Housing secretary James Brokenshire doesn’t understand housing OR pensions

Opportunity: you can wave bye bye to that. Image: Getty.

There’s a running joke in the Westminster bubble at the moment, if, by “running joke”, you mean something that you keep hearing that makes you want to cry. Several of the Tory leadership candidates have promised that fresh thinking under their leadership will end the Brexit impasse; yet their proposals are always, but always, things that have already been explictly rejected by the European Union (a time-limited backstop; technological solutions to the problem of the Irish border), making their thinking about as fresh as month-old milk.

I’m starting to wonder if this actually represents some deeper malaise in British politics, because it doesn’t just affect Brexit, and the latest wheeze from housing secretary James Brokenshire has a distinct whiff of familiarity to it. We’ve heard this before, haven’t we? At the very least, the problems with it are problems that have bedevilled almost every housing policy emanating from this benighted government ever since it took office in 2010.

Let’s hear from the Daily Telegraph shall we? Headline:

Allow young people to dip into pension pots to fund first home deposit, says Housing Secretary

And extract:

Mr Brokenshire will call on the next Prime Minister to reform pensions to allow young people to “make the choice for themselves” if they want to spend them on property instead.

He is expected to say in a speech at the Policy Exchange, the think tank: “We should be looking at allowing an individual to use part of their pension pot as a deposit on a first time home purchase.

“We should be changing the necessary regulations to allow this to happen, protecting the integrity of pension investments but allowing lenders to innovate and design new products to bring this opportunity to consumers.”

To the newspaper’s credit, its story is quite critical of this obviously catastrophically stupid plan, and quotes former Liberal Democrat pensions minister Sir Steve Webb laying into it at some length. But since we’re all here, let’s list the ways in which Brokenshire’s bad idea is bad:

1) It involves sacrificing retirement income – basic security in the future – to pay for home ownership – basic security in the present. Bad trade.

2) ...except it probably won’t even do that, because this policy would mean pouring more money into the housing market without building more housing, which is the absolute perfect policy for boosting house prices. So it would push basic security even further out of reach, and leave those who do manage to claw their way onto the housing ladder this way

            a) with a much reduced pension, and;

            b) at risk of the bubble bursting, leaving them having spent all their money with nothing to show for it at the end.

So: really bad trade.

3) Hey, you know what would create basic housing security for young people? Building more housing, or improving tenants’ rights. Funny how the housing secretary doesn’t want to tell Policy Exchange about those.

4) Implicit in Brokenshire’s plan is the assumption that young people have significant pension wealth squirreled away somewhere. This is probably more true than it was – auto-enrollment was introduced in 2012, and by early last year has been rolled out to every employer in the country, so most people with jobs will now have some kind of pension. Nonetheless, the average deposit a first time buyer needs ranges from around £20,000 in the north east to well over £80,000 in London. It does not seem likely, to put in gently, that most young people have enough saved up in their pension pots to cover their housing deposit.

So, to sum up, Brokenshire’s policy would make houses more expensive and leave young people facing poorer and less secure retirements. You know who would benefit? Existing homeowners, who don’t want the boom to end.

It’s a bad policy, is what I’m saying here. 

Which raises the question of why Brokenshire is promoting it. Does he not really understand the basics of either the housing market or the pensions system? Does he genuinely believe, against all available evidence, that ever rising house prices are a good thing? Or does he just want to impress some very right-wing people because a change in leadership, and therefore a big reshuffle, is on the way? Answers on a postcard.

This isn’t the only infuriating housing story to emerge over the last couple of days. There was also this delightful effort from the BBC...

Girl and Tonic blogger: 'Giving up booze helped me buy my house'

A blogger has told how giving up alcohol for good has helped her to buy her own three-bedroom house.

Laurie McAllister, 28, said one month she spent £1,000 just on going out, and that her lifestyle in London left her "struggling with anxiety".

....in which some genius of an editor took a story of someone’s personal struggle with alcohol abuse, and managed to frame it as a morality tale about how the only reason young people can’t hope for the same level of financial security as their parents is because they’re chucking away all their money on cocktails and other fripperies like rent.

You know what housing story I would genuinely like to read? A column from a 60 year old about how they spent their entire youth out of their mind on drugs, pissed away every opportunity that came their way, but somehow still own a massive house because they were lucky enough to be born in 1958. Honestly, if you’re out there in your massive house and fancy writing a tell-all column about it, pitch me.

Jonn Elledge is editor of CityMetric and the assistant editor of the New Statesman. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

Want more of this stuff? Follow CityMetric on Twitter or Facebook.


Jane Jacobs and Le Corbusier would agree on one thing: we need more social housing

Unite d’Habitation, Marseille. Image: Iantomferry/Wikimedia Commons.

