Posts with tag: housing crisis

Affordable Housing Firm’s CEO on What the Budget Should Include

Published On: July 7, 2015 at 4:06 pm

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Brian Johnson is the CEO of one of the UK’s leading affordable housing and care providers.

He speaks of what the July Budget, scheduled for Wednesday 8th July, should include.

“The upcoming Budget is being promoted as a stability Budget, with a continued focus on reducing the deficit,” he says.

Affordable Housing Firm's CEO on What the Budget Should Include

Affordable Housing Firm’s CEO on What the Budget Should Include

He explains what the affordable housing sector needs: “For our sector, if we’re to continue to play a major part in tackling the housing shortage, stability and certainty are key. I have written before about how we are much more affected by the cyclical nature of the market than in the past and the constraints that this can create.”

Johnson continues: “For example, if market sales slow down there will be implications for our building pipeline. Similarly, further welfare reforms – particularly the benefit cap – will impact on the number or type of affordable homes that we’re able to build.

“Even in a stable market some associations, just like commercial house builders, will begin to hit gearing constraints and others could begin to run out of security to borrow against, causing building numbers to fall off a cliff.”

Johnson says what the Budget must do: “Many of these risks can be managed but a level of certainty from this Budget and into the future will allow us to deliver more for more people. That’s why sufficient and sustainable should be the watch-words for housing, both in this Budget and into the comprehensive spending review.”

He is clear about what the industry needs: “That means sufficient funding to maintain our building pipeline and mitigate risks from big policy changes, and sustainable funding for the longer term so we can be confident when we’re writing out business plans.”

However, he says that this is not just about delivering more homes: “It is also about the real social value we deliver on the ground.”

Johnson is planning ahead: “In September we’ll be publishing a report on what more we can do as an organisation and as a sector to enable more people in social housing or receiving social care to achieve more of their own ambitions – whatever that may mean for individuals.

“In the meantime, if it is to deliver real stability in the housing sector, this Budget needs to deliver certainty as well as savings. We know the headlines that could affect our sector in the coming years: welfare reforms, changes to the Right to Buy and perhaps even moves towards greater regulatory freedoms.”

Johnson concludes: “Ultimately the devil will be in the detail and the sooner we can respond to those details and adjust our business models, the better. This is true for us but more importantly for the people we serve.”1 

1 http://www.insidehousing.co.uk/debate/expert-opinion/firm-footing/7010627.article?adfesuccess=1

Global Cities Expert Warns About Affordable Housing

Published On: July 2, 2015 at 4:57 pm

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The boss of a global cities organisation says that London must challenge the threat of social inequality.

The head of international group 100 Resilient Cities (100RC), Michael Berkowitz, says that world cities including London face a major threat if they do not address the lack of affordable housing and growing social inequality.

Global Cities Expert Warns About Affordable Housing

Global Cities Expert Warns About Affordable Housing

100RC is a $100m initiative launched two years ago and is funded by the Rockefeller Foundation. Berkowitz believes that equity and social cohesion are two of the “critical issues” faced by major cities due to the pace of urbanisation.

His cautions arrive as 100RC opens its regional headquarters in Clerkenwell to serve cities in the Middle East and Europe, including London, Bristol and Glasgow.

He warns: “Equity and social cohesion are two of the critical issues that we are seeing in resilient cities around the world. In the US, the debate is partly about recognising that black lives matter.

“London is interesting because it’s an old city, but it is growing almost at the pace of a developing world city. We don’t know what is going to hit the city next. Is it going to be a cop shooting someone in Tottenham, a major blackout or another 7/7 – who knows?

“But cities where people feel bought in can survive. Cities where you have high inequality, a lack of social cohesion and where people don’t trust the authorities – that can be a spark.”

Speaking specifically on the affordable housing crisis in London, Berkowitz says: “Everyone we talk to has mentioned this housing crunch.”

He adds that New York City has similar challenges and that Mayor Bill de Blasio is working on a major initiative to ensure that all residents live within a 40-minute commute of a good job. As well as providing affordable housing, this scheme hopes to encourage commercial and industrial businesses into other parts of the city. They are generally located in downtown and midtown Manhattan.

Berkowitz continues: “I’m generally in favour of densification because this promotes walking and cycling, but you’ve got to do this in the right way with good neighbourhoods and good streets.”1 

100RC is a global network of 67 cities and works with city mayors and public officials, as well as the private sector to address threats including terrorism, cyber-security, infrastructure and the environment.

1 http://www.architectsjournal.co.uk/8685621.article?WT.tsrc=email&WT.mc_id=Newsletter2

Cabinet Minister Will Warn that the Young Face Housing Exile

Published On: July 2, 2015 at 3:58 pm

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A cabinet minister will warn that many young people are being “exiled” from the neighbourhood that they grew up in due to a lack of affordable housing.

