Arc4

  • Arc4's August Blog

    So it's August already! I suppose when you are busy, that is what happens, time rolls by. Whatever happened to June?

    Of course this is the month when traditionally the place is emptied of people as they venture out on a well deserved break.

    Children are out of school and for those at home more pressure on the family budget. There are some who will not notice that it is August. I have in mind those who do not have a bed of their own to sleep in, rolled up cardboard will suffice for now.

    Those who are able to seek and obtain a temporary home have some relief but are always anxious about what happens next.

    In the meantime, whatever time we might have put aside to study the long awaited but promised Green Paper on Housing Policy and Strategy, we can seek more pleasurable pursuits.

    Being generous for a moment, I suppose I understand.

    What with Brexit, HS2, the Northern Rail fiasco (this from Manchester) and Cabinet resignations, there are other considerations. Oh!, I forgot we have a new Housing Minister (nothing new there I sense you saying). Is that the reason for the non- publication, so that Mr. Malthouse can put his own stamp on it?

    Somehow, I doubt it. Kit, as he wishes to be known, is Member for North West Hampshire succeeding Sir George Young. Now that is some inheritance. Sir George held the constituency for over 20 years and held many Offices of State.

    He was, and remains, a great supporter of housing associations, and vigorous opponent to tower blocks. He spent much time on Merseyside, when the Liverpool Housing Action Trust was in being.

    In that period Sir George showed not only empathy for housing associations, but those who resided in them.

    As a Conservative he was able to tread a narrow path between the Conservative ideology of home ownership, and the nation’s need for publicly subsidised rented accommodation. Once quoted as saying, "let housing benefit take the strain", but also accepting that at the time capital subsidy was also required.

    Since the massive slum clearance of the 50's and 60's, the improvement of older properties and LSVT, just a few housing initiatives have seen the light of day. One of the last was the creation, by Prime Ministerial demand, of a study in what was fashionably termed sink estates (a phrase borrowed from across the pond).

    The Brexit vote saw David Cameron go, as quickly did Lord Heseltine, who had been appointed by Cameron to Chair the study group, a task he did with relish. But the prospect of Boris as PM, and the internal wrangling left Lord Heseltine growing trees and warning of the dangers of Brexit.

    So, successor Kit has some stuff to do. Born and educated in Liverpool, followed by the University of Newcastle, he is no stranger to the north. As a Chartered Accountant, he must know about the issues of housing finance.

    Whether he can do anything about the policies of the housing portfolio he now has remains to be seen, as he is certainly secure in his parliamentary seat (majority of 23,943 at the election of May in 2015).

    He needs more than good luck. Longevity in post would help, but that brings us back to Brexit. Will the Conservatives survive, or will we be looking to John Healy M.P. as the Labour Shadow to assume the post?

    In the meantime, there continues to be a job to be done. Arc4's workload and new business shows that. There is variety too. All the evidence points to the important inter-relationship between health, social care and housing; three fields we know well.

    Enjoy the break, if you are having one. Gird your whatsits for the time ahead, make the voice of housing associations heard.

    We can have a new start with new thinking. We are to have a new Chief Executive at the NHF, succeeding the tireless and thoughtful David Orr, a newly created English Homes and lots of other things, private financial investment included with some pretty big sums from overseas amongst them.

    Do your bit, we will be continuing ours.

    We would love to hear from you. Call us.

    Category: Comment, Housing industry, Social housing, Arc4 Tags: Minister, Malthouse, housing associations
  • Together We Can

    It seems that the government has at last realised that there is a housing problem if not a housing crisis.

    Moreover, it also seems that Ministers have recognised that local authorities and housing associations might provide part of the answer. It’s about time too we think.

    It’s not just providing more homes although understandably that would help.

    There has been massive under investment in the housing market for all households.

    Add to this homelessness, domestic abuse, child poverty and dementia care in older persons housing and the answers are clearly in need of a few different solutions.

    Recent stories in “ Inside Housing” have highlighted novel approaches to trans-regional partnerships, rent setting policies but also a worrying trend of declining spend on repairs and maintenance.

    Mortgage lending is said to be on the slide. Taxes and regulations have impacted upon "buy to let" sales so the picture is not a simple line drawing. Let’s remember the lessons from the history of municipal housing and that provided by housing associations (registered providers, the third arm, not-for-profit, call them what you will.)

    The recently published “Municipal Dreams” by John Boughton, reminds readers that the provision of housing to rent for the working classes, did not always mean they could afford it.

    More likely the homes were a demonstration of architectural fancy, or blind political vote catching, rather than built upon proper statistical analysis of need or demand.

    It was the impact of “Cathy Come Home” a BBC television play some 50 years ago, that pricked the nation's conscience. This led to charitable monies from SHELTER to prop up a failing revenue-based subsidy system.

    Capital grants eventually were introduced, this reduced the ongoing debt, which together with personal rent subsidies led to a more affordable home housing provision. But that was then, this is now.

    Looking forward, we can no longer take it that government will have the same sympathetic support for the traditions of social housing.

    We can expect a harder approach, which will limit the number of chosen partners and will certainly involve “for profit” companies.

    The anticipated Social Housing Green Paper, will no doubt clarify this Government’s intentions. It may well be uncomfortable reading. Retaining the status quo is unlikely.

    The historically favoured providers, if they are to compete, will need to demonstrate outcomes in social and economic measures, not just more homes.

    Market demand is only one factor in this new scenario.

    The continuing pressure on the Government's spending with priorities of the NHS and especially social care, law enforcement, education and defence are all in the queue. So, do not expect special treatment.

    At Arc4, we see all these aspects throughout the many and varied clients. They call upon us to create or validate what they are doing or plan to do. It is fascinating. Call us and share confidentially your views.

    Who said” together we can”.

    Category: Comment, Housing industry, Property, Social housing, Arc4 Tags: Housing, crisis, social, Registered providers
  • "Wir können es schaffen ! - We can do it !"

    "Wir können es schaffen ! - We can do it !" was the message of hope sent by arc4's Derek Long to an Austrian National Housing Federation national conference.

    On the back foot since the coming to power of a Conservative/Far Right coalition in December, housing associations in Austria are concerned about their future, whilst former government members the Austrian Socialist Party SPÖ are looking for ideas for their future policy. Follow the link to Derek's short analysis of UK housing since 2010 and the possible policies the Austrian sector might consider.

    Category: Comment, Social housing, Arc4 Tags: Austria, Social housing
  • 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

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