Much has been written in CityMetric and beyond about the urban planning debates of the 1950s and ‘60s, that came to be characterised as a battle between master-planning and preservation. One side of the debate was personified by the father of modernist architecture, Le Corbusier, whilst the counter-argument was advanced by writer and journalist Jane Jacobs.

But when it comes to London’s housing crisis, aren’t there a few things that these two would actually agree on?

Jane Jacobs’ writing about the organic nature of self-organising communities, demonstrated, in her words, by the “intricate sidewalk ballet” of inner city neighbourhoods, should be required reading for anyone interested in how cities function. But today, Jacobs is increasingly invoked in attempts to oppose new developments of any kind. Her role in conceiving Manhattan’s West Village Houses, a low cost rented housing scheme built through New York State’s Mitchell-Lama Program, is unfortunately much less well known. It’s been suggested that if Jacobs were around today, she’d be working with New York’s housing activists. When her seminal work The Death and Life of Great American Cities was written, there were almost 2 million rent-controlled or rent-stabilised apartments in New York City; nowadays, there are fewer than half that number.

Le Corbusier, on the other hand, is too often blamed for drab high-rise blocks. But regardless of how well his followers across Europe interpreted his ideas, Le Corbusier’s vision for cities was about high quality residential blocks that also contained shops and leisure amenities and were surrounded by parkland – the original mixed use development if you like. His most famous building, Marseille’s Unite d’Habitation, consisted of 337 apartments with views of the mountains and the sea together with shops, a restaurant and a nursery school. The building was originally intended to be public housing, but the French government eventually sold off the flats to recoup costs. Alton West Estate in Roehampton and Park Hill in Sheffield are just some of the examples of Le Corbusier’s influence on the design of post-war council housing here in the UK.

Building homes for a serious business in post-war Britain. Under Attlee’s 1945 Labour Government, 700,000 new council homes were completed. In 1952, the largest architectural practice in the World was at London County Council, with 1,577 staff including 350 professional architects and trainees. These were the days of consensus, and very quickly Tory governments were actually competing with Labour governments about who could built the most council homes.

Some of the council homes built post-war have stood the test of time better than others. But what’s not in doubt is that building council homes on such a scale immeasurably changed the lives of so many families in desperate need of a decent, secure and affordable home. And so many of the post-war modernist high-rise blocks so despised by Jacobs quickly took on the organic self-organising traits that she held in such high regard and have become some of the most enduring and closely-knit communities in London.

Fast forward to 2019 and Right To Buy continues to decimate council housing stock, but perversely home ownership seems more out of reach than ever for so many. An entire generation is being forced to embrace long term private ting in a country that has some weakest protections for private tenants in Europe. Meanwhile, government spending on building new homes fell from £11.4bn in 2009 to just £5.3bn in 2015 – from 0.7 per cent to 0.2 per cent of GDP – and since then, the housing minister’s desk has been occupied by no fewer than six people.

So what would a comprehensive drive for new council and social housing on the scale of the 1945 government’s efforts look like in 2019?

Lubetkin, the architect responsible for Islington’s Spa Green Estate and Bevin Court, summed up the spirit of post-war council home building with his maxim that “nothing is too good for ordinary people”. It’s a vision that we’re trying to recreate through our own council home building programme in Islington.

One of the best opportunities for small council home building schemes is to expand upon existing communities. The vast majority of Islington’s new council housing takes the form of infill, construction on existing estates; in unloved spaces, in old garages, and in old undercrofts. These projects often involve landscaping and new amenities to enhance rather than reinvent local communities. We have built community centres and even rebuilt a library as part of council housing schemes. One Tenants’ and Residents’ Association had an idea for a new specialist over 55s block for the older residents of the estate who wanted to stay in their community.

But there’s a place for large-scale place making as well. When the Ministry of Justice closed Holloway Prison and announced that the site would be sold, Islington Council published a Supplementary Planning Document (SPD) on the site. We had one aim – to send a clear signal to the market that anyone who was looking at buying the site needed to be aware of their planning obligations. Most importantly, any development on the site needed to include at least 50 per cent genuinely affordable homes. The speculation around the site came to an end on 8 March this year when Peabody Housing Association announced that it had bought it. It has committed to going well above and beyond our planning requirements, by making 600 out of a total 1000 homes genuinely affordable homes, including 420 homes for social rent. We need to see more detail on what they are proposing but this is potentially brilliant for the borough. A local grassroots group, Community Plan for Holloway, have been instrumental in ensuring that the community’s voice is heard since the site was sold.

To recreate the scale of the massive post-war council home building programmes would require a Jane Jacobs inspired level of community activism combined with the architectural idealism of Le Corbusier. But it would also need the political will from central government to help local authorities get council housing built. And that, sadly, feels as far away as ever.

Diarmaid Ward is a Labour councillor and the executive member for housing & development at the London Borough of Islington.