Student Loans: goalposts moved retrospectively and makes saving for a home even harder

“Students have reacted angrily to major changes to how England’s poorest graduates will need to repay their tuition fee loans, which were excluded from George Osborne’s Autumn Statement speech yesterday.

As part of a raft of unpopular measures that will hit young people, the government confirmed its plans to change student loan repayment conditions in the spending review, potentially costing students up to £6,000 more, according to IFS estimates.

Despite previously promising students in 2010 the £21,000 repayment threshold would be raised in line with average earnings, Osborne announced it would be frozen for five years, saving the government up to £680m.

Even graduates who took out loans in 2012 will be affected, as the threshold freeze is to be backdated four years.

Martin Lewis, founder of Money Saving Expert, accused Osborne of not having “the balls” to announce the changes in his Autumn Statement speech.

“It is one thing to set up a system that is unpopular but it is entirely different to make retrospective changes that mean you cannot even rely on what you were promised at the time you started to study. Even though it was warned of the huge dangers of doing this, it’s still blundering ahead, ignoring all right thinking concern.

“The fact that the Chancellor didn’t even have the balls to put it in his Autumn Statement speech shows that he knew how unpopular it would be. If a commercial company made retrospective changes to their loan terms in this way they’d be slapped hard by the regulator – the Government shouldn’t be allowed to get away with it either.

“I’m deeply saddened, it’s chosen to act in this way.”

The IFS estimated the changes will mean graduates on average salaries will pay back £3,000 extra, while disadvantaged students will be even worse off. Those earning close to the median income will be made to pay back £6,000 more.”

Source: Huffington Post online

Developers profit yet again from housing crisis

“Campaign group Generation Rent said he [Osborne] was wrong to ‘hand the money to private developers instead of bringing down rents’. And Matt Hutchinson, director of flatshare site SpareRoom.co.uk, said: ‘Helping a select few buy homes doesn’t fix the wider affordability crisis.”

Source: Metro e-newspaper

East Devon: third highest median age in the country

Only Eastbourne (71.5)and King’s Lynn (69.7) have higher median age than East Devon (69.1):

http://gu.com/p/4eg9y

and only luxury retirement housing being built!

Social rent cuts will cause Devon job losses

How odd that social rents are being cut but private landlords can charge more than mortgage payments would cost (if our young people earned enough for deposits):

http://www.bbc.co.uk/news/uk-england-devon-34903886

More young people in poverty than over-65s

“The Joseph Rowntree Foundation found that 1.7 million people aged 16 to 24 are in poverty compared with 1.4 million people aged over 65.

Chief executive Julia Unwin said the young are being “locked out” of well-paid jobs and affordable homes.” …

http://www.bbc.co.uk/news/business-34897555

Pegasus to exhibit plans for Knowle

And no doubt to do a bit of marketing. Interesting that they have done test drilling and these plans before getting planning permission … just the little matter of councillors voting to decamp to Honiton.

Surely they all have a prejudicial interest and it should be called in? Not that it will help … Wonder how many apartments will be affordable – LOL!

“A spokesperson for the developer said: “We wish to consult with the local community before progressing our proposals and are holding two public consultation events, the first in November, to give local residents an opportunity to view and comment on our initial scheme.”

Representatives from the firm will be at the Woodlands Hotel, in Station Road, on Tuesday, November 24, between 2pm and 7.30pm, and again on Wednesday, November 25, between noon and 7.30pm.”

http://www.sidmouthherald.co.uk/news/pegasuslife_to_unveil_knowle_vision_at_pair_of_exhibitions_1_4317498

SW home buyers need 130% pay increase to afford homes

“Home buyers would have to increase their salary by 130% to afford an average home in the South West, a new report into housing affordability crisis has found.

An average house in the region now costs £240,427 – over 10 times the local average salary of £23,832, the National Housing Federation’s (NHF) Home Truths report has shown.” …

http://www.westernmorningnews.co.uk/Home-buyers-need-130-pay-rise-afford-average-home/story-28222174-detail/story.html

Should we allow foreign billionaires to buy UK property for investment?

