Housing in, social care out? why Wednesday’s budget may be a series of half measures
It seems that housing will be front and centre of Wednesday’s Budget. And rightly so. Our inability to house our growing population has been a calamity forty years in the making, the consequences of which have been grimly predictable – spiralling rents outstripping wages, deposits beyond the reach of anyone under 40 – with house prices rising by 259% in the last 20 years while wages rose by only 68%. A Housing Benefit bill that just won’t fall no matter how many ways the government tries to cap it, an 81% increase in social housing waiting lists in 20 years, a 60% increase in B&B use and a 34% increase in homelessness in just 7 years.
The shortage is so acute, there isn’t a single healthy area of the market – we need new first time buyer properties just as much as new family homes, properties for older and disabled people, property to rent and to buy, social and private. And yet, frustratingly, the government seems to have only grasped half of this predicament:
First, there remains a stubborn attachment to demand-side stimulus. From the October announcement to expand Help to Buy, and further speculation that the Budget will include stamp duty exemptions for first time buyers, such policies increase the ability of buyers to pay more for property, inflating already exorbitant prices, without necessarily increasing build volumes. Short of some rumoured dabbling with SME house builder regulation and land-hording, policies to make brownfield land more affordable and green belt more usable, and to tackle the glacial planning approval process to boost supply don’t seem to be featuring here.
Second, while the Government obsesses with private sales, social rents are in a calamitous state. The volume of social housing built by government funds has dropped by 97% since 2010, and no wonder: central government grants to housing associations have been slashed by more than three quarters, local council borrowing to build housing has been severely limited, and Right to Buy has been extended – with councils pushed to sell off their dwindling stock and hand a quarter of the proceeds back to HMT. Again, where are the supply side policies? New grant funding and freer borrowing to enable councils and housing associations building again?
Moreover, all of this demand-side focus seems to target younger people – first time buyers. Again, the government seems to have gotten carried away with one part of the problem and missed the bigger picture. We call it a housing “ladder” for a reason: the lack of affordable homes for first time buyers isn’t just because we aren’t building enough of this specific type of housing – it’s because we aren’t building enough of any type. The shortage of family homes and, most of all, suitable properties that older people can downsize in to is stagnating the rest of the housing market – if no one can move further up the ladder, then the first time buyer properties we already have don’t come onto the market. As recent Demos research has shown, if the government put a tenth of the effort and resources it expends on helping stimulate the first time buyer market on helping developers boost the supply of older people’s housing, it would reap significantly greater returns. Between a quarter and a third of older people say they’re interested in moving into retirement property (that’s up to 3 million people), but as a result of a tiny developer market (no mainstream house builders are interested, with no “Help to Buy” type perks on offer in this sector), land charges which penalise retirement developers for building communal facilities and Local Plans which more often than not seek to discourage this type of housing for fear of “importing” older people into their areas, we’re only building 7,200 of these homes a year. Yet a recent study found that a typical 41 unit retirement development generated 92 separate moves in 19 “chains” in the surrounding housing market – 11 of which resulted in a home being freed up for a first time buyer. The government may think a strong housing offer is the way to win back young voters, but that doesn’t mean the solution only comes from the same place. Helping the much-maligned mortgage free baby boomer to downsize, many of whom are happy to do so if there was something locally available – will do more to free up homes for first time buyers than giving them equity loans for new builds.
And while on the topic of older people, we ought to consider this Budget in its proper context. Housing may now be the Budget centre piece, but social care has been pushed off the table and swept under the rug. The Social Care Green Paper and consultation on care funding – begrudgingly announced following a mishandled Conservative manifesto pledge – has been pushed from the Autumn (where it could have aligned itself with the Budget) to Summer next year. Perhaps. This is a classic example of how governments of all persuasions, motivated by short term pressures and grabs for voter popularity, wilfully undertake a damaging segmentation of two deeply entwined policy areas.
Poor housing is one of the biggest drivers of public health costs, and the main factor in falls, unplanned hospitalisations and winter deaths. But more than this – if the Chancellor does in fact manage a game changing approach to house building on Wednesday without considering the need for a massive increase in accessible and adaptable homes for working age disabled and older people, then social care will remain a funding black hole – trapped in a cycle of “own home versus care home” with no middle way options for people who need lower levels of support to achieve independent living. The future of social care is in the provision of specialist and supported housing as a means of keeping young and old alike out of residential institutions. By putting off any decision on the reform of care and its funding for perhaps a year after this housing-heavy Budget, the Government is decoupling these two policy areas and in so doing sinking the former.
The Chancellor may be talking up a bold Budget, but it looks like he’s set on a series of half measures.