We need a new kind of tenure for a new kind of housing market

David Rodgers explains why the co-operative housing (tenure) bill is so sorely needed to fix the UK housing market.

David Rodgers has been Executive Director of CDS Co-operatives, the largest secondary housing co-operative in England, since 1979.

Ask anyone looking for a decent home they can afford and the reality of the crisis in the UK housing market will immediately become apparent.

House building is at its lowest in any year (save during the Second World War) since 1924, with just 124,000 predicted to be completed this year in the face of acknowledged need for at least 275,000.

Mortgage lending is at its lowest ebb for decades as banks rebuild their liquidity and can no longer borrow the cheap money that flowed back to our Western economies from trading deficits with China and other developing Eastern economies: cheap money that created the sub-prime mortgage lending and toxic debt in the USA housing market and the housing market bubbles in the UK, Spain and Ireland that fuelled the global financial crisis of 2008.

First time buyers need a deposit that now averages 27 per cent, the average age of first time buyers has risen to 37 and 40 per cent of young people believe that they will never be able to afford to be home owners.

The shock wave of the global financial crisis is still rippling through the world economy. The only housing sector that is benefitting from these seismic financial and economic shifts is the private rented sector. In the absence of alternatives, private renting is on the up and rents are increasing.

As home ownership begins to fall it is predicted that private renting will continue to rise towards 20 per cent.

These trends in housing supply are exacerbated by the coalition government’s 60 per cent cut in investment in new homes through the national affordable housing programme and its insistence that “affordable rents” are set at 80 per cent of market rents (“affordable” in this context being truly Orwellian, because for most people in need of an affordable home in the high costs areas particularly in the South of England, 80 per cent of market rent is not affordable).

These are the realities facing newly forming households trying to find a decent home they can afford and raise a family in. In order to solve this housing crisis innovative new ways of providing affordable homes are needed.

It is against this background that Labour & Co-operative MP Jonathan Reynolds is presenting to his ten minute rule bill, the co-operative housing (tenure) bill 2011, to the house of commons on 11th October.

The Bill proposes to enshrine in English law the legal principle that the right of occupation of a dwelling can arise through membership of a housing co-operative which owns property rather than solely through the grant of a tenancy by a superior (feudal) landlord.

To create a new form of tenure in the midst of a housing crisis may seem esoteric.

Yes, Jonathan Reynolds’s co-operative housing (tenure) bill will overturn over 1,000 years of feudal land law history which has its roots in the Dark Ages from whence the only way to gain occupation rights was either as freeholder (of the Crown) or as tenant of a superior feudal landlord: a history which has led to the bi-polar approach to housing ownership and rental as the two only available tenures.

This bi-polar tenure structure and the financial advantages in the past that accrued from individual home ownership – advantages that will not return in this world after the financial crisis – is a prime source of the thinking that home ownership is the tenure of choice and that rental is the tenure of the poor or of last resort that dominates UK housing markets.

Jonathan Reynolds’s attempt to create co-operative housing tenure as a distinct new legal way of gaining rights to occupy a home is not just an esoteric legal proposition.

It is motivated by a recognition that, if we are to meet the need to increase the supply of affordable homes, new and innovate ways of doing so are desperately needed; new ways that will allow communities up and down the country to provide the homes they need on land that will otherwise remain barren and undeveloped. Jonathan Reynolds’s thinking is driven by the recognition that, as Albert Einstein insightfully said, “We can’t solve problems by using the same kind of thinking we used when we created them”.

In proposing his co-operative housing (tenure) bill Jonathan Reynolds understands that the UK’s exclusive bi-polarity approach to housing tenure has been and remains a constraint on housing supply. He knows that in the UK co-operative housing provides less than 0.1 per cent of homes in comparison to the average of ten per cent contribution to housing supply in the rest of Europe and 14 per cent in Scandinavia.

Reaching that level of supply of co-operative homes would add six million homes to UK housing supply.

He understands that, given the right legal framework such as has existed in Sweden since 1920, individuals would chose to live and invest in owning equity in a housing co-operative rather than struggle on their own to afford to buy a home with a personal mortgage in a volatile housing market and an economically uncertain world.

He also knows that communities would work to find land on which to develop co-operative housing for their community because they could be certain that, with the right to co-operative tenure enshrined in law, the co-op homes they would help to build would remain affordable in perpetuity for future generations.

He understands that co-operative housing tenure would open the door to institutional investment in the provision of affordable homes because co-operatives, as a long term responsible owner of housing, controlled and maintained by its resident owner members, offers to individuals, pension funds and other long term investors an attractive, secure and assured rate of return on their investment.

He knows that in Germany and other countries communities invest in co-operative housing because it is good for the social, economic and environmental sustainability of their community. He knows that administering a housing co-operative under inappropriate landlord and tenant law creates numerous practical difficulties.

He also knows that the absence of appropriate co-operative legislation puts the UK government is in breach of its international obligations under International Labour Organisation resolution 193 which calls on all member governments to enable the establishment of co-operatives through appropriate legislation.

