If anything should help dispel the notion that Theresa May is Margaret Thatcher 2.0, it should be her speech today at the National Housing Federation – the body which represents housing associations – pledging an additional £2bn for affordable and social rent homes.
While questions hang over how new the money pledged today actually is, the very fact May delivered a call-to-arms for housing associations to do more, when the last Conservative Prime Minister promised to sell off their properties under a reinvigorated Right to Buy, shows a real shift in Tory attitudes towards affordable housing. It also counters the complaint heard often at last week’s RESI Convention that you can’t build subsidised housing without subsidy.
Depending on how generous you want to be to the PM, you could view today’s announcement as part of a genuine wider programme to address Britain’s ‘burning injustices’ or a realisation that Right to Buy – Thatcher’s flagship housing policy – isn’t the electoral tonic it was cracked out to be. Intended to make Britain a property-owning democracy, Right to Buy may have, somewhat ironically, sown the seeds for today’s Corbyn-voting Generation Rent, with many ex-council flats now in the hands of buy-to-let landlords.
Yet there was a far more interesting nugget on what future Tory housing policy might look like also at last week’s RESI, in the housing minister Kit Malthouse’s keynote speech and follow-up Q&A session with BBC home affairs editor Mark Easton.
Echoing Chairman Mao in calling for a “thousand flowers to bloom, in terms of tenure, developers, innovation”, Malthouse later suggested exploring a market for ‘private social rent’ in response to a question on boosting supply. But if the housing minister had read his colleague Greg Clark’s correspondence, he would know there already is one.
Earlier this month the secretary of state for business, energy and industrial strategy wrote to the NHF pledging to protect the ‘housing association’ label from for-profit providers such as Sage, which Blackstone, the world’s largest property investor, has a 90% stake in. Grainger plc, the UK’s largest listed residential landlord, has had a registered provider for years.
As Metropolitan chief executive Geeta Nanda rightly argued in Property Week, there should be a distinction between profit-making and non-profit-making housing providers. However, as Geeta also argued, we shouldn’t be looking to exclude the private sector from affordable housing just because they turn a profit. This is especially true given big names like L&G and British Land, who can make a real difference to delivery, are already jumping into the sector.
I argued in an earlier blog, if packaged up right, affordable housing could be attractive to the same institutional investors backing build-to-rent. Clearly in a sector as tightly regulated and fraught with reputational risk as social housing, not everyone will take the plunge. But if the government helps clear the way, as Malthouse suggested they might, then more will.
No doubt greater private involvement in affordable housing provision will cause opprobrium in the usual quarters where profit is a dirty word but the truth is local authorities and housing associations don’t have the capacity to deliver all the affordable homes Britain needs. For Theresa May, a Prime Minister used to making difficult decisions, it should be a no-brainer: there is definitely room for the private sector in affordable housing.