Housing industry

  • Derek Long takes the stage in Austria

    arc4 Director, Derek Long, is to address a prestigious Austrian national housing association conference on the English social housing crisis.

    The only speaker based outside Austria and Germany, he will share the podium with the last Austrian Prime Minister, other national politicians and academics from universities in Berlin and Vienna.

    Category: News, Comment, Housing industry, Social housing, Arc4
  • The windmills of your mind

    arc4 Director, Derek Long, dissects the implications for supported housing commissioners of the government's latest consultation on funding

    http://campbelltickell.com/wp-content/uploads/2018/02/ct_brief_33.pdf

    Category: News, Comment, Housing industry, Property, Social housing, Arc4 Tags: supported, Housing, consultation, vulnerable
  • Back in the old country

    To make a real impact on rural housing need for older people, Lord Best’s HAPPI 4 inquiry needs to pose some hard questions about our planning system.

    As the All Party Parliamentary Group inquiry into rural housing and older people wraps up its final evidence session, the group will now turn to its final recommendations. Allowing the planning system to focus on older person’s housing need across income ranges could transform the future for struggling villages.

    As the Joseph Rowntree Foundation reported in 2012 (Older people’s housing: choice, quality of life and under-occupation. Joseph Rowntree Foundation 2012), significant proportions of older people are likely to be living in unsuitable housing. The lack of suitable housing is a major barrier preventing older people from moving to more suitable accommodation. Yet the effect of rural planning policy, is to discriminate between different groups of older people. This means it erodes the very long term sustainability rural housing policy seeks to deliver.

    Currently, the practical effect of rural exception sites and general development policies in many national parks is to constrain building to affordable housing. It is neither sensible nor just to deny existing older home owners the chance to access more suitable accommodation locally. Failing to create ‘downsizing’ or ‘rightsizing’ options will force community anchors out of villages, just as surely as not building affordable housing drives first time buyers from the communities of their birth.

    Our current stay put or ship out choice represents a bad bargain either way for society, as well as the rural residents it traps.

    Staying put in unsuitable housing could present significant health challenges (e.g. falling down stairs) or prevent the earlier discharges necessary to unjam hospital care. Conversely, forcing residents to leave a community that they love, thereby severing their social networks could create greater pressure on the state to plug the resultant gaps in support networks. And that’s not accounting for the additional isolation and loneliness such uprooting may cause.

    In terms of social cohesion, all older people, but especially long-term residents, make a massive contribution to community life. They are the mainstay of voluntary services, they provide childcare that allows others to work and they sustain local character.

    Above all, older people usually under-occupy family housing, thereby making it more difficult for the community to attract and retain younger households that add the needed balance and vibrancy.

    So, HAPPI 4 needs to highlight how planning policy is failing our older neighbours and suggest ways the planning system can promote rural sustainability by widening housing choice for all older people.

    Category: News, Comment, Housing industry, Property, Arc4 Tags: Housing, older, rural, HAPPI, downsizing, affordable
  • Thunderbolt and lightning: Messages from France for the UK General Election

    arc4 Director, Derek Long, highlights what the French Presidential Election can tell us about the result of our own June 8th contest

    Le Pen’s second place shows the limitations for the harder right
    - Le Pen’s second place does not presage a UKIP surge
    - This has all happened before when the left was divided and Le Pen Père got through in 2002. He lost by a mere 83% to 17% to the revamped Gaulliste, Chirac.
    - The worrying news for Labour’s heartlands is that some of Le Pen’s support comes from Trumpian post-industrial voters in the former metal bashing regions.

    Mélenchon’s stronger show suggests a ceiling for a harder left approach
    - Mélenchon did get 19% of the poll – but …
    - He still came comfortably behind an entirely discredited conservative, a far-right candidate and a Social Democrat/Liberal author of anti-trades union laws
    - He has consolidated the old Communist Party vote (like Mitterand did for the Parti Socialiste (PS) in the 1970s) but, with a good campaign, the PS vote up for grabs, Le Pen on the rise and Capitalism going through a major crisis, he still came 4th…