The co-operative housing (tenure) bill 2011 will open a new door for the building of affordable homes that is so desperately needed. The Government should embrace Jonathan Reynolds’s initiative and ensure that the Bill is given the time it needs to become law.

See also:

‘Back of a fag packet’ housing policy continuesKevin Gulliver, October 3rd 2011

Social housing needs a ‘New Deal’Kevin Gulliver, September 28th 2011

Boris fighting London’s corner on housing benefit cuts? Really?!Jenny Jones AM, July 5th 2011

On housing, while Ed has got it wrong, Boris has the answerVidhya Alakeson, June 13th 2011

Government spin on so-called “rich” social housing tenants exposedKevin Gulliver, June 6th 2011

47 Responses to “We need a new kind of tenure for a new kind of housing market”

  1. teachmeproperty

    We need a new kind of tenure for a new kind of housing market http://t.co/37ibpTuV

  2. Dr John Lever

    We need a new kind of tenure for a new kind of housing market http://t.co/x8nqB6yO

  3. Donald Vieth

    We need a new kind of tenure for a new kind of housing market: He also knows that the absence of appropriate co-… http://t.co/sgfUYP9A

  4. Joe Fortune

    RT @leftfootfwd: We need a new kind of tenure for a new kind of housing market http://t.co/VCKjgQ7b >something for the ad breaks in Xfactor

  5. Laura Blake

    Ahead of Tuesday's housing debate, @davidarodgers writes for @leftfootfwd on the need for Co-operative Housing Tenure http://s.coop/642c

  6. Pete Berry

    RT @leftfootfwd: We need a new kind of tenure for a new kind of housing market http://t.co/5cfY60f7 // Kind of new thinking we need #co-op

  7. James Doran

    Ahead of Tuesday's housing debate, @davidarodgers writes for @leftfootfwd on the need for Co-operative Housing Tenure http://s.coop/642c

  8. paulstpancras

    .Strong Recommend We need a new kind of tenure for a new kind of housing market http://t.co/qCPWDGoW #housing #cooperative

  9. bill bold

    .Strong Recommend We need a new kind of tenure for a new kind of housing market http://t.co/qCPWDGoW #housing #cooperative

  10. Maria Pretzler

    We need a new kind of tenure for a new kind of housing market, writes @DavidARodgers: http://t.co/cu3eNFdO

  11. Michael

    We need a new kind of tenure for a new kind of housing market l Left Foot Forward – http://t.co/cEDrrQsI

  12. Alex Braithwaite

    RT @leftfootfwd: We need a new kind of tenure for a new kind of housing market http://t.co/14lQpOTv

  13. Tim Worstall

    “It is motivated by a recognition that, if we are to meet the need to increase the supply of affordable homes, new and innovate ways of doing so are desperately needed; new ways that will allow communities up and down the country to provide the homes they need on land that will otherwise remain barren and undeveloped. Jonathan Reynolds’s thinking is driven by the recognition that, as Albert Einstein insightfully said, “We can’t solve problems by using the same kind of thinking we used when we created them”.”

    The major cost in housing is the value of the planning permission. You can build a nice house for £100,000. You can get 10-15 on a hectare of land, said hectare costing perhaps £15,000 if it’s currently zoned as agricultural.

    So, houses cost £101,000 to build. So why do they actually cost £200,000 and up to buy? Because we’re not issuing enough planning permissions meaning that the value of the planning permission that has been issued is 50% and up of the cost of a home.

    There’s a pretty easy solution to this. Issue more planning permissions. Thus the scarcity value of planning permission will fall and so will house prices.

    Why do all sorts of complicated things with forms of tenure when the solution is so damn simple?

  14. Rob the crip

    I suspect giving more planning permission will not solve it because you will have building companies fighting for the land and the prices will go up and up.

    But I see the price of a house being £120,000 in my area for a three bedroom new build, lots of planning permission has been given on farming land two acres is now worth one to two million quid, hence schools are selling off playing fields again.

    But £120,000 in my area may as well be a million with average cost being way to high for somebody on £14,000 which is the average wages in my area.

    I see people buying the homes getting a mortgage and six months down the line they have a for sale sign out side the door.

    We are not building houses to rent at all.

  15. The New Rochdale Pioneers | Red Brick

    […] to David Rogers, the Executive Director of CDS Co-operatives, ‘ Jonathan Reynolds’s Bill will overturn over 1,000 […]

  16. Dave Citizen

    If the new bill helps bring an adequate supply of land for housing on stream and incorporates safeguards to ensure the land is all built on and not simply acquired by land owners and drip fed into the market to maximise values, it may be worth having.

    A simpler way may be to encourage local Councils to compulsory purchase sufficient agricultural land at agricultural land values and then give sufficient time limited build permissions.

    All that needs doing then is somehow ensuring that all these houses aren’t simply bought up by private landlords to be rented out at cartel rents as happens now.

