Do you recall the Abbey Habit? If you were born before 1990 you may remember a time when our High Streets were littered with building society branches. A century ago there were over 2,000 building societies. Only 45 remain and, apart from the Nationwide, most are small regional outfits. Does the disappearance of building societies hold any lessons for the affordable housing sector? I believe so.

The first building societies appeared in the late eighteenth century and tended to be “terminating” bodies – their members bought land to build homes and then liquidated the society once this had been achieved. But these were slowly replaced by “permanent societies”, taking deposits and lending to homebuyers over the long term. Their core values were based on mutuality and self help, and their rules limited what they could do as corporate bodies. Each member had a single vote and there were restrictions on mergers and takeovers. They were also prudent lenders, which helped to limit house price inflation. All slightly dull perhaps, but building societies were the main providers of mortgages for most of the twentieth century and responsible for a huge increase in home ownership – from 23 percent in 1918 to 70 percent by the end of the century. They did more to change the social fabric of the UK than any other financial institutions.

But all this changed with the 1986 Building Societies Act, which allowed them to offer retail banking services and to de-mutualise if 75 percent of their members voted for it. Banks were also allowed to offer mortgages. The distinction between banks and building societies became blurred. Does this sound familiar?

Over the next decade most of the largest societies voted to de-mutualise. Borrowers and depositors opted for a fast buck (I was one of them) without any real understanding of the wider consequences of demutualisation. Boards and executives were keen to privatise because their salaries soared and it offered opportunities for mergers and takeovers – the empire builders had arrived. Does this sound familiar?

The largest societies – Bradford & Bingley, Abbey National, Halifax, Alliance & Leicester, Northern Rock and The Woolwich – all became banks. Yet not one of them now exists as a separate legal entity – all of them have been swallowed up by Santander, Lloyds, Barclays and the other big banks. This agglomeration created banking behemoths that were “too big to fail” and paved the way for the credit crisis and the hit on the taxpayer when the whole structure collapsed.

So over a twenty-year period an entire sector virtually disappeared, and the vast majority of the British public is worse off as a result. In 2006 an all party Parliamentary report concluded that the demutualised societies offered less choice, were providing more expensive products and that the main beneficiaries of de-mutualisation had been executives and non-executives. Between 1993 and 2000 the total remuneration of chief executives in demutualised societies increased by 293 percent, compared to only 65 percent in mutual societies. And on top of this, the advisers, lawyers and bankers in the City picked up over £1 billion in fees. But the reckless lending following the 1986 Act also contributed to house price inflation.

If you believe it is far-fetched to think that this could happen to the affordable housing sector, think again. According to the HCA’s global accounts our sector has assets of £71 billion and annual turnover of £14 billion. These are big figures and an attractive meal ticket for the money men in the City. Our sector is being increasingly squeezed by reduced levels of grant and an increasing reliance upon private finance and market products. Not only will the City exert a growing influence but, it seems to me increasingly likely that some Boards and Executives, ever anxious to expand their empires, will be tempted to morph into private sector companies.

The recent heated debate about “that” Bromford open letter has highlighted a division within the sector between “traditionalists” and those who increasingly seek to ape the memes and mantras of the private sector. For the latter group, “old fashioned” social housing seems to be trailing somewhere in the background but, like Building Societies discarding mutuality, prudence and stability, if we discard social housing what are we for exactly? What then sets us apart form other private sector providers, who in most cases can do the private sector stuff much more efficiently and ruthlessly than we can?

So if I had a message for those who want to go down the private sector route it would be this. Don’t be seduced by the whizz and bang of the private sector. Stick to your core principles of social housing and a social purpose. Your equivalents in the building society movement forged ahead with the same degree of optmism and bravado as you, but they were defenceless against the big beasts of finance and they ended up leading their organisations over a cliff, albeit with a fat pension in their back pockets.

The example of the Nationwide should be an example to us all. They stuck to their principles, refused to demutualise and have just posted record profits. Being “dull” has its merits.

Note: With thanks to Tom Murtha who prompted the original idea for this blog.

(First published at Inside Housing 26th November 2013)

I’m setting off for Manchester shortly, but I thought I would leave you with one of those quirky housing stories that this blog is fond of.

I believe I first became aware of the Mole Man of Hackney in the nineteen-eighties, when I lived in Hackney Wick. But I may be wrong, for this is a story that is so Gothic, so bizarre, that it seems to belong more to mythology than to real life. Charles Dickens would have loved this case of a classic English eccentric who, quite literally, undermined the peace and tranquility of his neighbours. Iain Sinclair, the chronicler of hidden London, devotes a chapter to the Mole Man in his recent book: “Hackney, That Rose-Red Empire”.

In brief, William Lyttle was a civil engineer who bought a pair of semi-detached houses in Mortimer Road, De Beauvoir Town, Hackney in the early seventies. He started building rickety extensions in the garden, which was soon filled with assorted car wrecks and piles of junk. But he also had a strong desire to “improve’ his property by creating new spaces beneath the house. Unbeknown to his neighbours and using only a shovel and a homemade pulley system he tunnelled into the soft London clay and built a vast network of tunnels beneath and beyond the property, stretching for 20 metres in all directions, some going down ten metres. Some of them were big enough to stand up in. He planned a leisure centre and a sauna, but it was only when a bus fell into a hole in the road outside the property that the Council became aware of his activities. After years of legal action he was finally evicted by Hackney Council in 2006 and ordered to pay £350,000 towards the cost of remedial works. Hackney’s engineers took away 20 tonnes of material from the property and estimated that he had excavated 100 cubic metres of soil.

After his eviction, he was put up in a hotel for three years and then re-housed on the top floor of a council block. But he continued his excavations and knocked holes into several of the walls, causing a huge amount of damage, until he was found dead of natural causes in 2010 aged 79. His Mortimer Road property is now to be auctioned and is expected to fetch £750,000.

