Cladding Chaos

This week, the Commons voted by 263 votes to 0 to urge the government to speed up remediation works on buildings with unsafe cladding. Several Conservatives spoke against the government, although they all ended up abstaining on the vote. The vote will not be binding, but it shows that the cladding scandal is an issue that cuts across party lines. It has even made it to the pages of The Spectator. On this issue, caveat emptor does not apply, it seems.

In June 2017, just after the Grenfell fire, I wrote a blog for Inside Housing in which I said: “But as time goes on I am certain that cladding and fire safety concerns will be uncovered in all sectors and all property types. Above all this will become an urgent issue for legislators and the government. They will both need to take a hard look at their primary role – to keep us safe. This they have not done.”

If you read Inside Housing’s timeline of the cladding scandal, it builds up month after month like a distant tsunami until it becomes overwhelming. Immediately after Grenfell, the government assumed the problem was mainly confined to the social sector and that only a few buildings with ACM cladding would be affected. Later, it was estimated that around 700,000 households were affected. Almost four years on from the fire, not only has dangerous cladding been found in all sectors and property types but if you include blocks of less than 18 metres with all forms of combustible cladding there could be perhaps 100,000 buildings involved, with up to 11 million people affected. Many have no immediate prospect of relief: they cannot sell, re-mortgage or staircase their homes.

Yet from the outset the government promised to act to make building owners carry out remediation works and pledged that leaseholders would not have to pay. In December 2017, Sajid Javid told private building owners not to pass on costs to leaseholders but that is exactly what is happening with some leaseholders being charged up to £600 a month to pay for waking fire watches.

The government has made a total of £1.6bn available to help with the cost of works but it is estimated that around ten times that amount will be required. The pandemic is likely to cost us well over £400bn, so the government could easily add a bit more to that bill in order to resolve this tragedy.

Meanwhile, hundreds of thousands of leaseholders are stuck in limbo, sandwiched between their building’s owner and the government with an unsellable property. Every day, heart wrenching stories of bankruptcy, depression and suicide emerge.

When the National Audit Office looked at this last year it found that the pace of remediation was painfully slow. By April 2020, 456 buildings had been identified with ACM cladding (the type used at Grenfell) but only 149 had been fully remediated.

Why should buying a house be any different from buying a car or any other product? If the product is defective then you would expect to be compensated and not to suffer financially. When you buy a new car, or a new home, most of us have little idea what is under the bonnet, or behind the walls. You buy bricks and mortar and you assume that the place is built on solid foundations, that the structure is sound, that the builder has used safe materials both internally and externally, that there is insulation in the walls, that the windows fit properly and that it will be fit to live in for several decades without any major remediation.

Above all, you assume that you can insure the property and take out a mortgage. You buy largely on trust. ‘Safe as houses’ goes the saying. Of course, most people will employ a surveyor to check the property – but anyone who has bought a home will know that surveyors’ reports are riddled with caveats, listing all the things that he or she was not able to see.

Likewise, the builder will take on a warranty from the likes of NHBC, LABC, or Zurich. You also naively assume that these outfits have inspected the property before issuing a warranty, that the builder has employed a clerk of works to inspect the work in progress, that the local authority building control team have visited the site at least once to ensure it is being built in accordance with the approved plans.

In fact, it is likely that few of these things have happened. Ever since the building control teams were privatised in 1985 and design and build contracts were introduced, most of the onus now sits with the contractor. He can choose his own independent inspector. Everything is done on trust. Add this to the mix of a booming housing market where you can sell any old rubbish and you have a recipe for certain disaster.

As the Grenfell public inquiry has shown, the contracting system is now so opaque that everyone can blame everyone else. The buck stops with no one. Dame Judith Hackitt summed it up in her report: “The mindset of doing things as cheaply as possible and passing on responsibility for problems and shortcomings to others must stop.”

With any luck the measures in the Building Safety Act will help to improve the situation but we will have to wait for the final report of the Public Inquiry, which I hope will lead to a fundamental review of the Building Regulations.