  17. London IWW

    We need a new kind of tenure for a new kind of housing market http://t.co/kGic0IPy | #PublicServices #Anticuts

  18. E'Liza Sparks

    Basic Human Rights / our Human Givens desperately need addressing. The symbolism of 'home' is beyond calculation: http://t.co/uT5Ghv0T

  19. Co-operative Party

    Housing #coops expert @davidarodgers explains the importance of @jreynoldsMP's Co-op Housing Tenure Bill http://s.coop/642c

  20. Coop Enterprise hub

    RT @CoopParty: Housing #coops expert @davidarodgers explains the importance of @jreynoldsMP's Co-op Housing Tenure Bill http://s.coop/642c

  21. Dean Willis

    RT @leftfootfwd: We need a new kind of tenure for a new kind of #housing market http://t.co/1qakiSLg

  22. Joe Fortune

    Housing #coops expert @davidarodgers explains the importance of @jreynoldsMP's Co-op Housing Tenure Bill http://s.coop/642c

  23. David Rodgers

    Housing #coops expert @davidarodgers explains the importance of @jreynoldsMP's Co-op Housing Tenure Bill http://s.coop/642c

  24. Leon Wolfson

    @1 – Because putting new houses in positions where only the rich will be able to afford travelling back and forward to them won’t touch the core issues and WILL destroy a lot of the countryside.

    No, what we need is brownfield site developments. Slap a major tax on empty houses and empty brownfield sites. And cap rents, with rent boards. They can’t keep on rising above inflation without creating a major humanitarian crisis in this country, and social cleansing.

    Oh, and start building council houses again.

  25. Judith Clarke

    I fully support you.

  26. Nick Harriss

    Amongst the backbiting & spin, an MP who's proposing something sensible, apolitical & could make a genuine difference http://t.co/igaQXYv5

  27. Jonathan Pickering

    Comrades, I voted Labour as a Brit in Ireland when I could, but now I am a British citizen resident in England, so there’s not much I can do and sending money is illegal. Hope the housing estates around Clonmel and elsewhere get lived in eventually. Wish Brits could vote for a President. Best regards, Jon

  28. bryan thomas

    Supply is the problem, the house builders keep it low to increase their profits. They have no incentive to build in greater numbers. The Housing Associations have limited ambitions and money from central government is also low ‘so as not to compete with the market’. Both conservative and Labour governments are in thrall to big business and house building is certainly that. To reduce the cost of housing, supply must be increased massively but only the government through council housing and land aquisition could possibly fulfill this task and the political will is not there to even consider this. The supply of available land is also kept low by the planning system and preservation of historic land uses, and again only the government can affect that. Alternative foms of tenure can widen the availability of what is on offer which should give low income families a better choice but is unlikely to affect the overall supply drastically. So I agree with Leon, start building council housing again, and lots of it.

  29. Jonathan Reynolds MP

    Read David Rodgers in support of my #coophousingbill: http://t.co/WAkKXaUh @coopparty

  30. Michael Stephenson

    Read David Rodgers in support of my #coophousingbill: http://t.co/WAkKXaUh @coopparty

  31. timmymc

    RT @jreynoldsmp: Read David Rodgers in support of my #coophousingbill: http://t.co/eaN3CcRM… @CoopParty

  32. Laura Price

    Read David Rodgers in support of my #coophousingbill: http://t.co/WAkKXaUh @coopparty

  33. Co-operative Party

    RT @jreynoldsMP: Read David Rodgers in support of my #coophousingbill: http://t.co/bZ1aWQNf @coopparty

  34. Co-op Councils

    RT @jreynoldsMP: Read David Rodgers in support of my #coophousingbill: http://t.co/9FI6Hba0 @coopparty

  35. Rikbut

    Read David Rodgers in support of my #coophousingbill: http://t.co/WAkKXaUh @coopparty

  36. Clive Lewis

    If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/PTIZb9yG

  37. Co-operative Party

    If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/PTIZb9yG

  38. 凸凹

    If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/PTIZb9yG

  39. Alexander MacDonald

    If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/PTIZb9yG

  40. Janet Edwards

    If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/PTIZb9yG

  41. Leon Paternoster

    RT @labourlewis: If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/RnNr7KAj

  42. lewism

    RT @labourlewis: If we had the same %age of co-op housing here as in Scandinavia we'd have 6m more homes… http://t.co/RnNr7KAj

  43. The House of Lords ties itself in noble knots over the NHS bill | Left Foot Forward

    […] We need a new kind of tenure for a new kind of housing market – David Rodgers, October 8th 2011 Share | Permalink | Comments: 33 Comments […]

  44. Garryq

    We need a new kind of tenure for a new kind of housing market: http://t.co/pIpmsGSi

  45. holly jo Sparks

    Albert Einstein insightfully said, “We can’t solve problems by using the same kind of thinking we used when we… http://t.co/jc7Ntod8

  46. Everyone agrees mutualism helps, but where’s the action? | Left Foot Forward

    […] also: • We need a new kind of tenure for a new kind of housing market – David Rodgers, October 8th […]

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