David Baybut examines the impact of the 1919 Housing Act and how government subsidies helped finance the construction of 500,000 houses to change the face of social housing
THIS year marks the 100th anniversary of arguably the most significant statute in the field of housing law passing through parliament.
The Housing Act 1919, more commonly known as the Addison Act – after its author, the then health minister Dr Christopher Addison – established legal principles which, although they may be taken for granted now, were revolutionary at the time.
For further context, this Act was passed shortly after the first World War; a time that saw substantial numbers of British combatants returning home, leading to a greater need for affordable housing. For the first time, it was acknowledged that the Government should play a central role in providing satisfactory living conditions for all.
But where are we now, 100 years on? Social housing policy remains a national enigma and presents a problem to which there is no obvious answer.
But while challenges remain in the field of social housing, there is evidence to suggest that progress is being made, in the following ways:
Local government policies
Many cities could be used as an example, but Liverpool is an engaging one.
Liverpool has not built any form of social housing in 30 years. However, in May 2019, the city’s Mayor Joe Anderson confirmed that this will change, announcing a 150-home development in the Knotty Ash district.
This represents a significant change in policy. But what has prompted such a change? Anderson cited an agreement with the Government to write off £130 million of existing debt as a reason.
Anderson has also launched a new council-led housing company called Foundations, promising to create 10,000 new homes.
Liverpool is not an isolated example. London reports an increased amount of social housing being built and Leicester is also heavily investing. Meanwhile, the devolved-Scottish government remains on target to hit its own affordable housing targets by 2021.
Central government investment
In September 2018, then Prime Minister Theresa May announced £2 billion of funding for new social housing, with the stated aim of attempting to remove the “stigma” from it.
It is hoped that this investment will allow local authorities and housing associations to build schemes which otherwise may have been seen as too risky.
Announcing the investment, May expressed concerns that many in society and politics look down upon social housing and those who call it home.
This announcement was welcomed by David Orr, then chief executive of the National Housing Federation, stating that it would have a “huge impact”.
As with all policy proposals, the full impact will only become clear upon implementation and many harbour concerns that the upcoming change in Prime Minister may lead to a policy change.
Increase in Right to Buy
The right-to-buy scheme has been in place for many years, as part of the development of social housing policy.
Figures published in 2018 revealed that five times more homes are being sold under the scheme compared to 2012. This is attributed to a £3.5 million injection of money, allowing almost 60,000 tenants to buy their home at a significant discount.
Those in favour of such a policy will argue that an increase in former social housing tenants owning their own home demonstrates social mobility. The contrary view is that the increase in selling has exacerbated the social housing shortage.
This argument cannot be ignored and is a stark reminder that there are still plenty of improvements needed.
Extending Right to Buy
Despite some concerns regarding right-to-buy, there is little sign that it will slow down.
At present, to exercise the right-to-buy, prospective owners must be able to pay for 10% of the value of their home upfront. Plans unveiled in August 2018 propose that tenants may contribute 1% annually, to reach the 10% threshold gradually.
The Housing Secretary James Brokenshire claimed this will improve “fairness, quality and safety” for residents.
The 2018 Green Paper
Safety now seems to be at the heart of social housing policy following the 2017 Grenfell Tower fire, which claimed the lives of 72 people.
Although, many will rightfully argue that progress remains slow. Many tower blocks still, over two years on, have cladding similar to the highly combustible material used at Grenfell Tower, amid disputes as to who should pay for its removal and replacement.
A Green Paper was published in August 2018, in response to the fire. It has five key themes:
- To provide decent and safe homes
- To effectively resolve disputes between residents and landlords
- To ensure the registered providers of social housing are more accountable
- To address the stigma of social housing
- To boost the supply of social housing and to support home ownership
The Green Paper has been welcomed by some. Ed Fowkes, the development director of Prosperity Capital Partners, who described the Green Paper as “a welcome declaration of support for tenants and of the empowerment of local communities”.
The paper is not without its critics, with the charity Shelter saying that it is “full of warm words, but doesn’t commit a single extra penny towards building social homes that are desperately needed”.
While social housing remains a topical issue, it is difficult to deny that huge strides have been made in the 100 years since the introduction of the ground-breaking Addison Act.
There is little doubt that this area of policy will continue to evolve over the next 100 years as it has done for the previous 100, but it is difficult to predict what the future will hold for social housing and more importantly, its tenants.
David Baybut is head of real estate at Stephensons Solicitors LLP