    Macron’s rise has the whiff of an SDP insurgency, rather than a centrist realignment
    - The Assemblée Nationale elections will give more of a clue whether this was faute de mieux and merely the prelude to US style gridlock (which the AN will win)
    - Giscard d'Estaing broke the Gaullist monopoly in 1974 but was not re-elected
    - So, as in 2010 – can anyone fake the authenticity needed to break through in the UK?
    - And if En Marche doesn’t succeed in France, it may retard UK moves for an anti-Conservative rapprochement for 2022

    Be nice to sensible politicians – it’s getting harder to form compromises out there
    - We are back in the 1930s (as I have mentioned many times). The managerial centrist parties are losing share to the extremes – 40% voted extrêmes this time in France.
    - The first five ‘big’ ‘parties’ share of the vote fell from 94% to 91% - so, even when they win, their mandates are a little less solid than before
    - Mélenchon is consulting on abstention or ballot spoiling rather than support Macron
    - Expect more votes in the UK for very fringe parties like “Get the coppers off the jury”

    The voters are very off-piste about their choices
    - Spoilt papers were up to 2.6% (a 32.8% proportionate increase !)
    - Turnout was down 1.5% (a 2.1% proportionate fall)
    - Despite the strong choices available, some voters are agreeing with Freddie Mercury that “Nothing really matters. Anyone can see.”
    - And the long range forecast for democracy is …
    “Thunderbolt and lightning, Very, very frightening me”

    Category: News, Comment, Housing industry, Property, Social housing, Arc4 Tags: France, French, Election
  • Opportunity knocks? Shaping a new private rented sector | Wednesday 3 May 2017 | Kingsway Hall, London

    More than four million households now rent their home from a private landlord; nearly twice as many as 10 years ago. But with the Council of Mortgage Lenders forecasting a substantial drop in the number of buy-to-let landlords in the coming years - how is the private rented sector going to keep up with ever-increasing demand?

    This one-day seminar in London will be chaired by HQN's PRS expert, former Head of Housing at the Audit Commission Roger Jarman, and feature a top line-up of speakers including arc4 Managing Director, Helen Brzozowski.

    Further information can be found on the following link at HQN's website:

    http://hqnetwork.co.uk/events/opportunity-knocks-shaping-a-new-private-r...

    Category: News, Housing industry, Property, Arc4 Tags: PRS, private rent, HQN
  • arc4 Director interviewed on Korean Housing Market outlook

    With Korea firmly on the world stage again, Derek Long was interviewed by Asian Property News for his insight into its unique property market.

    - After a major dip in the housing market in 2013, have things begun to improve, or have recent problems - presidential corruption, threats from DPRK, a shift in US policy away from Asia - exacerbated the problem?

    Housing prices recovered gradually from the 2013 setback, picking up sharply in early 2016. However, growing uncertainty has meant prices have plateaued for the past 6 months. It’s early days, but prices look to be slipping below the decade long trend of 2% annual growth. Certainly, a January survey of consumer opinion suggested almost half believed sale prices will fall this year. All of which points to a familiar upwards pressure on jeonse prices, as would-be owners hedge equity losses by chasing ever scarcer jeonse properties.

    - What effect is the glut in the property market caused by the building boom of recent years having on the health of the broader Korean economy (particularly re. household debt and borrowing)

    Household Debt-to-GDP ratio has now reached 90% which has surpassed the UK and is heading towards twice the German ratio. Fuelled by a sharp expansion last year, the housing component is particularly worrying. Already 1.5 million (8%) of households are already technically underwater and are paying an eye-watering 40% of their disposable income to service loans. With mortgage rates at their highest for two years and US interest rates likely to rise, the Bank of Korea projects the next 1% increase in base rate would add another 69,000 households. This is not sustainable in the long term.

    - With Park's ouster, and the coming Winter Olympics, will investor/consumer confidence be restored, or can we expect things to remain difficult with regards the Korean economy, and the housing market in particular, for some time?

    The future trajectory for the Republic’s economy appears uncertain. With President Park’s replacement due to be elected in May, ironically the most important election for the ROK’s future has already taken place. It’s President Trump’s reactions towards North Korea that will be key for investor confidence in the South’s economy for the next four years. The lack of a workable Presidential/Parliamentary majority emerging after May could further fuel uncertainty.

    With economic growth fluctuating, the chaebols focussing inwards, growing tensions with China and the trend towards global protectionism, the Central Bank’s 2.6% growth forecast feels a tad optimistic.

