HQN Blog: Away from (just) the numbers – a new way of thinking about housing from Labour

Once upon a time there was a touching faith that building houses in and of itself was a good thing. Here’s what Alex Morton had to say about it all back in 2010.

“A large increase in the number and quality of new homes will limit future house prices, reduce private rent increases, and lead to shorter social housing waiting lists.”

He went on to be David Cameron’s adviser on housing. But his influence spread far and wide.

Do you remember the NHF’s magic bus Homes for Britain rally? That really pushed the build build build line. As a PR campaign it did the trick. Labour put this in their manifesto at the time: “It is only by building more homes that people’s aspiration for home ownership will be fulfilled.”

Labour’s new Green Paper heads off in a fresh direction. It’s not just about building new homes at all costs.

“Homelessness is up by 50% since 2010, rough sleeping has doubled, 120,000 children are without a home to call their own, home ownership is falling and social housing lists rise while luxury flats stand empty, and thousands are living in homes unfit for human habitation.”

“Simply building more market price homes isn’t enough to help many of those faced with the cost of housing crisis because this is only likely to influence prices over the long-term. Conservative housing policy is the wrong answer to the wrong question. We have to build more affordable homes to make homes more affordable.”

If Labour gets in what does this mean for everyone? If it all goes to plan we will see more rented homes at fair rates and a much bigger say for tenants.

Central government will like the lower HB bill. But they will worry about what comes next. You can raid a pensioner’s equity to pay for care costs. Where do you find that cash if they have no assets? Of course, this problem is heading towards us anyway as levels of ownership are going down. But someone must square up to it.

Councils will be glad to be back in the housing game. Labour sees a key role for them. But who will actually do the work? They could recruit from the private sector. But no one in their right mind would do that. The problems at Bovis are far from unique. And the new homes built by associations can get flack also. To be fair to Labour they want to get a top architect in to make sure affordable housing is high quality. So at least they see there is a problem. Let’s hope they have more luck than Alex Morton who also wanted to boost standards. And got nowhere.

It’s time for a shake up at associations. Some of them really bought into the idea that building luxury homes was the way to bring in the cash to pay for affordable homes. Did a few of them take it too far? Yes. Did you ever imagine in your wildest dreams that a housing association would worry about the impact of Chinese capital controls on high net worth purchasers? No, neither did I. Anyway, does this model work in the current market? Are sales holding up? Is it an approach that would appeal to Labour now? You know the answer to that. No. But associations are right when they say that without the cash from sales they can’t build for rent. Labour says they will plug this gap. Plainly this is key to the whole plan.

Councils and associations will need to behave like grown-ups. There is a risk that they could end up competing for land, materials and labour. All that would do is drive up costs. It makes no sense, but it is more than likely to happen. Even the Wolf of Wall Street wouldn’t show the necessary commitment to get through the door of a few development departments I could mention. It can all get a bit primal. Could there be a role for the regulator in holding the ring here? It is an obvious pinch point for the private sector to exploit if it’s left unpoliced. The last thing we need is for a new council housing company to go head to head with the old LSVT. Agents will be jumping for joy! And we have a precedent. It is bang wrong that associations bid against each other to win section 106 homes. But they do it time and again. That is one way of pushing up rents.

As you would expect Labour sees a big role for tenants. That means landlords will need to do more to get them on side. You can see them jumping through hoops for regeneration ballots. Some associations might turn into a mutual. That is one way of putting roots down. In the end though we all have to take tough decisions that let down someone. That’s what being a landlord means. It’s not all awards nights, that’s for sure.

So this bigger role cuts both ways. If tenants are to sit on boards they must be match fit. They need access to all the right data and training. Of course, this applies to all stripes of board member. But if things go wrong the tenant must face their neighbours. They don’t get to walk away. So, like it or not, the standard for tenant board members is much higher. Finding people who want this role and making sure they get everything they need to do it well will be tough. All I can say is thanks to the excellent tenant board members I’ve met. Boy they are at the sharp end. I expect the Grenfell Inquiry report will be a wake-up call for all board members and those that are thinking of joining a board. It will set the bar higher for all of us.

By Alistair McIntosh, HQN Chief Executive