“Beware of politicians bearing housing stats”: unpicking new build numbers

Some houses. Image: Getty.

Well, it’s very exciting that the government has decided we need to build more houses, because before yesterday I don’t think anyone had suggested that as a solution to the housing crisis. One consequence is that we’re almost certainly going to see more politicians arguing about how many houses have actually been built.

It’s an argument that’s been raging in London for years, as various mayors and mayoral candidates try to puff up/slap down the figures. Even without the national conversation it’s definitely something that will happen at the next metro mayoral elections, too. (Something to look forward to, Tees Valley!)

So here’s a quick, and absolutely not boring, guide to unpicking housing statistics. Yay!

Purely because it’s handy and we already have a lot of figures to hand, I’m going to use a current attack line from the London Conservatives. (Be aware that housebuilding stats-twisting comes in all party shapes and colours.) Presenting Assembly Member Gareth Bacon talking about how much affordable homebuilding Boris Johnson had overseen while mayor:

“Boris Johnson averaged 10,436 affordable starts per year in his 8 years in office. As of yesterday Sadiq Khan had started 8,935 in 2016/17 and 2,221 in 2017/18.”

There’s an immediate problem here, with Bacon comparing Johnson’s average over eight years with Khan’s early years total. Housebuilding, particularly housebuilding subsidised by the state, goes in cycles that are dictated by funding. At the start of the cycle you don’t get much happening because the money is only just starting to come in. At the end of the cycle you tend to get a load of new homes.

To show just how wildly year-on-year construction can swing, in 2011-12 there were 4,511 affordable homes started in London using funding from City Hall. That’s less than the 4,654 homes started in 2017-18 that the Tories are now saying isn’t good enough. But you can’t cherry pick figures like that because it’s an unfair reflection of a particular stage of the cycle.

Aren’t we at the end of a cycle now, though? Yes, but the cycles have got a bit out of sync lately. Here’s what the funding from central government for affordable homebuilding in all of England has been over the last decade:

  • 2008-2011: £8.4bn National Affordable Homes Programme
  • 2011-2015: £4.5bn Affordable Homes Programme
  • 2015-18: £1.7bn Affordable Homes Programme
  • 2016-2021: £4.7bn Shared Ownership and Affordable Homes Programme

(The eagle-eyed among you will have noticed that the amounts went down after 2011. This is how we ended up with the ludicrous policy that homes can be rented out at up to 80 per cent of market rate and still be called ‘affordable’: to make up the funding shortfall, housing associations and other builders had to charge more rent.)

London now has its own £3.15bn fund to spend, through the Homes for Londoners fund. That covers 2016-21, although the money didn’t come in until 2016 was well underway.

This could look like there’s lots of different funds sloshing money into housebuilding; but if you look at the figures, 12,473 homes were started in London between 2015-17 under the 2015-18 funding cycle, and then the money seems to dry up, because just 448 were started (so far) under that same funding scheme in 2017-18.

Funding for homes in 2017-18 has switched to the Homes for Londoners coffers. But the thing is, you don’t get new funding on day one and break ground on 50,000 new homes the following week. It takes time – for developers to apply for funding under different rules, those applications to be assessed, plans to be drawn up, permissions to be sought, blah blah blah.


Funding is complicated, is what I’m saying here.

And if you want to know just how crackers housebuilding stats get, City Hall tells me they expect to report 12,500 affordable home starts by the end of this financial year. Which would mean another 8,000 starts in the next month.

In short, look very carefully at anyone comparing figures on housebuilding because it is almost always more complicated that it seems. You can’t compare an entire term in office to a partial term because there are cyclical swings that take years to pan out. And you definitely can’t compare years that were flush with funding to years of austerity. Things to bear in mind when the opposition comes for Andy Street in 2021, or when Labour trumpets its London achievements in 2020.

But the main point to remember when talking about housebuilding numbers is: it’s a distraction. The really important thing is not pure numbers. It’s what kind of homes are being built. In the same way that loads of luxury flats in hip urban centres are no good to your average family, churning out a load of one bedroom flats for rent at 80 per cent of the market rate is different to funding fewer large family homes at social rent.

In London (again, because we have the stats), between 2008 and 2011, there were 29,401 homes started at social rent. With new rules in 2011 introducing the ‘affordable rent’ of up to 80 per cent of market rent, that drops right off and just 5,977 homes at social rent levels have been built in the years since. Some 27,207 ‘affordable rent’ homes were begun since 2011 – but the people living in them will have a markedly different experience.

Sadiq Khan is introducing three new types of tenure aimed at making housing more affordable. When an election comes round, that’s the kind of measure we should be looking at, whether we’re talking London, Manchester, Cambridge or nationally. As with Greeks and gifts, beware of politicians bearing housing stats.

 
 
 
 

What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.