    In times of uncertainty, speculative money moves into sound asset classes. The past new build glut makes property less likely to be a go to investment. True, Olympics tend to push up property prices above trend and national averages. However, given Pyeongchang’s size, urban form and remoteness, it is doubtful the competition will make a significant impact on anything but some local prices.

    Which reminds us of the ROK’s key structural challenge, that regional housing markets are effectively decoupled from the dominant Seoul market. Creating measures that are more sensitive to regional markets may be a second order challenge for government – but will be important for the long term health of the housing market and the economy.

    Category: News, Comment, Housing industry, Property, Social housing, Arc4 Tags: Korea, Housing, market
  • Non - starter

    In a year when May came after June, you might have bet that the Starter Homes initiative would also have landed on the new prime minister's bonfire of George Osborne's vanities. Yet, as the government gets set to announce a paradigm lurch towards ownership in planning policy, our new research into the Starter Homes market raises important questions about whether developers and councils can meet Downing Street's aspirations.

    In the next few weeks, the Department for Communities and Local Government will confirm that the National Planning Policy Framework is to be changed so that Starter Homes will form part of councils' affordable housing requirement. Councils will need to achieve a 'quota' of Starter Homes on appropriate sites, including probably rural exceptions. Planners will need to secure Starter Homes as part of their on-site negotiations.

    Add in that Starter Homes-eligible households of first-time buyers under 40 can access a 20% discount and settled conclusions about housing demand go out of the window - as our recent research commissioned by a Northern local authority shows.

    Using primary research, re-analysis of 2013's Strategic Housing Market Assessment (SHMA) data, Zoopla's database and Census analysis, we found that the Starter Homes discount could potentially bring 82% more households into buying. This constituted a staggering 4% of the total households in the authority. Three-quarters of this new market could afford two-bed properties, with the remainder being able to access three-bed homes via the discount. However, when the level of savings were factored in, the number of potential households fell back by half.

    The Starter Homes-eligible households appear to have different aspirations than the SHMA analysis would indicate. Our research found that 60% of an (admittedly much smaller) sample of eligible households sought two-bed housing compared with the majority that sought three-bed properties reported by the SHMA.

    As with the previous SHMA analysis, the eligible households expected (but did not aspire) to move to semi-detached properties or terraces. However, the locations they could afford had changed significantly. This suggests that marketing campaigns will need to recalibrate households' expectations of where they might move.

    A worrying finding for registered providers bidding for Homes and Communities Agency grant is that hardly any eligible household had considered shared ownership, and significantly, of those that did, only a small fraction considered it a possible option. This is corroborated by other primary research we have undertaken where target households preferred full over shared ownership. While raising the profile of shared ownership will undoubtedly help, the resistance to the product among informed target households suggests that almost doubling the numbers of shared owners in England by 2020 requires a rethinking of the offer.

    Our survey of eligible households revealed a limited awareness of the Starter Homes initiative and while the product generally achieved a positive response when explained, there was some scepticism that it was 'too good to be true', that locations would be unfavourable and unhappiness that it was only available for new build.

    For housing strategists, there are wider implications. Our analysis found that two-bed Starter Homes would be cheaper than their private rented equivalents. While this price advantage did not extend greatly into the three-bed private market, in discrete communities, Starter Homes developments could very easily create demand problems for private landlords with potential consequences of under-investment and empty homes.

    Although Starter Homes are private products, the pressure will be on the public sector to deliver. While our research found the aspiration to own is strong among eligible households, flexibility will be the key for planners and developers seeking to make sense of a brittle post-Brexit housing market.

    Derek Long, Director of Housing and Data Consultancy, arc4
    First published in Inside Housing 20 September 2016

    Category: News, Comment, Housing industry, Property, Social housing, Arc4 Tags: Housing, starter homes, affordable, shared ownership, Strategic, SHMA
  • Doorbellology

    There’s a reason why that hideous new estate they’ve built on the disused asbestos factory site is called Foxes Barn or St Cuthberts Reach. It’s called doorbellology – the science – OK, pseudo-science that tells us that our addresses can influence the value of our properties.