It is astonishing that we allow, for example, millionaires in Singapore to buy land and property in Britain, but Singapore bars British and other foreign nationals from buying in their country.

Denmark prohibits non-EU nationals from buying a home unless they have lived in the country for five years – and, like Finland and Malta, is allowed by the EU to restrict EU citizens from buying second homes in the country. Australia has dramatically cracked down on foreign buyers who have pumped the property market in Sydney and Melbourne to absurd levels. Only Britain leaves the doors almost completely open.

The Bow Group proposes that foreign residents should be limited to the purchase of a single property, and only in the new-build sector, with penalties if they sell within five years. No new block should be more than 50% foreign-owned, it says. But the report goes further than just hammering foreign nationals – it wants the Bank of England to set a target where house prices average no more than four times income.

http://gu.com/p/4ec8t

Emerging local plans in jeopardy as status of starter homes unclear

Just another pothole on the way to,a Local Plan for East Devon:

“Local plan examinations in their early stages now run the risk of being caught by this new legislation,” she said. “If just submitted it seems to me likely that these plans will have to be altered to accommodate the 200,000 Starter Homes.”

Speaking on the topic of ‘Delivering new homes’, Cook noted that a lack of clear guidance about whether Starter Homes were classified as ‘affordable housing’ would throw uncertainty on the affordable housing numbers already allocated in emerging local plans.

She continued: “The introduction of Starter Homes casts applications into some doubt. What’s the [section]106 going to look like? How are you going to be designating those Starter Homes?

“You read the Bill and you realise you won’t find the answers to those questions. Quite how the 20 per cent market discount is going to relate to affordable homes will be different in different areas.”

– See more at: http://www.theplanner.co.uk/news/starter-homes-threat-to-emerging-local-plans#sthash.gMmEZM15.dpuf

http://www.theplanner.co.uk/news/starter-homes-threat-to-emerging-local-plans

Lobbying: dark art or vital part of democratic process?

Letter in Western Morning News from Justin Robbins, Yealmpton:

Your leading article on November 13 concerned the Countryside Land and Business Association and its new president Ross Murray, and it makes the outrageous claim that “in politics today lobbying ministers has gone from a dark art to a legitimate and indeed vital part of our democratic process.”

Surely the opposite is the case, lobbying ministers is still a dark art which is anti-democratic and potentially corrupting. It occurs behind closed doors so how can anyone assess its legitimacy?

It is hard to see how democratic principles apply to landowning in England and Wales where 33,000 CLA members own half the land. At a local level landowners have far more power than any elected representative, and their power is without any democratic accountability.

It is good to know that Mr Murray is concerned about the need for affordable rural homes (also WMN Nov 13). A major factor in the high cost of houses is the high cost of the land due to speculation and the way in which land value shoots up as soon as its use changes, through the planning system, from agricultural to residential, enabling landowners to gain hefty unearned profits. Profits that under a fairer system should revert to the community whose needs and activities serve to create the land’s value.

If Mr Murray could persuade his members to this view he would help solve the rural housing crisis. If not then Winston Churchill’s view will remain as true today as when he stated it over a century ago:

“Land monopoly is not the only monopoly but it is by far the greatest of the monopolies – it is a perpetual monopoly and it is the mother of all other forms of monopoly.”

http://www.westernmorningnews.co.uk/WMN-Letters-Lobbying-dark-art/story-28197396-detail/story.html

Think tank says economic growth being forfeited in favour of elderly

If economic growth is being sacrificed as this article implies, where does that put our Local Plan where it is the be-all-and-end-all of it? With no money for infrastructure who will live on new estates with no road connections to employment areas? Who will buy the houses? Who will be able to afford them? Where will the jobs come from with the wages high enough to pay for the houses that young people can’t afford to buy or rent?

” … The Resolution Foundation calculates that, from 2010 to 2019, the budgets for current spending will have been cut by 75% at the Department of Transport, by 64% at the Department for Communities and Local Government and by 53% at the Department for Business. Capital spending is not included in the calculations. By contrast, the NHS budget will have risen by 14% over the same period and the international development budget increased by 40%.

