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Housing reform at risk amid Conservative resignation turmoil

The Conservatives have made many promises on housing, but the party's in-fighting threatens all of it
Housing reform at risk amid Conservative resignation turmoil
  • Housing sector 'plunged into uncertainty' after arrival of fifth housing secretary in four years
  • Fears that some reforms could be scrapped, while industry steps up lobbying efforts

You would be forgiven for not noticing Stuart Andrew’s resignation last week. Amid the departures of over 60 members of Boris Johnson’s government, the former housing minister’s exit went by almost unnoticed. Yet his resignation is a sign of a much larger problem that threatens housing and planning policy.

Alongside Andrew’s departure last Wednesday came the departure of two other housing department ministers. Then, at around 9pm that evening, the secretary of state for levelling up, housing and communities Michael Gove was sacked and branded a “snake” by a Downing Street source. 

Greg Clark’s appointment as Gove’s successor makes him the fifth housing secretary since 2018, while Andrew’s departure means his replacement Marcus Jones is 12th housing minister since 2010. Andrew, who was only given the job in February this year, even used his resignation letter to apologise to a sector “that have to get to know yet another housing minister”.

None of this bodes well for the myriad of policies and issues which the housing department is supposed to be dealing with right now. Crucial pieces of legislation for housebuilders, major landlords, tenants and others currently in play include the Building Safety Act, the Levelling-up and Regeneration Bill, the Renters Reform Bill, while social housing reform, promised leasehold reform and the ongoing affordability issues will likely end up taking a backseat as the government deals with its own internal crisis.

Last Thursday, the day after the torrent of ministerial resignations and the day the prime minister himself finally agreed to stand down, a key debate in the House of Commons on the levelling up bill had to be postponed because there were not enough ministerial staff from the housing department available.

The hearing would have discussed evidence submitted from Land Securities (LAND), a community action campaign and two local authorities about the bill and the wider levelling-up agenda, but all of that has been parked for now. Nicola Gooch, planning partner at Irwin Mitchell, said further delays from the department were a “certainty”.

“They have to get the department restaffed and get those people up to speed,” she added. “And there’s going to be a reluctance to do anything new because what we have right now is a caretaker government.”

Gooch explained that the slowdown in debates and committees would be particularly problematic for the levelling-up bill, which was written as a framework with the intention that it would be reworked via committees such as the one which was postponed last week.

Without those committees, Liam Spender, senior associate at Velitor Law, said there was the possibility that the bill was “lost altogether as [the government] runs out of Parliamentary time”.

Robert Bruce, planning partner at law firm Freeths, was more optimistic. “I doubt the Conservatives will want an embarrassment with a significant u-turn on legislation progressing through parliament,” he said. 

Similar delays are also likely to slow the passing of other promised reforms, yet for the Building Safety Act there is a second potential issue: a change of direction. At present, the act, which was passed in an attempt to right the wrongs of the Grenfell Tower disaster, sets into law the legal responsibilities of freeholders – as the ultimate owners of blocks of flats – to bear the brunt of fire safety costs in most cases.

By and large, this will mean housebuilders and residential developers such as Berkeley (BKG), Crest Nicholson (CRST) and Grainger (GRI) will foot the bill rather than tenants or flat owners. However, some of the finer details about how this payment will work in practice are due to be fleshed out in secondary legislation, and Spender thinks that with Clark at the helm rather than Gove – a man who he said did a good job of “banging heads together” and siding with leaseholders on this issue – the resulting legal framework could wind up tilted much more in the favour of freeholders.

“If you have a minister who is not fully in charge, it becomes easier for them to cave in to lobbying,” he said.

 

Invested interests

Indeed, this lobbying has already begun.

On Sunday, the Daily Mail published a letter to Clark from the Home Builders Federation (HBF), which counts the likes of Persimmon (PSN) among its members, arguing that the £3bn levy which the housing department is asking the industry to pay in order to cover cladding remediation could threaten the delivery of affordable housing.

A source at the HBF tells Investors' Chronicle the lobby group is "setting out what we think should be [Clark's] priorities” and that because of Gove the relationship between the housing department and the housebuilding industry was “at an all-time low”.

Meanwhile, the British Property Federation, which represents commercial developers such as British Land (BLND), has released a statement calling for “a clear vision and decisive political leadership to [...] create the partnership between public and private sectors that can drive forward the critical agendas of delivering more homes and the decarbonisation of the built environment”.

For the other proposed reforms which are not as far along in the process as the Building Safety Act or the Levelling-Up Bill, there is the real possibility that they may be canned altogether. Clive Betts, chair of the levelling up, housing and communities committee, said that much of the social housing reform which had been trundling through various committees over the last few months was at risk.

“That is a big issue where there is lots of potential for change,” he said. “There isn’t a clear plan on how to reform social (and housing) care and, more importantly, there isn’t any funding to do it.”

For similar reasons, Spender said that the second stage of proposed leasehold reform, which pledged to make it easier for leaseholders to buy the freeholds to their properties, may now fall by the wayside. As for the Renters Reform Bill, which is currently just a white paper, Betts said that this is unlikely to be scrapped considering the popularity of its policies – such as the abolition of ‘no-fault’ evictions – although Spender said that it still needs a champion to “take a grip of the officials in that department and turn it into a bill”.

For Spender, predicting the future machinations of housing policy is challenging because the recent staff turnover has left the department directionless. “We have been plunged back into uncertainty,” he said. “We thought we saw an imperfect way forward but now we’re surrounded by uncertainty again.”

Yet, not everyone shares his pessimism. Gooch from Irwin Mitchell has previously talked housing policy with Clark and said he could be a force for good in the department. 

Indeed, the housing department itself is at least outwardly confident that it will be business as usual. In a statement responding to concerns about its high staff turnover, a spokesperson said: “The secretary of state is committed to the clear vision and direction that has been set for the department. This includes reforming the private rented sector, improving social housing conditions, protecting leaseholders from unfair building safety bills and levelling up communities across the United Kingdom.”

Of course, all of that depends on how much time he is given. The temptation for whoever wins the Conservative leadership contest and becomes the next prime minister will be to reshuffle the department all over again. All that can be hoped is that whatever team they pick will stay in place for longer than their predecessors.