    UNLUCKY13?
    Received wisdom has it that number 13s won’t sell. In the latest Department for Communities and Local Government release of 120,000 house sales, only 1,190 number 13s homes were sold – compared with 2,067 number 12s and 1,854 number 14s. So trying to sell a number 13 is surely a bad bet. But… the average price[1] of a number 13 is nearly £15,700, above the average for a number 12. That’s a 6.2% differential.
    So why are developers building fewer number 13s? The ratio of new build number 13s to 12s has fallen by 12% compared with existing properties. Might some doorbellology improve their profits?

    WHO IS THE PATRON SAINT OF ESTATE AGENTS?
    Actually every saint is. After ‘The’, the most common name of a street where sales occurred (2,040 or 1.7%) started with a saint’s name.
    And saints’ streets are a good bet to live in because a ‘St Something’ address is worth 5% (£13,427) more than the England and Wales median. So while homes in streets with saints names may be more common, they appear also to be in better areas than most for prices.

    The word ‘High’ was the next most common start to a street name. However, this was almost half as less frequent, at 1,096 sales.

    DO NAMES MATTER?
    Well, among the top 5% of streets ranked by their average value, a home on a street named after a girl are worth 2.2% (£16,746) more than ones on those with boys’ names. Once the classical references to Aristotle and Agamemnon are dispensed with, the boys’ names are fewer and, frankly, a bit scratchy such as Waldemar and Onslow.

    When it comes to naming valuable homes, being rustic is the best bet. Names referencing trees or woods are by far the most common in the top 5% sales by price, followed distantly by animals (often birds) and more general rural features.

    Across the value range, having ‘Willow’ at the start of your house name added 0.8% to the median (middle) value compared with the national median. So, short of moving your house to the country, cultivating a tree in the back garden might be a good plan.

    ALWAYS A FOREIGN FIELD?
    Exotic locations may work for house names, but the smart money for the expensive sales are much more likely to be in streets named after more European locations, like Luxemburg (sic), Frankfurt, and especially Spanish or related locations such as Cadiz, Palma and Iberian. Often, the streets are named from the by-jingo School Atlas, like Borneo and Burma, perhaps suggesting that old streets have undergone major regeneration.

    AND THE PICK OF THE NAMES?
    Who can better the home sold called WI-WURRIE.

    After all, it’s just bricks and mortar!

    Derek Long, a director of housing and data consultancy, arc4
    First published in Inside Housing Magazine

    Category: Comment, Housing industry, Property, Arc4 Tags: Housing, house sales, developers, new build, house names
  • Can Cannes?

    MIPIM – remember the acronym. Pronounced Mip-em, Le Marché International des professionnels de l’immobilier held each March in Cannes, is fast becoming a key date for local authorities and social landlords seeking finance for new development.

    But don’t think Harrogate with sand, or Manchester with yachts. With over 20,000 delegates, this focus for investors and developers now rivals the town’s Film Festival for size. Attracting almost 8,000 organisations from 89 countries, the conference is, in reality, the Davos for development.

    So why have bodies from London, Leeds and Liverpool shelled out scarce rents or council taxes to fund the £1,400-a-head tickets? The answer is simple. Capital looking for an asset. With the decline of central government funding, UK councils and LEPs are looking to attract inward investment to transform their economies and housing markets.

    And they are in deadly earnest. If our Easyjet pilot had turned sharp left into the Alpes-Maritimes, the mayor of Liverpool, his chief executive, Liverpool Vision’s head honcho, plus a former member of the Olympic Delivery Authority would have all promptly checked in to the schmoozefest in the sky.

    The lure is 1,600 investors. Dodging the stands proffering Latvian firewater or Portuguese opera singers are men (and they are overwhelmingly men) with cash in search of an asset.
    Britain is an important target (but not a sure thing). The unchained capital takes many forms, from a diamond-Rolexed Indian family wealth fund manager, to a nervous French crowd funder or a major institutional investor.
    The investors are less concerned with tenure and more focused on the bottom line.

    Visitors to our joint Grant Thornton/arc4 stand showed that interest in UK private renting is not just paper talk. So products like ours, which can analyse the private rented market to a forensic degree for investors, developers and local authorities, attracted significant interest.

    Notwithstanding the benign weather, MIPIM was not plain sailing for the UK pitchers. A staggering 544 local authorities were there competing for funding.

