The Sunday Times: Home front
Sun 06 Dec 2015
Tis the season for housing-market forecasts as well as predictable hangovers, embarrassing office partiesand train delays. First up is the Halifax, which has released its forecast for 2016. It thinks that house-priceinflation, currently 9.7% on its index, will drop to between 4% and 6% by the end of next year, with London which has been driving the national rise in prices slowing particularly sharply. The Halifax also predictsthat most of the factors that have been in play in recent months, notably a shortage of supply alongsidereasonably perky demand, will remain in place. So, while there should be a small pick-up in sales, it will benothing to write home about.
I get a lot of letters and emails asking why, with house prices high in relation to incomes, prices are not falling.The Halifax accepts that affordability is stretched, but cites reluctant sellers, low levels of housebuilding which seem to have weakened this autumn and low interest rates as factors keeping them up.
You wait for one housing inquiry to come along, then theres another one straightaway. The latest is fromthe Local Government Association (LGA), which has established a Housing Commission to examine howcouncils can build more homes.
You might have thought that council houses as opposed to social housing provided by associations disappeared around the same time as the trolley bus. I am nostalgic for the days when local authorities built185,000 homes a year, more than the public and private sectors combined now. Four and a half decades is along time ago, but that was when it happened. Even in the late 1970s, councils were building more than100,000 homes a year.
Times have changed, but we have seen a mini-revival. Council houses were built at a faster rate in 2011-12than they had been for 20 years. Over the five years of the coalition government, more council houses werebuilt admittedly only 11,740 than in the 1997-2010 Labour reign. The LGA wants to go much further,and has set up a seven-member commission to advise on how. It says private housebuilding will never riseabove 150,000 homes a year, at least 80,000 short of what is needed.Version: 1
The association thinks that councils could plug some of the gap. It, too, is interested in ideas, with submissions
of no more than 3,000 words to be sent to LGAhousingcommission@local.gov.uk.
The shortage of housing is most acute for young people in big cities. Is the answer to continue to forcedevelopers to include affordable housing in all new developments, as under the Section 106 regime? As apolicy, it has had mixed success and created friction. At the Tory conference a few weeks ago, the housingminister, Brandon Lewis, gave the example of a housing development that had taken 10 years to get throughplanning because of disputes related to affordable housing. He promised reform.
Charles Holland and Matthew Bird, respectively head of residential research and of affordable housing atMarsh & Parsons estate agency, have come up with an alternative formula: an affordable housing levy, to becharged on all developments, and used to build affordable housing elsewhere. Informal schemes such as thisexist already, but under their scheme, which initially applies only to the capital, but could be used elsewhere,a 100m central London development would raise 15.75m, and 6m would be levied on a 40m suburbandevelopment. Is it a sensible solution or social engineering, though?
Back to builders, and not builders tea this time. Ive discovered that there is a four-stage process to gettingany work done. Stage one is getting somebody to come round to give you an estimate. Stage two is gettingthat estimate after the initial visit. Stage three, probably the most challenging, is getting a start date for thework. Stage four, assuming all thats been successfully negotiated and the work is carried out, is getting themto take away their stuff. Despite repeated calls, Ive still got a ladder in my garden from some work done ninemonths ago.