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The future of social housing in Europe European colloquium 22nd-23rd november 2007 Paris

The future of social housing in Europe European colloquium 22nd-23rd november 2007 Paris. Social housing and the market. Social Housing Privatisation in England: Differential Impact and Questions about Social Mix Alan Murie Centre for Urban and Regional Studies University of Birmingham.

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The future of social housing in Europe European colloquium 22nd-23rd november 2007 Paris

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  1. The future of social housing in EuropeEuropean colloquium22nd-23rd november 2007Paris

  2. Social housing and the market Social Housing Privatisation in England: Differential Impact and Questions about Social Mix Alan Murie Centre for Urban and Regional Studies University of Birmingham

  3. Structure of Presentation Sales of council dwellings to sitting tenants • Social Housing in England • Privatisations • The Right to buy 1980 • Policies • Progress • Impacts • Neighbourhood effects, social mix and RTB • Conclusion

  4. Perspective:Social Housing in Europe Social Housing as % of housing stock 1980 • England 31% • Netherlands 34% • In England social renting housed a large section of the population not just excluded households • Already a trend towards a narrower social base as private renting declined and home ownership expanded

  5. Perspective:Social Housing in England Before the Right to Buy • Uneven geographical pattern of council housing development • Differentiation in council housing: a hierarchy of demand/ internal ‘market’ • Discretionary sales • Few between the wars; • few in 1950s; • increasing 1960s and 70s

  6. Privatisations • Financial and other encouragement of home ownership • Making social renting less attractive: • Rising rents • Restricted New Build • The Right to Buy: Transfers to Home Ownership • Stock Transfers from municipal Landlords to Housing Associations

  7. Privatisations: Sales of Social Rented Dwellings • The Right to Buy Policy since 1980 • How it has impacted locally (Birmingham) • Over time • Across different neighbourhoods • Consequences for social mix

  8. THE RIGHT TO BUY: OBJECTIVES WERE NOT ABOUT SOCIAL MIX The Prime Minister May 1979 “Thousands of people in council houses and new towns came out to support us for the first time because they wanted a chance to buy their own homes. … …. a giant stride towards …a … property owning democracy. It will … give to more of our people that prospect of handing something on to their children and grandchildren which owner-occupation provides.”

  9. The Right to Buy • A Right replacing discretionary power for • Sitting Tenants to buy the house they occupy at • Discounts up to 50% market value and • be able to sell on the market after 5 years

  10. After 1980 even higher discounts (Up to 60% for houses and 70% for flats) increased complexity After 1998 new maximum discounts and regional variation DEVELOPMENT OF RIGHT TO BUY

  11. Trends: Cumulative proportion of stock sold by Region: England 1980-2001 EAST E MIDS S E S W N E W MIDS ENGLAND LONDON N W Y & H

  12. RTB Sales in English Regions: 1980-2005

  13. Proportion of social housing stock sold to sitting tenants: 1980-2001

  14. Implications of Regional/Local Evidence • The same policy varies in impact over time and place • The national economy • Policy Changes • The Regional Economy (incomes and employment) • The Local Housing Market

  15. Birmingham Largest local authority and landlord in England (144,000 council built dwellings) • 13,510 sold before 1979/80; • 41,903 sales1979/80 to 2005/6 Total 55,413 sales (38%) – of which 5,839 flats

  16. TRENDS: BIRMINGHAM

  17. Sales of council houses and flats in Birmingham 1998/99 to 2005/6

  18. Valid Sales before Right to Buy (as % valid properties)

  19. Smoothed average over 500m 100% 0% 1980 Proportion of council stock sold

  20. Smoothed average over 500m 100% 0% 1985 Proportion of council stock sold

  21. Smoothed average over 500m 100% 0% 1990 Proportion of council stock sold

  22. Smoothed average over 500m 100% 0% 1995 Proportion of council stock sold

  23. Smoothed average over 500m 100% 0% 2000 Proportion of council stock sold

  24. Ratio of Sold properties to remaining Council managed Stock (2001)

  25. What has been Sold and Who has Bought? • Middle aged and middle income • Better properties • Longer tenancies • Purchasers Becoming younger

  26. TRENDS:DISCOUNTS • Rising with changes in legislation • Falling subsequently with younger purchasers and lower maximum discounts