    Striking presences by, for example, Leeds, Liverpool, Manchester, Birmingham and London, were up against very well heeled contributions from Montreal, St Petersburg, Dubai, Tokyo, Istanbul and Warsaw.

    The US had a large showcase for developing states. And whoever paid to get the key main road outside the Carlton Hotel closed for the evening could give tutorials on how to make a really big impression.

    So can the Cannes property festival supplant conventional routes for development financing? No, It will always be the province for big-city, often signature developments and for the present, substantially London-focused interest.

    However, it is clear that MIPIM-sourced finance will increasingly become a feature of major programmes of social landlords and local authorities’ non-market development across the UK.

    Derek Long, a director of housing and data consultancy, arc4
    First published in Inside Housing Magazine

    Category: Comment, Housing industry, Social housing, Arc4 Tags: Cannes, development, finance, investment, MIPIM
  • Surfing the Third Wave

    Arc4's Senior Consultant Colette Manion shares key discoveries from Australia's new approach to social housing in Inside Housing.

    Australians are known for their surfing prowess. But just recently the country's social landlords have swapped Bondi for the boardroom as they learn how to surf a new wave of social housing policy. A wave propelled by a stance on welfare reform that is sweeping fast through our social sector too.

    Dr Tony Gilmore, CEO of the Australian Housing Action Network, is clear that countries like UK, New Zealand and Australia have now entered a third wave of government support for tenants. The universal provision of the mid-20th Century and the later, more consumer focussed approaches have ebbed and been replaced by a third wave of support, where social housing is required to be ‘step-up’ not a ‘hand-out’.

    The new wave is nowhere more evident than in New South Wales (NSW). (The Australian States play the major role in housing policy.) The ‘Future Directions’ housing policy is a real paradigm shift and has been earmarked as pivotal to changing the face of social housing across NSW forever. The state’s housing Minister, Brad Hazzard's aims are not just to build more affordable housing, but make the housing continuum work better, enable transitions to the private market and reduce welfare dependency.

    The 23,500 new and replacement homes put English housing policy in an interesting contrast (albeit Future Directions is a ten year strategy.) The intention to transfer up to 35% of social housing stock to community housing providers and create mixed communities sounds more 1980s on British shores. There will also be a 60% increase in the use of support to occupy private rented accommodation. (Maybe news of our ballooning bill for private rent support has not reached Sydney yet.)

    However, beneath the shiny spin-doctored headlines lie a chilling distinction. Social tenants are to be divided into a 'safety net group’ whose members will need support in the long term, and the ‘opportunity group’ that can be helped to live an independent life free of welfare subsidies and living in the private market. As Minister Hazzard announced, it will do the children in social housing "good to see their neighbours in private housing going to a job each day”. A sense of the Victorian (and arguably Frank Field's) 'deserving’ and the ‘undeserving’ poor seems to be the ideological driver.

    Yes, perhaps a modest 10 percent of Australian social tenants have a reasonable income or might reasonably be expected to progress to work. But the harsh reality is, even in growing Australia, that for many, there are no suitable local jobs and the private rental market will prove just too expensive.

    Like the Aussie stereotype, their social landlords sound more entrepreneurial. A trait which the Future Directions strategy emphasises by encouraging new multi-faceted ‘vehicles’ that cater to a range of needs from finance to community support, perhaps a trick we have missed? Adopting the more commercial and somewhat market savvier approach Australian to housing could be the new path for many UK housing associations.

    The Australian engagement of Government is different too. Yes, there is a strong market component to what New South Wales is doing. But, there is also an overt commitment to joined up government (and with targets) !

    For example, there is a strong focus on education and employment. Improving the educational performance of social tenants is an overt goal. So interesting measures like trialling changed allocation processes so young people and families with children can be placed in dwellings that are close to better educational and employment opportunities are part of this housing strategy.

    So, as the third wave breaks over UK’s social landlords, maybe we should drawn on the lessons from the champion social housing surfers Down Under!

    During February 2016, Colette was Housing Action Network’s thinker-in-residence, based in New South Wales.

    Category: News, Comment, Housing industry, Social housing Tags: Social housing, arc4, inside housing, affordable housing, Welfare Reform

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