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Taking the Long View: the WHQ 100 lecture

Wales may be different but we are still exposed to market trends in a system that is now at breaking point. That was the message from Dr Peter Williams in The Welsh Housing Quarterly 25th Anniversary lecture.

CUCSDpOW4AAoDExPeter (pictured right) helped to found WHQ in 1990 when he was at Cardiff University so the Glamorgan Building was an appropriate venue for his lecture, titled Taking The Long View 1990-2040; Rebalancing The State And The Market? Chaired by Antonia Forte, chair of WHQ’s advisory board, the event was sponsored by the Principality Building Society.

Now a departmental fellow in the Centre for Housing and Planning Research at the University of Cambridge, he began by setting out the fundamental changes seen in housing in recent years: the rise and fall of home ownership; fall and rise of the private rented sector; rise and fall of council housing; and the rise (and possibly the fall?) of housing associations.

The big question he sought to answer is whether we are seeing merely cyclical changes in the market or more fundamental structural change. ‘I personally think it’s changing fundamentally in quite profound ways,’ he said. Rather than taking a counter-cyclical approach to supply, the UK government has adopted a pro-cyclical approach to demand and is supporting it through billions of pounds worth of financial instruments.

Meanwhile structural changes such as lower numbers of transactions, new mortgage market rules, a larger private rented sector, consolidation among lenders and housebuilders, an insecure labour market all point to ‘a tighter, narrower market’. Housing policy and provision has ebbed and flowed between the state and the market at UK level and in England it has swung towards the market through numerous changes but including the use of loans and guarantees (rather than grants), equity shares, private finance, affordable rents and Pay to Stay.

Looking forward to 2040, Peter sees house prices continuing to rise, with a rising population ‘locked in and not going to go away’, especially in England.

The rented sector will continue to expand to accommodate 30-40% of households while home ownership will shrink to around 60%, a far cry from the 80% target set by the Welsh Office in the early days of WHQ. By 2040, he speculated that the housing association sector will become ever more diverse, with some parts of it little different than the conventional PRS sector. This is turn might suggest any funding would be less by sector (public or private) and more by defined client group and outcome.

He also suggested we might see the rise of the ‘agenda about which we dare not speak’: the possibility of a fair property tax which might begin to help address the damaging volatility which is remains a central weakness of the current market.

However, in the meantime the impact on the rest of society and the economy will become even more evident. ‘We don’t see it because most of us are reasonably well housed,’ he said. ‘Lots of people aren’t, they are coping by sharing, living with their parents and commuting long distances to find affordable housing. They are not necessarily on the streets. However, the costs of this failure to build a sustainable housing system are felt in the labour market, household and family formation as well as in health, education and even crime.’

He concluded with a call for action that was very much about 2015:

‘2040 may seem remote but we need to start now because housing is a long-term issue and will require that kind of time scale to sort out. In all of this Wales is not an island and though some of the worst features of the English housing situation are less evident in Wales the fact is that without action on both a Welsh and a UK front we will see continued deterioration with consequences for individuals, families, communities and local economies. Politicians and housing organisations need to be brave – we have 25 years to sort this out by 2040 when of course we have the 50th birthday WHQ lecture.’

Many thanks to Peter for a great lecture, to the School of Planning and Geography at Cardiff University for hosting the event and to Principality Building Society for its generous sponsorship. Look out for video of the lecture online soon and an article in the January issue of WHQ.

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