Actually, I have some sympathy with building owners. After all, it was the government and its agents that wrote the Building Regulations and deemed many of these deadly materials to be safe. It was this and previous governments that privatised building control and determined that we should build ‘as cheaply as possible’. We need to return to a regime where quality and safety come first. There might be a short-term cost but the long-term benefits will be much greater.page2image2326387024

(This blog was first published by The Housing Quality Network on 3rd Feb 2021)

A House Divided

Are you upset, angry and depressed? I hope so. After 10 months, we seem to be back at square one with a punitive lockdown that will hit the poor and the badly housed the hardest, stuck with a useless government that has failed at every step.

I imagine that most people who work in housing care about inequality. I have always believed that disparities in income, health and mortality can be reduced if you live in a safe, affordable home.

Over Christmas, I watched It’s a Wonderful Life for the umpteenth time and was struck again by George Bailey’s speech to the directors of the Building and Loan, when he tells them that good housing makes people better customers and better citizens and that the “rabble” living in the villainous Mr Potter’s slums “do most of the working and paying and living and dying in this community”.

It's a Wonderful Life has some lessons for the UK as it deals with the pandemic (picture: Alamy)

It seems nothing changes. During this pandemic it is the same people – the badly housed, the poor, the disconnected – who have been doing most of the dying, and suffering most of the pain.

The rise in inequality over the past year has been confirmed by the latest study from the Institute of Fiscal Studies.

COVID-19 has exacerbated inequalities between the high and low-paid and between graduates and non-graduates. The self-employed have suffered more than those with safe jobs. Pupils in private schools are forging ahead. Deaths from COVID-19 among some Black groups have been twice those among white British people. Above all, mortality rates from COVID-19 are twice as high in the most deprived areas as in the least deprived between March and July last year. That relates directly to bad housing.

Another study by the Health Foundation finds that bad housing has hampered people’s ability to shield from the virus and that London’s shared housing led to an exodus from the capital that spread the virus across the country. As I wrote here back in June, bad housing kills.

Since day one of this pandemic I have been concerned about the wider impacts of lockdowns and the growing divide between the rich and the poor. Lockdowns should be a last resort, yet they have become the weapon of choice for this failing government.

What happened to our £22bn world-beating test and trace? What happened to the Nightingale hospitals that were supposed to protect the NHS from being swamped? Why has so much money been wasted on contracts with corporate buddies? As an island nation we could have done more to suppress the virus, as New Zealand and Taiwan have done.

But it seems to me that all the decisions and the cheerleading for tougher restrictions have come from those who are well-housed and well-off in safe jobs, with scant regard for those who are most affected.

It will be some time before we fully understand the surges in domestic violence, suicides, deaths from cancelled operations and treatments, and the mental health impacts. Yet government should aim to balance all these wider impacts in their policy decisions, but this they have utterly failed to do.

Residents in social housing face a double whammy, disproportionately dying and suffering both as a result of the virus and the impacts of lockdowns.

I do not think I have ever despised any government more in my lifetime. Even Margaret Thatcher, whatever her faults, a competent politician and a scientist, would not have presided over such chaos.

When this is all over, we need to see two major events. First, the mother and father of all public inquiries so that the guilty can be named and brought to account. Second, a recognition that bad housing has underpinned much of the harm that has been caused by this virus.

We need a year-zero reform of housing policy, so that we can stop building some of the smallest and shoddiest homes in Europe, so that we can reform planning policy to release more land for new homes, so that assets can be distributed more fairly between rich and poor and between old and young, and so that everyone can have access to a safe and affordable home that meets their needs. Let your anger make it happen.

(This piece first appeared in Inside Housing on the 7th January 2020)

On strike!

Across the country, students are rebelling against high rents and lack of tuition. Over 20 universities are now affected.

This week I received an email from University of London students who are organising a rent strike, angered by rising rents, arbitrary quarantine measures, poor maintenance (“urine-stained shower curtains, mould, toilets shut for months, and forcing entire floors to share 4 or 5 toilets”) and a lack of tuition during the pandemic.

Many students feel they’re being treated as cash cows by universities that increasingly resemble hard-nosed commercial enterprises, often paying their vice-chancellors huge salaries: the president of Imperial College is receiving over half a million pounds annually.