The thinktank questioned whether politicians had thought sufficiently about the reshaping of the state brought about by the mix of cuts and the protections provided to specific departments and age groups.

The foundation said: “While the focus of the autumn statement will largely be on how the pain of spending cuts has been spread around departments – as well as any changes to tax credit reforms – it’s important to step back and consider what the chancellor’s plan means for the long-term role of the state and the support it provides across different parts of the population”.

The thinktank found a growing generational divide since the financial crash, with average spending per head set to fall by 7% for children and 9% among working age adults.

In contrast, spending per capita on older people will rise by about 19% over the same period. By the end of this decade, spending on the state pension will account for more than half of all welfare spending. This is despite the big shift in welfare spending towards pensioners being cushioned to some extent by significant increases in the state pension age since 2010, culminating in a rise to 66 for men and women in 2020.

Continued demographic changes post-2020 are likely to exacerbate the shift in welfare spending towards elderly people.”

http://www.theguardian.com/politics/2015/nov/09/george-osborne-skews-spending-towards-health-and-elderly-people

The end of social housing and the welfare state?

” … The housing and planning bill, now in the Commons, is designed to finish off social renting. It carries out the manifesto pledge of a right to buy housing association properties at heavy discounts. Local authorities have to sell their most valuable homes to pay towards that discount – so two social homes are lost for every one sold.

Council and housing association rents are cut by 1%, which sounds good but the Institute for Fiscal Studies says it helps very few of the 3.9 million social tenants: it just comes off their housing benefit. But it’s a bonus for the Treasury, taking £1.7bn off the housing benefit bill by leaving a disastrous hole in council and housing-association finances: they will build 14,000 fewer homes to rent. Borrowing to build will be harder, as this loss of rent caused Moody’s to downgrade housing associations’ credit ratings. The FT reports that, as a result of the rent cut, council plans to build 5,448 homes were cancelled instantly.

…For every nine social homes sold off, only one has been built. “Get Britain building,” Cameron said, but few expect those million homes he promised. Housing is at the root of all good social policy. Good jobs, better education, decent communities, children at home in secure families – all depend on somewhere permanent and decent to live. Macmillan knew it, yet Cameron has abandoned it.”

http://www.theguardian.com/commentisfree/2015/nov/10/housing-target-david-cameron-dismantling-welfare-state

House of Lords Housing Inquiry: written submissions sought

House of Lords

Economics of the United Kingdom housing market inquiry

The Economic Affairs Committee of the House of Lords, chaired by Lord Hollick, is conducting an inquiry into The Economics of the United Kingdom Housing Market. This inquiry will consider:

 the supply and affordability of housing for private buyers, for the private rental sector and for the social housing market across the UK;

 the effectiveness of Government policies on the demand for and supply of reasonably priced housing across the UK.

The Committee invites interested individuals and organisations to submit evidence to this inquiry.

Written evidence is sought by 17 December 2015.

Scope of the inquiry:

The Committee is to investigate the economics of the UK housing market. Buying a house is becoming increasingly unaffordable for first time buyers. The cost of private rented accommodation is rising and there is a lack of affordable social housing. This Inquiry will consider the economic factors that influence the demand for and availability of reasonably priced housing to buy and to rent. This is a complex topic and the inquiry will particularly focus on the effectiveness of government economic measures designed to improve housing affordability.

Its scope, remit and how to submit evidence is here:

Click to access Housing-Call-for-evidence-FINAL.pdf

COVOP summary: The state of planning today

Planning Situation: Background

There is very strong evidence to show that across England the Planning system is badly broken and that communities are being left to pick up the mess. The NPPF has resulted in planning-through-appeal and, in areas where Local Plans can’t get through the inspection process, the developers are having a field day. The common practice is to pick off sites that haven’t been identified for strategic development and take local authority decisions through appeal. The sites that have been identified for strategic development can then be picked off at leisure later on. Developers are building up magnificent stockpiles of permissions and their profits have shot up since the inception of the NPPF.

