Housing through the prism of political pragmatism

COMMENT: The National Housing Federation submission to the next government spending review calls for investment of £12.8bn pa for the supply of new homes, £1bn pa on a regeneration fund for the ”left behind” areas of England, reforms to the welfare system and a higher priority for action on safety. Following the tragedy at Grenfell Tower, I would have placed safety as the top priority, but the main point of this article is this – housing professionals would be well advised to view the issues facing the sector through the prism of political pragmatism. That is, to view the challenges that we face from the perspective of politicians. Ultimately, it is politicians who make decisions about volume, funding, how housing spend is accounted for and competing priorities in different parts of the country. A basic example. I am sure we are all deeply saddened at the increasing levels of rough sleeping. There can be no greater manifestation of the housing crisis that we face than seeing people sleeping in doorways, subways and public places. This situation has been at the centre of conference agendas and seminars for many years but, in truth, what has fundamentally changed? The hard answer is: very little. We are still failing to provide enough new homes to meet demand and the compound year-on-year effect is we are going backwards rather than forwards. The political-level view will be informed by three hard facts. Firstly, that most people in the UK are adequately housed most of the time. Secondly, as has been the position for many years, in England there remains a crude surplus in the number of homes over the number of households. All of which suggests that the housing crisis is not simply about numbers. Thirdly, I have no doubt that politicians regularly cast their eyes over the accumulated surpluses that are present in the accounts of housing associations. In 2017, a report by Moody’s showed that associations had grown operating surpluses by 10% to record levels, despite the 1% annual rent reduction, and that these increases in surpluses were in part due to reductions in repairs and maintenance. In the wake of Grenfell Tower, this must concentrate minds like never before. The report also predicted a further reduction in social rented homes over the years 2017/18 into 2018/19. As everyone who works in housing knows, the sector is radically different now to how it was prior to Right to Buy. While council housebuilding is getting under way again, there are two-thirds fewer council homes than there were in 1980, and the build-for-sale market currently delivers three times as many new homes each year as the housing associations and councils combined. On this basis, the route to delivering more homes will rest with the private sector. So what’s the solution? Councils and housing associations can and should take a moral high ground by building homes that reflect how society is changing. One-third of households in 2019 are single-person households, yet many social landlords are still delivering mostly “family” homes with two, three and more bedrooms. Housing associations need to make sure they are using their surpluses to good effect, supporting their social objectives and, where necessary, “pump priming” schemes that otherwise would not be viable. Bigger associations should also offer to support smaller providers with funding to help them develop, without the need to be swept up into a merger. A more self-supporting and collaborative sector has to be a win for all concerned and will offer greater choice to consumers. Greater investment in housing supply and regeneration is needed but investment should be prioritised to those landlords that demonstrate excellent customer-focused service delivery. Ploughing more and more money in to subsidising private landlords rather than build assets for the future is economic illiteracy. The housing crisis is about more than numbers and the crisis in one area will differ from that in another area. In addition to building new homes, we must begin remodelling and better managing the homes that we have, becoming as efficient at reletting homes as hotels are at reoccupying rooms. It can be done. The future can be bright but I predict that it will only be so for those landlords that are agile, have political savvy, and regularly do reality checks on how they are delivering against their founding purpose. Paul Eastwood is chief executive of West Herts Homes