our reputation to prove that councils, associations and ALMOs are the best option. We’ve a lot of ground to make up and our speakers will help you to do that.

Hosted by communications expert Helen Reynolds, our ‘Reputation rollercoaster – how to stay on track’ will cover:

  • How to build a trusted brand
  • Practice what you preach – clarity of mission and sticking to your values
  • Putting residents at the heart of decision making
  • The importance of engaged employees and a happy workforce
  • Stakeholder engagement strategies – working with politicians and the media
  • Making social media a friend not an enemy
  • Understanding where reputational risk comes from and how to deal with it

To learn more and to book, click here.

 

 

 

Towards a housing finance system that works

By Alistair McIntosh, CEO HQN

It’s baffling, isn’t it? You go to see a housing association and they tell you how hard it is to get social rents to stack up. And they’re right. Then you read the new Shelter report which says social housing pays for itself. And they’re right too. How can this be?

It’s because we are looking at everything the wrong way. Shelter is bringing in the savings to benefit bills from charging social rents instead of private rents. They are saying that this is how the Treasury should do its sums.

That’s how to get to the true costs and benefits. But this is not part and parcel of the viability appraisals done by individual associations. And for a very good reason. As things stand it doesn’t matter a jot. They stand or fall based on their own accounts, not those of the UK. This is what is leading to short-term every-man-for-himself thinking. It’s got to change. We must take the blinkers off. And we are not the only ones.

Hitachi is telling our government that they’d get things done faster if they just bit the bullet and nationalised big projects. Of course, they are talking about nuclear power stations. But there is something in this for us, too. If we are building new towns or doing a complex regeneration, it could be a good idea to get government to hold the ring. The risk is just too big for associations, councils or companies to take on by themselves. Something is bound to go wrong. It usually does. You will always hit technical problems that you didn’t foresee. That’s just the way it is. And if you are relying on profits from sales, that will come back to bite you at the worst time.

A few years ago, I was talking to some tenants on an estate that was going to be flattened. And, boy oh boy, did it have issues. Something needed to be done. The developers were promising to replace it with the New Jerusalem.

Yes, every tenant would get a splendid new home. It did look very exciting. What did I say? Don’t bother listening to these promises. The people making them will not be the ones delivering them down the line. There will be some type of cock-up and the plans will change.

It won’t be for the better. The risk would be a lot less if the state was in charge from the get-go. And of course it would bring in investors and experts to do the day to day lifting. If we gave tenants firm promises at the start we could break some logjams, couldn’t we?

So, for the really big stuff I think we do need to look to government. But most of the time councils and associations are the right answer. The Green Paper needs to make them more accountable. But how do we put them on a better financial footing? We need a new financial regime for housing.

At the moment we have a clash. Housing associations and councils struggle to put the money in place to build homes at social rents. It doesn’t stack up. Yet the Treasury should be crying out for them to save money and boost the economy. How do we get back on track?

First things first. The Treasury should run a check on the Shelter figures. They will be right as Capital Economics put them together and they are a top-notch outfit. But there is always room for debate on these things as there are so many assumptions about what happens and when. So knock the heads together and just agree a figure on the savings and use it to boost the grants to councils and associations today. That’s a quick fix.

But we also need to change how we do accounts for social housing. These need to show the savings to the benefits bill of low rents. And landlords must be compensated for this by the government so they can stay viable. According to the Shelter figures, there should be enough money in there to keep the landlords and the Treasury sweet.

Does this sound fanciful? Well, it’s the best I can do. And it’s a hell of a lot better than going on a roller coaster ride of relying on sales. You’re bound to come off at some point. It’s time for a fresh start. We will need to save money and boost the economy under Brexit. Cutting rents and building homes is a win-win. Go for it.