Permissions can last for a minimum of three years and on bigger sites this can be extended. All the developer has to do to secure the permission is to put a spade in the ground. He or she doesn’t have to build-out. Build-out rates are appallingly slow. In the midst of massive claims about housing need, the market, other than in London and the south east, is sluggish. Here in Cheshire East we have permissions coming out of our ears, but the builders churn out approximately 30 houses per annum, even on big sites. This is big business and neither councils nor communities can afford the level of legal expertise that is required to negotiate their way through the minefield. The cards are stacked against them, anyway. The NPPF is deliberately written to ensure that housing gets built, and sustainability, which is supposed to prevent adverse development is neither properly defined nor properly applied.

Developers have their own standard housing designs and they have finely tuned their businesses so that they build to those stock patterns and only build sufficient quantities to keep demand and prices high. That is why affordable housing is not built in the quantities that are needed and why the big builders won’t build things like bungalows. Land-owners have got in on the act and now only want to sell their land for housing because this brings in a bigger return than infrastructure or commerce.

Local authorities are being kicked by both government and their communities. In fact, their hands are tied because getting a local plan through an inspection is difficult and because the law has been constructed in such a way that opposition is neutered. The so-called objectively-assessed housing need is always based on figures that assume enormous levels of growth for the whole of the twenty-year plan period. Add in the Liverpool and Sedgefield decisions, which are ways of providing an extra provision to supplement the five year housing supply, and areas are stuck with unrealistic housing expectations. Which the builders argue for, but then don’t bother to supply.

The NPPF was compiled by four people, three of whom had interests in the construction industry and one of whom was an officer in the RSPB. It is considered by most communities to be a developers’ charter. The lead figure in pushing for this was a woman from the Treasury called Kate Barker who is now a director of Taylor Wimpey. I once carried out an assessment of a group of members of the House of Lords who were in a debate on housing and who were all demanding further deregulation of the planning regime. They all had some kind of personal pecuniary interest in the industry.

All this might be forgivable if housing for those who need it was being supplied. It is not. Generally speaking, the housing that is being built is often in the luxury end of the market and such unnecessary provision as second homes. There are now more private landlords than in the public or housing association sector. Evidence shows that the latter are not going to be building much more property for several years because they are having to make up the shortfall, in some instances by making staff redundant, as a result of the current changes to the welfare regime. The right-to-buy is also seen by them as a threat and makes them reluctant to invest in more property.

There are some useful studies about all these things, in addition to the evidence presented by communities to the Review that was held by the Committee for Communities and Local Development last year. They made recommendations that might have been really helpful and the Government chose to ignore these. The Secretaries of State and the Planning Ministers seem to be in total denial about the failure of their policy. Across England there are action groups in communities that feel bruised and damaged by the fall-out from all this. Because the emphasis has been on a kind of scorched-earth, build-at-any-cost, programme the basic infrastructure provision that underpins all development is being eroded or omitted. The gladiatorial contests in major planning appeals now include spirited attempts to get away with not making any contributions to community infrastructure. The government is complicit in this. All political parties, and many charities make statements about the quantity of housing need but they rarely present the evidence that supports these claims.

At local level, we know that our local association has no method of working out housing need because they allow multiple registration (the same person can apply for as many different kinds of accommodation as they want. Every time they apply, this counts as housing need. It doesn’t matter whether they are already housed. A member of their household can also register in the same way).

​(Jenny Unsworth, CoVoP and Protect Congleton)

Property fracking!

“It is, essentially, nothing more than a compacted collection of mud, rocks and debris from down the ages.

But in a further sign of the madness of the febrile London property market, a prospective developer has just paid £150,000 – simply for the ground beneath an existing property.

And there is speculation that with the demand on both space and housing in the capital showing no signs of easing, buying the ground beneath other buildings in order to build down could just become a trend – lending an entirely new meaning to the expression ‘sitting on a gold mine’.

