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
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
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
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
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
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
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.”
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
DEVELOPMENT OF RIGHT TO BUY
After 1980
• even higher discounts
(Up to 60% for houses
and 70% for flats)
• increased complexity
After 1998
• new maximum
discounts and
regional variation
Trends: Cumulative proportion of stock sold by Region: England 1980-2001
15%
20%
25%
30%
35%
1979/80-1993/94
1994/95 1996/97 1998/99 2000/01
EAST
E MIDS
W MIDS
S ES WN E
ENGLANDLONDONN W
Y & H
RTB Sales in English Regions: 1980-2005
0
5,000
10,000
15,000
20,000
25,000
30,000 North East
North West
Yorks & Humber
E.Midlands
W.Midlands
East
London
South East
South West
Proportion of social housing stock sold to sitting tenants: 1980-2001
CURS Urban andRegional StudiesCentre for
© CURS, The University of Birmingham
This work is based on data provided with thesupport of the ESRC and JISC and usesboundary material which is copyright of theCrown and the ED-LINE Consortium.
Proportion of social housing stock sold to sitting tenants1979/90 to 2001/02, by local authority districts and Unitary Authorities
LegendProportion of all stock
Over 40% (39)35% to 39% (82)30% to 34% (97)25% to 29% (63)Up to 24% (73)
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
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
Birmingham
TRENDS: BIRMINGHAM
Sales of council stock 1957-2002
0
100
200
300
400
500
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
Date of sale
Ave
rage
num
ber o
f sal
es p
er m
onth
Houses and bungalows
Flats and maisonettes
Sales of council houses and flats in Birmingham 1998/99 to 2005/6
05001,0001,5002,0002,5003,0003,500 number of
sales
1998
/99
1999
/200
0
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
Year
Houses
Flats
Valid Sales before Right to Buy (as % valid properties)
1980
100%
0%
Smoothed averageover 500m
Proportion of council stock sold
1985
100%
0%
Smoothed averageover 500m
Proportion of council stock sold
1990
100%
0%
Smoothed averageover 500m
Proportion of council stock sold
1995
100%
0%
Smoothed averageover 500m
Proportion of council stock sold
2000
100%
0%
Smoothed averageover 500m
Proportion of council stock sold
Ratio of Sold properties to remaining Council managed Stock (2001)
What has been Sold and Who has Bought?
• Middle aged and middle income
• Better properties
• Longer tenancies
• Purchasers Becoming younger
TRENDS:DISCOUNTS
• Rising with changes in legislation
• Falling subsequently with younger purchasers and lower maximum discounts
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
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’
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
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
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)
Selected estates in Birmingham
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?
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
Birmingham Estate changes 1981-2001:Tenure
Estate %Social 1981 %Social 2001 Decline in Social Housing
Ladywood 96 69 27
Hawkesley 86 57 29
Woodgate Valley 81 54 27
Castle Vale 80 50 30
Shard End 79 45 34
Kingstanding 77 45 32
Falcon Lodge 64 33 31
Pineapple 47 33 14
Sparkbrook 44 36 8
Ward End 43 30 13
Perry Common 39 22 17
Spring Road 27 17 10
Estates 61 39 22
Birmingham 39 28 11
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
Leakage to private rentingEstate PRS growth as % of All Private growth
Ladywood 43.2%
Hawkesley 24.5%
Woodgate Valley 28.6%
Castle Vale 21.8%
Shard End 25.6%
Kingstanding 23.1%
Falcon Lodge 16.4%
Pineapple 30.9%
Sparkbrook 40.5%
Ward End 29.4%
Perry Common 28.8%
Spring Road 28.4%
Estates 27.7%
Birmingham 23.9%
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?
How have individual estates changed ?
More social mix?
Is there more social mix following privatisation?
• 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?
• 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 ethnic mix following privatisation?
• Ethnicity? • Trend on estates as a whole similar to city
• Polarised pattern between estates
• Related to existing BME presence (market)
Growth in non-white population 1991-2001: Birmingham Estates
• 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?
Estate % White 1991
% White 2001
Difference
Birmingham
78 70 -8
Ladywood 68 55 -13
Hawkesley 94 91 -3
Woodgate Valley
94 89 -5
Castle Vale 95 92 -3
Shard End 95 90 -5
Kingstanding
94 91 -3
Falcon Lodge
98 96 -2
Pineapple 91 91 0
Sparkbrook 24 14 -10
Ward End 69 48 -11
Perry Common
92 87 -5
Spring Road 76 61 -15
Estates 81 71 -10
Social renting dampens trend?
• 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
What happens to property values following privatisation?
Same 12 estates in Birmingham
Indicative data on council house sale prices and wider market
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
Increases in sale prices 1998-2003 partly relate to adjacent market
£15,000
£17,000
£19,000
£21,000
£23,000
£25,000
£27,000
£29,000
£31,000
£33,000
1998 2003
Perry Common
Falcon Lodge
Greater Kings Norton
Sparkbrook and Sparkhill
Greater Bournville
Kingstanding
Grand Total
Hodge Hill, Shard End andBucklands End
Bartley Green
Spring Road
Property Values in selected estates:
Different rates of change
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
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
Conclusions: Neighbourhood effects of Privatisation
• The social rented sector operates within a market and internal processes similar to market?
• Differentiation between social rented estates carries over to market difference
• Within the market differentiation uncontrolled– Housing choice less managed– Investment in property relates to market position– Turnover and turbulence reflects role in market– Weaker direct management of neighbourhood
• These differences not generating change everywhere but divergent trajectories for estates
Conclusions: Social Housing Privatisation
• Housing tenure interacts with economic, demographic etc. to shape social mix
• Privatisation not creating or preserving mix
• Social mix strategies based on manipulating housing tenure are unreliable.
• The problems associated with the least attractive estates not addressed by the sale of individual dwellings: require policies to address regeneration, neighbourhood dynamics and management.
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