Rent squeeze

Why is there so little debate about the fact that social housing rents are set to rise so much faster than prices and earnings?

Figures out this week from the ONS show that CPI inflation rose 1.9 per cent in the year to January and average earnings rose just 1.1 per cent in 2013. Earnings have now been falling in real terms since 2010, the longest period forat least 50 years.

And yet all around the country social landlords are preparing to increase their rents by at least twice the rate of inflation, and many times more than earnings, according to recent surveys by Inside Housing.

Read the rest of this post on Inside Edge, my blog for Inside Housing

Appearance and reality in the 2014 housing market

Combine one ex-PR man prime minister with one lucky homebuyer who’s also an estate agent, then add one ex-teacher turned buy-to-let mogul. Welcome to the New Year recipe for housing, where perceptions are everything.

David Cameron used Help to Buy as a metaphor for the Conservative message about economic recovery and opportunity for all when he took part in a photo op in Southampton with a young mum and her toddler and had tea in the new home she’s just bought through a government scheme.

It seemed standard, if rather awkward-looking fare, until this post appeared on the internet claiming that the young mum, Sharon Ray, was actually Sharon O’Donnell, a sales director with the estate agent that allegedly sold the home. That was followed by a typically sexist story about the ‘attractive blonde’ in the Mail and this corrective about some exaggerations and errors in the original post. Cue a Twitterstorm and debate between those seeing the whole thing as an example of Tory fakery and those outraged by the hounding of a young woman who’d done nothing wrong.

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10 things about 2013: part 2

Here’s the second part of my look back at the key themes I’ve been blogging about this year.

6) Help to Buy

If the bedroom tax was the subject I blogged about most in 2013 (see Part 1 of this blog), Help to Buy was certainly the best (or worst) of the rest.

The first hints of the scheme came in January as the coalition published its Mid-Term Review. Perhaps conscious of the gap between rhetoric and reality when it came to the government’s record on housing, David Cameron promised more help for people who cannot raise a deposit for a mortgage, with details to come in the Budget. By March Cameron and Clegg were promising what sounded to me like the coalition’s fourth housing strategy in three years. And in the Budget George Osborne duly announced what I called a huge gamble, loosening the targeting of previous schemes at first-time buyers and new homes and extending the help available much further up the income scale.

Read the rest of this post on Inside Edge, my blog for Inside Housing

Sanctions impact

As everyone focuses on the bedroom tax, there is worrying evidence today of the impact of another part of the benefits system on vulnerable homeless people.

Tougher benefits sanctions were introduced in October 2012 for people on job seekers allowance (JSA). The period that benefit can be stopped increased from between one and 26 weeks to four weeks and three years. Changes for those on employment support allowance (ESA) followed in December 2012.

The changes are part of steadily escalating conditionality requirements, including the claimant commitment that will be introduced in 100 job centres a month from October as part of the government’s conviction that ‘looking for work should be a full time job’.

Read the rest of this post on Inside Edge, my blog for Inside Housing

Never knowingly undernudged

So-called ‘John Lewis-style mutuals’ are (depending on your point of view) the future of the public sector or a euphemism for privatisation. However, the expression may have some unexpected implications for the government.

Cabinet Office minister Francis Maude launched a competition today to find a commercial partner for the government’s Behavioural Insights Team – or Nudge Unit. He described the move as ‘employee-led’ as the 12 Nudge staff have led the process and will continue to run the organisation. Reports suggest that private companies will be invited to bid for a stake of up to 50 per cent in the new business in return for the government guaranteeing long-term contracts. The staff and the government would also own stakes.


The Nudge Unit is claimed to have already saved the government millions of pounds although it not quite clear how. It hit the headlines for different reasons today when it was revealed to be behind bogus psychometric tests for jobseekers. It is best known to me as the unit that the DCLG failed to consult when it introduced the New Homes Bonus in a bid to change the behaviour of local authorities and I wonder what, if anything, it had to say about the behavioural impacts of welfare reform that the DWP found impossible to quantity.

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Putting the cap on it

Amid claim and counter-claim the benefit cap began this week with a deepening mystery about how many people will be affected and how much it will really save.

As the four guinea pig boroughs in London – Haringey, Croydon, Enfield and Bromley – began applying the cap on Monday, the Department for Work and Pensions revealed in ad hoc analysis that it now expects 16,000 fewer households to be affected by the time when it is introduced in the whole country over the next few months.

Read the rest of this post on Inside Edge, my blog for Inside Housing

The rise of the property-owning plutocracy

If you had to think of one article of faith for the Conservative Party, a property-owning democracy would come pretty close to the top of the list.

David Cameron reached back to the idea in his ‘magic money tree’ speech yesterday:

‘It is important that people who work hard and do the right thing are able to buy a home. As I said in my party conference speech – it is a rebuke to those of us who believe in property owning democracy that the average age for someone buying their first home today, without any help from their parents is 33 years old. And we are determined to tackle that.’

The prime minister was clearly hinting at something to come either in the Budget or the housing announcement he’s planning just before it. Whether that’s a new stamp duty holiday, or an extension to FirstBuy or even perhaps making existing homes eligible for NewBuy remains to be seen.

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Accounting for the new self-employed

A report out today from the ONS confirms the big increase in self-employment in the UK seen since the start of the Global Financial Crisis.

As a result of the recessions that triggered, the number of employees fell by 434,000 between 2008 and 2012. In complete contrast, the number of self-employed people rose by 367,000 over the same period, with 219,000 of that coming between 2011 and 2012.


Source: ONS

These are remarkable figures, especially when you consider, as the FT data blog points out, that self-employment has actually fallen in most other countries in the OECD.

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The state of self-employment

The conjunction of the deadline for self-assessment tax returns and the start of my 21st year as a freelance has got me thinking about self-employment.

Like most people I’ve found there are good and bad sides to working (at least in theory) for yourself. The feeling of not being tied to one particular employer and of (at least in theory) being free to do anything you want are both potentially liberating. Not being dependent on one organisation for your living should mean you’re better off than its employees in a downturn (at least in theory). You can offset your (legitimate, please note, HMRC) expenses against income and if you are more high-powered than me you can even found your own personal service company and employ yourself. A combination of self-employment and technology has enabled me to live and work in a part of the country where reasonably paid full-time jobs are a rarity.

On the downside, if you work mainly at home self-employment can leave you isolated from the sort of workplace life that everyone takes for granted. If you work mainly inside workplaces a thick skin is sometimes required when you have to watch complete idiots take charge (in my case thankfully not for several years, I hasten to add!). If you’re doing well, your leisure time can get squeezed. If you’re doing badly, it will be spent worrying that someone will pay you on time to pay the bills. You have few legal rights, though I’ve only been let down badly a couple of times and the rights of employees are steadily disappearing too. Your debts may well be higher than those of an employee. And if, say, a government comes along determined to cut public spending in the middle of a recession you can find sources of income rapidly drying up because the freelancers are the easiest people to cut. Thanks, George!

But enough about me: what about the state of self-employment as a whole?

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Squeezed out

Housing is the big thing missing from today’s major report on living standards from the Resolution Foundation.

The final report of its Commission on Living Standards looks at the plight of low and middle income families. Things were bad even before the crash with average incomes falling by £570 between 2003 and 2008 as growing inequality meant that prosperity was not shared around. The gap was only made up by a £730 a year increase in tax credits.

Read the rest of this post on Inside Edge, my blog for Inside Housing


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