This isn’t new. Between 1972 and 1985, students at the University of Sussex went on rent strike several times to protest at rent rises and the construction of new accommodation without consultation (my daughter went there, I can vouch for some of the awful stuff they put up). In the 1970s, dozens of universities were hit by rent strikes, and student protestors achieved some success in limiting rent rises or changing policies.  

(This doesn’t quite chime with my experience as a student in the seventies. We had local authority grants to cover fees, rent and most living expenses. Perhaps we didn’t realise how lucky we were!)

More recently, in 2016, over 1,000 students at University College London went on rent strike and won over £1.5 million in concessions in the form of rent cuts, compensation and bursaries.

Beyond the university sector, there’s a powerful history of rent strikes in the UK. In Glasgow during World War One, there was an influx of workers, mostly women, into the munitions factories and shipyards, and private landlords tried to hike rents by up to 25% to profit from the rising demand for space.

Women workers formed the Glasgow Women’s Housing Association and organised a rent strike that was supported by 25,000 tenants. The protests spread across the country to Northampton, Birmingham, London, and Birkenhead where one protest banner read, “Father is fighting in Flanders, We are fighting the landlords here”.

In November 1915, the government, scared about the impact upon wartime production, caved in and passed the Rents and Mortgage Interest Restriction Act, which limited rent increases and the amount of mortgage interest that could be charged. The rent strikes were partly responsible for the Addison Act of 1919 which promised “Homes fit for Heroes”.

The 1915 Act was the first time that rents had been controlled in the UK. It was meant to be a temporary measure but the pressure from activists, and the threat of future rent strikes, was such that some of its measures were not repealed until 1988, during Margaret Thatcher’s premiership.

During the twenties and thirties, the militancy continued with rent strikes across the country to protest about rent levels and poor conditions. These actions undoubtedly had an impact upon government pledges to build more council houses. 

In 1958, tenants in St Pancras borough went on a rent strike to protest about rising rents. There were marches, a 16,000-person-strong petition, and riots, until the strike was defeated with mass evictions and the Public Order Act was invoked, banning all further protests.

More recently, Ted Heath’s Housing Finance Act of 1972 sought to increase council rents by making them closer to private rents. It was met with protests and rent strikes across the country. Nearly 50 councils refused to implement the Act, but the one that held out the longest was the Urban District Council of Clay Cross in Derbyshire where 11 Labour councillors refused to increase average rents of £1 and 12 shillings a week by £1 a week.

Tenants organised a rent strike and the district auditor was sent in, but the council refused to co-operate. A year later, all 11 councillors, including two of Dennis Skinner’s brothers, were found guilty of ‘negligence and misconduct’, fined a total of £6,985 plus £2,000 costs and disqualified from office. They were bankrupted.

Lord Denning, in confirming their disqualification from office, declared “They are disqualified. They must stand down…I trust there are good men in Clay Cross ready to take over”. There were. A year later, by-elections returned ten out of 11 councillors who pledged to continue the resistance! But that same year Clay Cross UDC ceased to exist as it was merged into North East Derbyshire council under local government re-organisation. The new council complied with the law.

The 1972 protests had an echo in the rate capping protests in 1985 when 15 councils refused to set a legal rate, caving in one by one until only Liverpool and Lambeth were left.

Are there any lessons for our sector in this brief history of rent strikes? I think so. One lesson is that tenant militancy can produce results. In some respects, going on rent strike is the ultimate manifestation of tenant involvement and activism. In the past, it’s led to government putting more money into council housebuilding.

But the recent housing White Paper also has a heavy emphasis on treating residents with fairness and respect. The way that rents are set is at the core of fairness and respect, and there’s a danger that some of the recent changes in rent policy have deviated from both principles.

To my eye, charging “Affordable” rents of over £400 a week is neither fair nor respectful and I’m surprised that there haven’t been more protests, especially when tenants living in identical neighbouring properties are being charged widely differing amounts. Once the rent is set, increases are capped, of course, but tenants have no say in the rent that they’re charged at the outset.

Rent strikes have had a patchy record of success, but there’s little doubt that they’ve pushed though changes in national and local housing policies.

As a sector, I’m fairly sure that we’d not wish our residents to withhold their rent, so the lesson is that rents and the way that they’re set should be kept under close review. Any changes need to be incremental, proportionate and grounded in a sense of fairness. 

