Madhu Satsangi

Help with Housing Costs

This chapter provides an introduction to the Housing Benefit system (HB). Housing Benefit is extremely important for Britain’s housing finance system, as it is the main person-oriented housing subsidy in the social and private rented sectors. The chapter n n ndiscusses the development of the system and the way it operates; n n nlooks at the coherence, effectiveness and fairness of HB; n n nexamines ways in which the system’s faults might be remedied; n n nassesses the 1996 reforms to HB and income support for mortgage interest.

Financing Housing Associations

This chapter provides a review of the means by which the voluntary housing sector in Britain is financed. The sector — of housing associations and co-operatives — plays a vital role in housing policy and in the housing finance system. The chapter n n nexplains the importance of voluntary provision to the British housing system; n n nexamines the allocation of public moneys to the voluntary sector; n n nexamines the main changes that have occurred to capital and revenue funding for housing associations and co-operatives; n n nlooks at how the landlord organisations in the sector set their rents.

The Economics of Housing Markets

This chapter introduces the economics of the housing market. It is important to look at the underlying principles of the housing market, because economic analysis can inform important housing policy debates, not least about how markets may respond to new policy initiatives. For instance, the financial deregulation of mortgage markets has transformed the way economists, government and policy analysts think about the importance of housing in the macroeconomy. Similarly, changes in taxation, in incomes and in economic growth, and the introduction of new subsidies, all influence the housing market through the interaction of demand and supply.

The Future of Housing Finance

This chapter concludes the book with an overview of the current pressures on the housing finance system in Britain today. It considers possible directions for reform, as well as emerging challenges that a new or reformed system might have to meet in the future. The focus of the chapter is on the nature of how housing finance affects the housing system, rather than on the detail of the financial mechanisms. The chapter: n n nreviews recent trends in the housing system and the current context for financial decisions in relation to housing; n n nevaluates the case for tenure-neutral reforms; n n nconsiders the demands that are likely to be placed on the housing finance system in the foreseeable future.

Introducing Housing Finance

This book analyses the contemporary housing finance system in the UK. Housing finance can seem complicated and difficult — the purpose of this chapter is to explain both why it is somewhat complex and also why it is worth persevering to understand the system. This chapter considers: n n nWhy does the housing finance system exist? n n nWhy is housing finance important? n n nWhat are the main institutions involved in operating the system? n n nWhat are the main problems for housing finance policy in the UK?

Key Issues in British Housing Finance

The preceding chapters have defined and discussed the main structural elements of Britain’s housing finance system. As well as conveying how these interact, the aim has been to show how the system has evolved, and to chart policy impacts, particularly over the last two decades. But what major issues are challenging the system now? And what impact might they have over the next two decades? In this chapter, four themes are considered: n n nthe refinancing of council housing; n n nthe pricing of social housing; n n nthe financial aspects of housing’s role in urban regeneration; n n nthe financing of housing for community care policy.

Private Rented Housing

Sixty years ago, private renting was numerically the most popular tenure in Britain. Today, it is a truly residual part of the housing system. The private rented sector (PRS) does, however, seem to be experiencing a small reversal of fortune (see Figure 7.1 and below).

Mortgage Finance, Housing and the Economy

Chapter 2 looked at the underlying principles of the economics of the housing market. It indicated that there has been considerable instability in the UK owner-occupied market. In this chapter, we explore two dimensions of this instability. First, we look at the market for mortgage finance, which underwent revolutionary deregulation in the 1980s. This was an important contributory to the 1980s boom and bust. The second, related theme concerns the relationship between owner-occupied housing and the UK economy. Chapter 2 indicated that rising incomes and demographic change affect the housing market. In the 1980s and 1990s, a number of links between housing and the economy became increasingly apparent: n n nHousing market wealth affects total spending and inflation. n n nRising housing prices affect labour market mobility and wage inflation. n n nFalling prices and sales deepen and lengthen recession.

Financing Local Authority Housing

Although the local authority sector has been falling in size over the last twenty years, it remains the most significant provider of social rented housing. Its financial arrangements are still at the heart of the provision of rented homes at below market prices.