Greg Clark, Communities Secretary, will tell council leaders that it is a “defining test” for any government to provide homes that keep the “chain of community.”

Acting Leader of the Labour party, Harriet Harman, will tell the conference that the housing shortage is now “chronic”. She will also say that Conservative plans to extend Right to Buy to housing association tenants will make matters worse.

The four hopeful Labour leaders – Andy Burnham, Yvette Cooper, Liz Kendall and Jeremy Corbyn – will also speak at the annual Local Government Association conference in Harrogate, detailing ideas on housing and decentralisation.

In his first major speech since joining the cabinet, Mr. Clark will set out a proposal to hand powers to England’s cities and regions, pressing council leaders to “take power now [from Whitehall]”.

Cabinet Minister Will Warn that the Young Face Housing Exile

Cabinet Minister Will Warn that the Young Face Housing Exile

Mr. Clark will argue that devolving transport, skills and housing budgets to local authorities on collective and individual terms will help release economic opportunities and create “a nation of muscular communities – north and south, town and country.”

However, he will also accept the scale of the challenge that the country faces to ensure housing supply keeps up with demand and the social dislocation caused by the shortage of affordable housing to buy or rent in many areas of the country.

He will say: “For centuries, to be exiled – to be sent away – was considered to be an extreme penalty, reserved for the most serious of offences against the community.

“Yet in many parts of our country, it has become normal for young people to leave, though not out of choice. This might be to find work, but more and more, it is to find a home that they can afford.

“If we want to maintain the chain of community and a place for the next generation, then we must make sure we have the homes to welcome them to. The responsibility lies with us – national and local leaders alike.

“It is a defining test of our generation of leaders that we care for and resolve the fears and foreboding of the next generation when it comes to that most basic of questions – where and what will I call home?”1 

The amount of new homes completed in 2014 – 118,760 – was substantially higher than in 2013, but still much lower than the 2007 peak, before the financial crisis.

Ms Harman will say that Conservative plans to extend the Right to Buy scheme, by requiring housing associations to sell their properties at a discount to their tenants will “make the affordable housing crisis worse.”

The scheme would be partly funded by forcing local councils to sell off their most valuable assets when they become vacant.

Councils will then be expected to replace this stock on a one-for-one basis, however, the National Housing Federation (NHF) warns that since 2012, just 46% of homes sold in this way have been replaced, reducing the overall number of properties for rent.

Ms Harman will also say that ministers have not explained how the scheme will work, and risks worsening already falling homeownership levels and the length of time people have to wait to buy a house.

She will continue: “Ultimately, we’ll see what the Government brings forward, but the test for any housing policy must be whether it eases rather than deepens the housing crisis.

“Proposals which don’t address the key problem – the chronic shortage of homes – will see the dream of homeownership drift further and further out of reach.”1 

1 http://www.bbc.co.uk/news/uk-politics-33351686

Landlords Positive About Tenant Demand

Published On: July 2, 2015 at 1:00 pm

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Landlords Positive About Tenant Demand

Landlords Positive About Tenant Demand

Tenant demand in the second quarter (Q2) is continuing to grow, as 43% of landlords believe demand is either growing or booming, revealed research by specialist buy-to-let lender, Paragon Mortgages.

The study found that the trend for high tenant demand is strong, with continuous steady growth for the past three consecutive quarters.

This level of growth is expected to continue over the next 12 months, with over half of landlords (51%) predicting a further rise in demand.

The research also highlighted the tenant groups that landlords are most frequently renting to: Around half of landlords (47%) let to young couples, 43% to young singles and 42% to families with children.

Managing Director of Paragon Mortgages, John Heron, explains: “It is no surprise that rental demand is steadily increasing. With continued stress on the housing stock driving prices up, tough affordability hurdles for would-be buyers and a social rental sector under pressure as a result of renewed interest in Right to Buy, a steady increase in rental demand was inevitable.

“It is important that landlords continue to expand the supply of rented property in order to maintain a balance and so avoid unsustainable increases in rents. A healthy, competitive and innovative buy-to-let market is critical to this.”1

1 https://www.landlordtoday.co.uk/breaking-news/2015/6/landlords-upbeat-about-tenant-demand

Boris Johnson Will Lobby Against Right to Buy Plans

Published On: July 2, 2015 at 10:02 am

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Boris Johnson is set to lobby the Government, hoping to change its plans regarding the Right to Buy scheme extension, which would offer sales discounts to housing association tenants.

Johnson is proposing an equity loan system similar to Help to Buy, in a bid to avoid councils in the capital’s wealthiest areas from losing too much of their social housing stock.