The 1,975 sq ft plot of ground beneath Queen Court, a 1930s apartment block in Queen Square, Bloomsbury, central London, was bought by an unnamed woman for £30,000 more than the reserve price.”

http://www.telegraph.co.uk/finance/property/news/11980605/Mystery-developer-buys-the-ground-beneath-London-apartment-block-for-150000.html

What EDDC giveth, EDDC taketh away …

… East Devon District Council (EDDC) had called on ministers to reconsider a one per cent rent reduction for council and social tenants.

The authority says the change will leave it £7.9million out of pocket after four years …

http://www.midweekherald.co.uk/news/rent_reduction_plans_will_have_a_devastating_impact_says_eddc_leader_1_4300546

SOUNDS GOOD DOESN’T IT? BUT HOLD ON …

“… East Devon is planning to raise rents for new tenants from the end of November, according to a proposal going to the Housing Review Board on 5th November. Rents will be raised to the ‘target/formula rent’ in one go, the average difference being £2.21 per week although obviously in many cases it will be more.

Giving with one hand, taking with the other

The reason for this change is given as: ‘The Government announced in the summer budget that from April 2016, social housing rents will reduce by 1% each year for a period of four years. By moving rents at tenancy changes to formula/target levels for new tenants, some of the loss of rental income will be offset and lessen the severity of the 1%, 4 year rent reduction.’

In other words, what tenants gained on the one hand, EDDC (which is losing income through the reductions) will take back with the other. Tenants will pay to keep services funded. …”

http://seatonmatters.org/2015/11/02/rent-rises-for-new-east-devon-tenants/

Luxury is always available …

Several newspapers report that the UK’s largest care home provider (Four Seasons) is in financial difficulty both from “financial engineering” and the inability of social services fees to keep up with costs. They will now sell off some homes and cut maintenance and refurbishment costs in others.

Luxury accommodation will, of course, always be available to those who can afford it. But what of the rest of us?

Is it morally defensible for a council to sell its assets so that luxury accommodation is available for the elderly, when others cannot afford it and when local youngsters are priced out of the housing market? Is it morally defensible to spend the money gained from such asset sales to build itself new offices. If our elderly have to put up with less well maintained accommodation, our youngsters being unable to own or rent homes because of high prices, why do our officers and councillors deserve it? “Making do and mending” is what the rest of us without extra resources are having to do.

Yet another example of “Local Authority plc” – running councils as businesses for profit rather than for those paying council tax. Only in this case ” shareholders” are officers and councillors, not us.

If our council tax is not paying for the services WE need – should we be paying it?

Planning permission does not equal houses built

15,000 houses given planning permission in Ebbsfleet – 350 so far built. Incredible – this is commuter belt for London and on the Eurostar route – so houses should sell like hot cakes. But developers don’t want to build the infrastructure!

“Although Ebbsfleet was earmarked for major development back in 2003, and permission has been granted for 15,000 housing units, only 350 have so far been built. This is credited to a reluctance on the part of private firms to fork out for infrastructure, rather than a lack of demand. And so, accordingly, £200m of public money is being used to jumpstart the process.”

http://gu.com/p/4ev5q

Bye bye countryside, bye bye localism, hello urban sprawl

“Tens of thousands of new homes in greenfield areas in England will be given automatic planning permission amid fears that communities will have inappropriate developments forced on them.

Ministers have quietly given developers the right to be granted “planning in principle” in areas that are earmarked for new housing schemes.

Rural campaigners said the new powers will restrict the rights of council planning officers to ensure that the design, density, size and location of homes is in keeping with local areas.

Shaun Spiers, chief executive of the Campaign to protect Rural England, said: ““The country needs more house building, but the way to achieve this is through well-planned developments that win public consent. Imposing development without local democratic oversight is a recipe for discord. …”

http://www.telegraph.co.uk/news/earth/greenpolitics/planning/11968830/Tens-of-thousands-of-new-homes-in-greenfield-areas-to-get-automatic-planning-permission.html