For myself, I can think of little worse than the thought that someone was digging beneath me and undermining my house, unseen and unheard. Conventional anti-social behaviour can be dealt with eventually, but William Lyttle’s activities were of a different order completely. Part of me believes that he must have been THE neighbour from hell, (or at least from the underworld!), but I also admire his eccentric individuality. But was his obsessive behaviour any different from that of Joseph Williamson, the man who built the strange network of tunnels under Liverpool? Lyttle could devote just his own labour to the task, but Williamson had an army of unemployed workers at his disposal.

You can read more about the Mole Man of Hackney here and here. The Daily Mail story helpfully includes a photograph of a real mole, just so that you distinguish between it and Mr Lyttle!THE neighbour from hell

(First published at Inside Housing 2th June 2012)

There’s an old football chant that goes: “And if, you know, your history, it’s enough to make your heart go woooooaahh…..”

For people who work in housing I think it’s always rewarding to look back at the historical record and to remind ourselves of the awful living conditions that people endured in the not so distant past. At a time when the social housing sector is under attack it is also helpful to reflect upon the immense improvements that social housing providers have made to the lives of millions of people.

I wrote about Charles Dickens last week, and came across this extraordinary letter sent to the editor of The Times newspaper. It was signed by 54 people living in a slum in St Giles, London, on the site where Centre Point now stands.

Amazingly, The Times published the letter on July 5th 1849 under the headline “A Sanitary Remonstrance”. The spelling is as in the original.

THE EDITUR OF THE TIMES PAPER

Sur, — May we beg and beseech your proteckshion and power. We are Sur, as it may be, livin in a Wilderniss, so far as the rest of London knows anything of us, or as the rich and great people care about. We live in muck and filth. We aint got no priviz, no dust bins, no drains, no water-splies, and no drain or suer in the hole place. The Suer Company, in Greek St., Soho Square, all great, rich and powerfool men, take no notice watsomdever of our complaints. The Stenche of a Gully-hole is disgustin. We all of us suffer, and numbers are ill, and if the Colera comes Lord help us.

Some gentlemans comed yesterday, and we thought they was comishioners from the Suer Company, but they was complaining of the noosance and stenche our lanes and corts was to them in New Oxforde Strect. They was much surprized to see the seller in No. 12, Carrier St., in our lane, where a child was dyin from fever, and would not believe that Sixty persons sleep in it every night. This here seller you couldent swing a cat in, and the rent is five shillings a week; but theare are greate many sich deare sellars. Sur, we hope you will let us have our complaints put into your hinfluenshall paper, and make these landlords of our houses and these comishioners (the friends we spose of the landlords) make our houses decent for Christions to live in. Preaye Sir com and see us, for we are living like piggs, and it aint faire we shoulde be so ill treted.

We are your respeckfull servents in Church Lane, Carrier St., and the other corts. Teusday, Juley 3, 1849.

Signed by John Scott, Emen Scott, Joseph Crosbie, Hanna Crosbie, Edward Copeman, Richard Harmer, John Barnes, and 47 others

I don’t think I need to add anything to that. It speaks for itself. What became of these “corts” and their residents I do not know.

(First published at Inside Housing 13th February 2012)

William Barnes was Director of Housing when I joined Camden as a fresh-faced housing management trainee over thirty years’ ago. From his sixth floor office in Bidborough Street, just south of St Pancras Station, he managed an empire of 40,000 homes. Four floors below, the Chairman of Housing, a councillor called Ken Livingstone, had his own office in the department (a rather radical notion at that time) and was often to be seen eating alone in the staff canteen wearing his trademark safari jacket.

To most of his staff, Barnes seemed a rather remote and patrician figure, but I’ve just read his obituary in The Times (he died in July aged 92) and it reveals that he was a truly radical and visionary Director, who made a lasting contribution to London’s housing. He arrived at Camden in 1970 when waiting lists were growing and realised that the Borough had to take a comprehensive view of housing that embraced all of Camden’s population, not just the service provided to council tenants. He developed one of the best housing aid centres in London and led a massive programme of municipalisation, buying up whole streets of Victorian terraces and converting them into flats, often using compulsory purchase powers. Many General Improvement Areas and Housing Action Areas were created, where enforcement action against poor private sector landlords was taken and environmental improvements carried out. He also ran a huge building programme of 3,000 homes a year, delivered by the Council’s own architects’ department.

Barnes also felt passionately about training and staff development. He recruited many bright graduates – many of them now senior figures in the housing world – and set up a housing trainee scheme.

William Barnes was the son of the Bishop of Birmingham and educated at Westminster School and Trinity College Cambridge where he took a First in classics. A lifelong Quaker, he was a wartime conscientious objector and served with the Friends Ambulance Unit. After the war he became a civil servant and was involved in setting up the London Business School. He had a passionate belief in mixed communities and Camden had a policy of buying sites in the richer parts of the Borough, such as Hampstead and parts of Holborn, to build award-winning estates, often to the chagrin of local wealthy residents who found themselves living next door to people they saw as undesirables. But take a walk around many parts of Camden today and you will see the legacy of this vision – well- kept and well-designed council blocks jeek by jowl with private mansion blocks and expensive Victorian houses. It is not surprising that a Camden address is one of the most sought-after in London.

The remarkable thing is that he did all this during the seventies – a decade of recession and political instability, much like our current decade. He built new homes on a scale that is almost unimaginable today and provided a comprehensive housing service that is a foundation stone of our present approach. It is quite a legacy. Now, with little to distinguish between Labour and Conservative housing policy it makes me wonder if we have any comparable visionary figures in our sector?

(First published at Inside Housing 7th November 2011)