The Conservative’s Right to Buy extension would be funded by forcing councils to sell of their high-value homes, which would include many parts of central London, to subsidise discounts for housing association tenants who wish to buy their homes.

Under the current Right to Buy scheme, council tenants can receive discounts of up to £104,000 on the market value of the house or flat that they live in. In the general election campaign, the Conservatives pledged to extend this scheme to tenants in housing association properties.

Boris Johnson Will Lobby Against Right to Buy Plans

Boris Johnson Will Lobby Against Right to Buy Plans

The party also promised that all homes sold would be replaced by new, affordable housing. However, it would be difficult for councils to fund this. Last year, just one new property was built for every 11 council homes sold.

The Conservatives believe that making councils sell their high-value housing will pay to replace both the council homes and housing association properties.

Critics of the system do not think this will work, especially in the capital where land to build replacement houses is expensive and sparse.

The Greater London Authority (GLA), headed by Johnson as Mayor of London, will lobby the Government to use equity loans rather than cash discounts; this will avoid councils having to sell their high-value assets.

It will also allow the Treasury to fund the scheme, similarly to Help to Buy equity loans and ensure that housing associations are fully compensated.

Social landlords support the GLA’s plans. Chief Executive of London social landlord, Notting Hill Housing, Kate Davies, says that it is a good idea and a better solution that the Government should seriously consider.

Deputy Chief Executive of the Chartered Institute of Housing, Gavin Smart, says that using equity loans would be “consistent with other recent Government initiatives, which also use equity loans to support homeownership.”

He believes that equity loans “are attractive because they can be funded by financial instruments rather than borrowing.” However, he warns: “Whether the politics of it stack up isn’t clear at this point.”1 

Senior Tories have criticised the plan to sell off council and housing association homes. Head of the Local Government Association, Gary Porter, says: “If councils make money on a council asset, it should stay with councils.”1

Additionally, the former head of the civil service, Lord Kerslake, says that peers of all political parties are concerned. He believes the impact in London would be “truly disastrous.”1

London councils and MPs would like the Government to ringfence any cash made from the sale of council homes in the capital, to avoid it being used to subsidise Right to Buy discounts in other parts of the country.

The Government is set to publish details of how it plans to implement the Right to Buy extension later this year.

A spokesperson for Johnson says that the Right to Buy plans express “a basic unfairness”, by giving housing association tenants the same ownership rights as those living in council homes.

They continue: “The Mayor has been clear that he wants to see all money made from the sale of any London homes retained in the capital to build more replacement new homes, particularly affordable homes.”1

1 http://www.ft.com/cms/s/0/653bdcba-1fd0-11e5-ab0f-6bb9974f25d0.html#axzz3eePufjJb

 

 

Hopeful Labour Leader Wants Right to Buy for Private Tenants

Published On: July 2, 2015 at 8:54 am

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One Labour leadership contender would like to see the Right to Buy scheme extended to private tenants.

Hopeful Labour Leader Wants Right to Buy for Private Tenants

Hopeful Labour Leader Wants Right to Buy for Private Tenants

Islington MP Jeremy Corbyn says that abolishing the £14 billion tax breaks currently offered to buy-to-let landlords could fund a private rental sector Right to Buy. Private renters would have the right to purchase their rental properties at a discount.

Corbyn says: “We know that generation rent faces an uphill struggle simply to get into long-term housing.

“We have seen some good ideas from Labour to establish more secure tenancies for renters. Now we need to go further and think of new ways to get more people into secure housing.”

He believes that a Right to Buy for private tenants could help solve the housing crisis and he will launch a consultation on the policy this summer.

He continues: “I believe this idea could open up the possibility of real secure housing for many currently faced with insecurity and high rents.”1

Corbyn is not the first Labour MP to consider a private sector Right to Buy scheme.

In June, Ealing North MP Steve Pound spoke of the Government’s plans to extend Right to Buy to housing association tenants. He said that the “inevitable logic is to extend this to private tenants and see what private landlords have to say.”1

If Corbyn’s proposal was adopted, private landlords would lose tax breaks that are not applied to other businesses and could be required to sell their properties at a discount to tenants who have lived there for three years.

Meanwhile, Labour leadership contender Andy Burnham would like to offer powers to local councils that would allow them to issue compulsory purchase orders on private rental properties that do not meet a decent home standard.

Burnham has promised to make Labour the party of homeownership if it wins the next general election.

Another contender, Liz Kendall, has not yet made pledges on housing. Additionally, Yvette Cooper, the former housing minister, has not set out her plans.

1 http://www.propertyindustryeye.com/labour-leadership-contender-wants-right-to-buy-for-private-tenants/