  27. Immediate Impact of Right to buy on mix? At Tenure level – within social renting? Middle (higher) income and middle aged move out Contributes to established trend to residualisation of council/social rented housing At Neighbourhood level? No immediate change Purchasers want to stay Repayment of discount if move within 5 years Some potential leavers stay because they have bought

  28. What happens to social mix when properties are resold on the market? Varies according to market circumstances and property: • In some cases very similar households access through the market as would have in the social rented sector • In other cases ‘gentrification’

  29. What happens to social mix when properties are resold on the market? All Areas • Greater turnover and more young and employed households than among tenants generally High price markets • Gentrification (young professionals with 2 earners) of best estates and in London/South Low demand markets • Less appeal to gentrifiers • Manual workers and self employed Families Flats and leaseholds • Some ‘unsaleable’, • Some second homes

  30. Initial Conclusions • Variation in sales at neighbourhood level reflects popularity of properties/ preferences of tenants • High sales in best areas where more affluent, long standing tenants • Further residualises the least popular estates • Less clear what happens on resale but least demand (least affluent purchasers) in least attractive estates • Pattern responds to demand: a market pattern

  31. How have individual estates changed ? Birmingham Analysis of 12 estates – different locations and rates of sale Data 1981-2001 • RTB sales • Census Census tracts that relate to estate boundaries (some already high sales by 1981)

  32. Selected estates in Birmingham

  33. How have individual estates changed ? • Assessing the Positive view • More tenure mix • More Social Mix • More Ethnic Mix • Where do privatised properties fit in the market?

  34. How have individual estates changed ? • More tenure mix? • Privatisation inserts private ownership into social rented areas • Initial sales to sitting tenants generates growth of home ownership • in subsequent sales some properties become private rented

  35. Birmingham Estate changes 1981-2001:Tenure

  36. Leakage to private renting • Initial sales to sitting tenants generates growth of home ownership • Census (and other) evidence: in subsequent sales some properties become private rented • Growth of home ownership not sustained • Fragmented rental ownership and rights of tenants will affect dynamics of estate

  37. Leakage to private renting

  38. Leakage to private renting • In Ladywood and Sparkbrook leakage very high – over 40% but all of the others except Falcon Lodge exceed 20%. • Pattern not linked to initial tenure structure or rate of privatisation but to other attributes/market position?

  39. How have individual estates changed ? • More social mix?

  40. Household Type and Age? Estates were not uniform in 1981 Some had more social mix than others Property size, type and turnover Life cycle of estate Is there more social mix following privatisation?

  41. Household Type and Age? More single persons More single parents Fewer families Fewer childless couples Trend similar to city except single parents and younger.. Variation between estates A role earlier in housing career Is there more social mix following privatisation?

  42. Ethnicity? Trend on estates as a whole similar to city Polarised pattern between estates Related to existing BME presence (market) Is there more ethnic mix following privatisation?

  43. Non-white population has grown most in estates which already had the largest non-white population This pattern most apparent in private sector Social renting dampens trend? Growth in non-white population 1991-2001: Birmingham Estates

  44. In ‘Non-white’ areas social rented housing is more likely to be ‘white’ In ‘White’ estates social rent more likely to be ‘non-white’ but not Ladywood where social sector non-white skew except Pineapple, Perry Common where social sector white skew and Castle Vale where very little difference Social renting dampens trend?

  45. What happens to property values following privatisation? Same 12 estates in Birmingham Indicative data on council house sale prices and wider market

  46. Sale prices of Council properties 1998 2003 • Perry Common £20,552 £21,611 • Falcon Lodge £20,038 £28,270 • Hawkesley £18,912 £25,492 • Sparkbrook £18,499 £23,700 • Bournville £18,323 £31,680 • Kingstanding £18,298 £20,970 • Bartley Green £16,261 £23,130 • Spring Road £16,025 £28,502

  47. Increases in sale prices 1998-2003 partly relate to adjacent market

  48. Property Values in selected estates: Different rates of change

  49. Selected Estates: Market Environment • Estates are in both higher and lower priced segments of city • Increase in values partly reflects this • A varied pattern • Property type and size • Location • Popularity

  50. Conclusions: Neighbourhood effects of Privatisation • Privatisation will not immediately change the position of estates but will change the dynamics in the longer term when: • different property values emerge • exposed to processes that may speed differentiation and segregation • leakage to private renting • It will rarely revitalise the least attractive estates or increase diversity and will make the regeneration of these estates more difficult

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