(This blog was first published by the Housing Quality Network on 10th December 2020)

On Panorama: put the social back into shared ownership

When I started out as a housing consultant over ten years ago, I was invited to lunch by a local chief executive. I thought he was going to offer me some work, but instead he offered me some advice. Specialise in service charges, he said, the sector desperately needs help and you will make lots of money. Regrettably, I did not follow his advice (it would have bored me to death, frankly) but I know that he was probably right.

The problem of service charges was at the heart of last week’s edition of Panorama on shared ownership. It told the tale of several owners who had seen their charges soar within a few years, in one case up from £2,300 to £4,400 annually within the space of four years. Another was angry that they could not afford to buy their home outright because property prices in London had soared. One shared owner in the Cotswolds complained about being charged to extend her short lease of 80 years. There were also complaints about the cladding scandal and shoddy newbuilds.

(I have some personal experience of the latter point as my daughter has a newbuild shared ownership flat in South London that has been beset by defects.)

As a product, there are clearly some concerns about shared ownership, which I discuss below, but the problem with this programme was that, like much journalism these days, it sought to make wider points about a subject from a series of anecdotes. The programme mentioned that a recent Nat Fed survey (quoted by Kate Henderson) had found 21% of shared owners were dissatisfied, which implies that 79% were, if not satisfied, at least not dissatisfied. In fact, Kate mentioned that 60% were satisfied overall, which is not a great result, but it does not prove a widespread failure of the product itself.

Some parts of the programme were also downright misleading. In one segment, a large London provider had bought a block with a 999-year lease and was criticised for offering only 125- year leases – but surely the model lease recommends 99 or 125 years? Even if the provider owned the freehold of the block they would not offer more than 125 years, surely? As for the shared owner in the Cotswolds who complained about having to pay to extend her lease, this is based on a standard formula applied to all leaseholders, on the basis that any lease under 80 years starts to fall in value.

Coming back to service charges, I think my first challenge to landlords, as a leaseholder, would be to determine if owners are being treated on a level playing field with tenants in similar properties. I can remember the debate in the eighties about the unfairness of council estate tenants paying twice for street lighting and pavements through both their rent and their rates, when private owners only paid through the rates. I am fairly sure that some service charge departments are under-resourced and lacking in knowledge and skills, and do not fully appreciate the impact of their deliberations upon people with limited incomes. They obviously need some consultancy help!

But what the programme did expose, for me at least, is that shared ownership has an identity crisis. It is neither fish nor fowl. It comes under the heading of social housing and yet owners are largely left to their own devices and treated as if they were commercial buyers. Landlords often know less about their shared owners than they do about other tenants, something I wrote about here. There is also clearly a sense of unfairness that you could own, for example, 30% of the property and be responsible for 100% of repairs, as well as a lack of clarity about what happens to the rent that is being charged on the unsold equity.

What many of these owners seemed to have a gripe about was that their landlords treated them as if they were buyers in the private market, rather than applicants for a social housing product. They wanted landlords to be more open upfront about the pitfalls of their lease and to be more transparent about service charges, rather than expecting purchasers to understand all the legal intricacies (many lenders and lawyers do not fully understand the product for heaven’s sake!). I think it was therefore wrong for the Nat Fed to place the blame on solicitors.

With the government set to re-launch the shared ownership model and allow initial sales of 10%, the complaints we saw in Panorama are bound to rise. If it is to be re-launched, it does need to be made simpler and more understandable to buyers, lenders, and lawyers alike.

But if you go back to the legislation, Section 70 of the 2008 Housing and Regeneration Act defines shared ownership as, “accommodation…made available in accordance with rules designed to ensure that it is made available to people whose needs are not adequately served by the commercial housing market”.

So, I think we also need to bring shared ownership firmly back under the “social” umbrella and treat buyers with greater openness, fairness, and respect (as the Housing White Paper requires), rather than as outright commercial punters to whom caveat emptor applies. The sector might shift fewer “units” (I hate that term) as a result, but it would add to the sum of human happiness, and that is what we are here for, I hope?

(This blog was first published by the Housing Quality Network on 3rd December 2020)