Budget 2014: Social Housing Needs a Kick In The Privates

Mar 16, 2014

Recent housing construction figures are looking brighter. Kris Hopkins, the Housing Minister, is chipper that more homes are being started and that affordable units are too.

Of course, the social sector and properties built by private developers are locked together. Around 50% of social housing built is linked to overall residential construction by way of S106 agreements. Which is fine until there’s a downturn in the market and less bricks are laid.

Which is why government, local authorities and housing associations can no longer rely on the convenience of house builders propping up their responsibility.

I’m surprised that given the brains employed and elected in the public sector that a new approach has not been found. Maybe that’s political. Ideological even. But I doubt it, I mean social housing is a big win for whichever party can solve the current crisis where waiting lists for affordable rent grow and grow and where there is a massive absence of shared ownership opportunities across the UK, particularly in London where ‘affordable’ housing is not just the focus of those on low incomes. A 50% shared ownership flat in a decent borough still requires an income of some £40k to secure a mortgage on it. At least.

My background is property. Since I was a nipper, given that I am the son of an estate agent’s son (Albert Quirk, my grandfather, founded our original family business in the 1950’s). And I’m a local councillor in my home town of Brentwood too with prior responsibility for housing, planning and asset portfolios. So I might come at this issue from a different angle to most politicos or their SpAds.

I get excited at the prospect of solving public sector issues with a private sector mentality. It worked well when I began to transform Brentwood’s assets into income by utilising an entrepreneurial approach to the swathes of wasted land and buildings laying around the town. I moved to save our beloved Town Hall from sale or demolition in 2011 by proposing a pioneering idea to keep the facade, retain the council’s home within it but whilst refurbishing the spare 30,000 square feet for private office space to create a revenue stream and a mitigation of running costs whilst also allocating a slab of space for community use.

A similar philosophy must be applied to social housing if we are not to end up with families on the streets when councils run out of dwellings (they have already) and money for short term B&B accommodation (that’s happening right now).

This Wednesday would be an apt time for our Chancellor to develop this. So here’s my idea…

Wealth in the UK is growing. Forget your political opinion for a second and accept that there are some very rich individuals and corporations here. The London housing market overload is testimony to that in terms of non-domestic buyers alone.

This wealth can be used to help those at the bottom of the pile.

Now, I’m no communist. Far from it. In fact I’m rather a massive capitalist however a capitalistic mindset does not have to preclude a social conscience.

Which is why I suggest that we encourage high net worth individuals and businesses of a profitable disposition to invest in affordable home building.

And here’s how we do it….

Allow tax breaks on profits that are then channelled into building social housing schemes that provide affordable rent, shared ownership and build to rent dwellings. That’s it.

I’ll leave the detail of the numbers and the extent of the breaks to others to crunch however it strikes me that if you incentivise the Bransons, the Greens, the Mittals and the Sugars of this world to pay less tax in return for ring fencing cash in low end housing, with provisions that dictate a minimum lock in period, that we not only end up with more affordable homes but we stop the very tax avoidance that SOME individuals and corporations are responsible for.

I reckon a 5 yr lifespan for each scheme which would then be ‘traded’ to the next HNWI or company.

Starbucks and Amazon building ‘council’ houses? Why the hell not?

Come on George. This is a social win and a political one too. A policy that gets you votes at both ends of the social ladder? Who would have thought THAT was possible…..?


Russell Quirk is Founder and CEO of Emoov.co.uk, consumer friendly estate agents.