"When the post-war welfare state was founded, Beveridge had a vision for housing. It was to be for all, regardless of assets, income or need. Housing was regarded as a public good, like health or education.
"What a radical thought that is, in these days of 90 per cent loan-to-value ratios. That dream fell by the wayside relatively soon in the life of the public services, but it lingered in the hearts of many.
"It is a scandal that housing associations are being forced to fund their public-spirited activities through market speculation. It is shocking that asset sales are used to subsidise the poor.
"This is not what the founders of the welfare state - or the benefactors of the earliest housing associations - had in mind. And if we are honest, it is not what most of those involved in the business of social housing believe either.
"There is a role for private finance, but that is not the same as asset-stripping. What attracts serious long-term investors is the stability, the reliability and above all the solidity of the asset base. Marketisation of the sector is an existential threat to those characteristics."
So far, NPT Homes has shown up well in Social Housing's tables, being well capitalised and not paying more than the average to its directors. However, the inheritor of Neath Port Talbot's housing stock (whose disposal was forced through by a Labour/Plaid Welsh Government and a Labour-controlled council, it should be remembered) needs continuous monitoring lest it slip into bad ways. There is a duty here for the council-appointed directors to the mutual's board, who must not treat their posts as merely honorific.
Private lettingLast Thursday, there was a Lords debate initiated by Labour's Baroness Rendell of Babergh on the subject of problems faced by families in the rented housing sector. The second speaker was Liberal Democrat Ros Scott (Baroness Scott of Needham Market) who revealed some significant figures garnered from the Treasury as part of her research. 1991 was the lowest point for the private rented sector, bearing out here impression then that private renting was predominantly a temporary expedient. Now, she went on: "The English Housing Survey, published last week, has shown that the private rented sector has just reached parity with social rented housing. Each has a 17% share. There are now 1.1 million families living in the private rented sector and, according to a Cambridge University study, the number of families with children in the sector has risen by 86% in the past five years."
For many families, she said, " it is not an option they would choose, but they take it because they have been priced out of owner-occupation and cannot get social rented accommodation.
"Affordability is a key issue. Tenants have to find a deposit, a month's rent in advance and fees for letting agents. It is bad enough if you are trying to do that every five years or so, but in a volatile market people are often having to do it every year. Rents are high relative to the incomes of people in the private rented sector. The English Housing Survey estimates that the cost of housing accounts for 19% of the weekly income of owner-occupiers and 43% of the income of those in the private rented sector. Those figures need to come with a little warning, because the figure for owner-occupation is averaged out and includes those who have small mortgages because they have owned for a long time. Nevertheless, the figures are stark. [...] we all know the horror stories about poor quality accommodation, failure to deal with even serious and life-threatening problems and rogue landlords in general. On top of this, the high turnover rate means that families have little sense of permanence,with all that that means for the education of their children and their general well-being. Concentrations in certain areas mean that there are localities where a significant proportion of residents have no real stake in their area.
"We make a big mistake if we think that the growth of the private rented sector is a blip caused by a temporary lack of social housing and the unavailability of mortgages. These problems are here to stay, and so is a more mobile population in an increasingly flexible job market. The Joseph Rowntree Foundation recently published a study about housing and young people which showed that by 2020, 1.5 million more young people will be going into the private rented sector, most with their own tenancy and the rest living with their parents, as we have heard. These young people will very soon become parents, so the number of families in private rented accommodation will also increase."
She asked: "What progress is being made to deal with the issue of empty homes, estimated last year at 720,000 across the country? What is the Government's policy towards conversion and change of use back to residential? High streets are shrinking, and this is not just a short-term problem caused by the recession. There is an underlying issue caused by the huge growth of online shopping. Areas where many shops are boarded up would probably benefit from a change of use."
Ros had sympathy with those individuals who were wary of investing in properties to let because the returns were only 3-4%, low considering the risks that were involved. (7% is the generally accepted target return.) "The Treasury needs to think about smarter incentives," she suggested. "Changes to stamp duty have been welcomed, but measures are needed to encourage new building in the sector. It can and should be made conditional. There are schemes in France and Germany which offer tax breaks, but only in exchange for longer, more stable tenancies."
She concluded: "The private rented sector has now become far too important to be left to chance, as successive Governments have done. I look forward to hearing from the Minister today but also to some action in future."
The ministerial response was inadequate. It seemed to me that her prepared speech did not take into account points raised during the debate and offered no solutions.