This week's blog was supposed to be the first in a four part series covering some thoughts on social care that were going to be better planned than the normal, slightly random, series of blogs that readers get. But, with questions of housing and housing supply competing right up there with Julian Assange for the domination of the post-Olympics, pre-Paralympics news agenda it seems as if topicality should trump considered opinion.
So what has the last week brought us? First there was the news that the Office of Fair Trading wasn't going to interfere in the merger process between two large North-West based associations. For those at Arena and Harvest, (now the rather curiously named "Your Housing Group") this is clearly good news, and for the rest of us it brings the relief that the swinging pendulum of regulation is not increasing its interference in our affairs.
Then on the same day, the Financial Times runs a front page piece about the Government, possibly, looking to underwrite housing association bonds. Wow! Good news if that can happen - it's "blindingly obvious" (for those not familiar with the relevance of this term, hang on) that if our borrowing costs can be cut - and long dated Government Gilts trade at 2.5%, well below our average cost of capital - then we can build more houses for the same rent. So I look forward to some announcement soon...
And then there was Boris news. It seems as if the housing market in London might not present quite such easy investment options for affordable housing as the Mayoral Office might have hoped. Sites at affordable prices and with planning consent seem to be a bit thin on the ground; there's talk of allocations not being able to be spent "down south". Could it be that the HCA will need to move resources away from London if the full National Affordable Housing Programme is to be spent? If so, @grantshapps, there are plenty of oven-ready sites up here in the North-West, so please direct it to us, so we can do our bit to get Britain building again.
You might think it was "blindingly obvious" to do that rather than let the money slip away from housing, just as you might think it was "blindingly obvious" that these areas never needed the Government's support for their affordable programmes anyway. And my source for that? Nothing other than the real turkey of the week - the report from the Policy Exchange suggesting that all social housing property which has a value above the regional median for house prices should be sold, not re-let, when it becomes vacant. The maths is compelling - sell a big house in Westminster, and build 10 small ones, without grant, in a place with below average house prices, and presumably that was why @grantshapps was quoted all over the press as saying the idea was "blindingly obvious" (see here, here and here for coverage).
I can actually think of some very good business reasons why selling property when it becomes empty is a good idea: cash would keep coming in and if it was genuinely only high value property that was sold, receipts would exceed cost of replacement supply; our reputation as a landlord would be one who only ever let newly-built homes (attractive to any prospective customer); our life-cycle repair costs would be substantially lower - Decent Homes repair thresholds and the associated expenditure would become irrelevant as only a tiny minority of tenancies would last 20 years. The bean-counters would be very happy indeed.
But, as @IsabelHardman at the Spectator said, it "would see a gradual shift towards a Parisian model of the social housing ringing a city in only the cheaper areas. Those areas are the ones with poorer job prospects, which increases the risk of tenants who are unemployed remaining so." As we've seen with so many other financially driven ventures into social policy - from A4E to G4S - understanding maths is no pathway to understanding real value for the tax payer. Not so "blindingly obvious" after all perhaps?
So what has the last week brought us? First there was the news that the Office of Fair Trading wasn't going to interfere in the merger process between two large North-West based associations. For those at Arena and Harvest, (now the rather curiously named "Your Housing Group") this is clearly good news, and for the rest of us it brings the relief that the swinging pendulum of regulation is not increasing its interference in our affairs.
Housing minister@grantshapps says PE sell off policy is "blindingly obvious". What do you think? bit.ly/PKOVzA t
— Hannah Fearn (@hannahfearn) August 20, 2012
Then on the same day, the Financial Times runs a front page piece about the Government, possibly, looking to underwrite housing association bonds. Wow! Good news if that can happen - it's "blindingly obvious" (for those not familiar with the relevance of this term, hang on) that if our borrowing costs can be cut - and long dated Government Gilts trade at 2.5%, well below our average cost of capital - then we can build more houses for the same rent. So I look forward to some announcement soon...
And then there was Boris news. It seems as if the housing market in London might not present quite such easy investment options for affordable housing as the Mayoral Office might have hoped. Sites at affordable prices and with planning consent seem to be a bit thin on the ground; there's talk of allocations not being able to be spent "down south". Could it be that the HCA will need to move resources away from London if the full National Affordable Housing Programme is to be spent? If so, @grantshapps, there are plenty of oven-ready sites up here in the North-West, so please direct it to us, so we can do our bit to get Britain building again.
You might think it was "blindingly obvious" to do that rather than let the money slip away from housing, just as you might think it was "blindingly obvious" that these areas never needed the Government's support for their affordable programmes anyway. And my source for that? Nothing other than the real turkey of the week - the report from the Policy Exchange suggesting that all social housing property which has a value above the regional median for house prices should be sold, not re-let, when it becomes vacant. The maths is compelling - sell a big house in Westminster, and build 10 small ones, without grant, in a place with below average house prices, and presumably that was why @grantshapps was quoted all over the press as saying the idea was "blindingly obvious" (see here, here and here for coverage).
I can actually think of some very good business reasons why selling property when it becomes empty is a good idea: cash would keep coming in and if it was genuinely only high value property that was sold, receipts would exceed cost of replacement supply; our reputation as a landlord would be one who only ever let newly-built homes (attractive to any prospective customer); our life-cycle repair costs would be substantially lower - Decent Homes repair thresholds and the associated expenditure would become irrelevant as only a tiny minority of tenancies would last 20 years. The bean-counters would be very happy indeed.
But, as @IsabelHardman at the Spectator said, it "would see a gradual shift towards a Parisian model of the social housing ringing a city in only the cheaper areas. Those areas are the ones with poorer job prospects, which increases the risk of tenants who are unemployed remaining so." As we've seen with so many other financially driven ventures into social policy - from A4E to G4S - understanding maths is no pathway to understanding real value for the tax payer. Not so "blindingly obvious" after all perhaps?
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