1. Fuelling Pauperism – How the Coalition Government’s lavish spending on housing benefit and helping private landlords is making housing less affordable for us all. Len Gibbs

2. The basic argument House prices and house price inflation are central to the UK’s economic model….  By enabling spending through borrowing and equity release  By being the basis for credit creation  By creating expectations of wealth without doing anything  By distorting investment patterns – away from productive capacity into consumption All recent governments have done their utmost to protect inflated house prices….. No matter what the consequences for inequality

3. How does this work? Tax advantages for existing owner occupiers Advantaged position of private landlords –Unregulated Interest only mortgages – 85% of advances –Lenders prefer private landlords to first time buyers Tax deductions and ways of escaping capital gains tax –Capital support from the government –Demand creation through inward migration (most cannot get mortgages), huge expansion of student numbers and reductions in social housing –Housing benefit fuels the market –Deregulation of tenancy conditions Help To Buy, low interest rates and QE keep prices up Sale of social stock and structures of housing finance financialise housing further

4. The results 1.Huge transfer of wealth over to the wealthy and financial sectors 2.Much higher dependency on housing benefit to make the market work 3.Huge public expenditure burdens – supporting banks, giving tax breaks and paying benefits 4.Government has taken on unprecedented housing market risks 5.Neighbourhoods are being taken over by speculators

5. Consequences Tenure change –Owner occupation down from a peak of 71% to 63% now –Private rented sector has risen from 9% to 19% –The proportion of private renting is rising fastest in the poorest places –Private rented sector now 4.8m from 2.4m in 2001 –2m private rented homes are foreign owned

6. Consequences continued…. Costs to the government –Housing benefit bill for private tenants has risen from £2.85bn in 2001 to £9.22bn by 2012 –I million working tenants need housing benefit to help pay their rent (439,000 - 2008) –HMRC estimate £500m per year in tax avoidance –£1bn Build to Rent for more private housing, £3.5bn in loan guarantees

7. Warning signals A private renting bubble? –80% of private tenants in Blackpool on HB –In Manchester 1 in 3 households are on HB –In Liverpool average rents down 27% in 3 years –Most private rent rises are not keeping up with inflation –72% of all residential sales in 2014 went to Buy To Let landlords (CML) –Signs of oversupply – static rents, To Let signs, rents clustering around the local housing allowance figure

8. What is happening to welfare? 27/1/15 – Conservatives want to reduce to £23k.

9. Vulnerable local authorities Primary factor – percentage of households on housing benefit – 30% plus Economic capacity – jobs for benefit leavers House price growth – affects rental yields Growth in the numbers of households Yield rates for private renting

10. Potential effects on the housing market

11. Neighbourhood vulnerability Economic activity rate Proportion of privately rented stock Relative house prices Pattern of house price growth or reductions Estimated private sector yields

12. Neighbourhood effects

13. Welfare reform impacts on people

14. Potential impacts on landlords

15. Some icebergs ahead…

16. The 10 most vulnerable local authorities? 5 in the North West 4 in the North East 1 in the East Midlands

17. The research agenda Selection of fieldwork areas Fieldwork neighbourhoods Quantitative modelling Qualitative research It’s the day job too!!