Housing in Wales

PLEASE APPRECIATE THAT I GET SENT MORE INFORMATION AND LEADS THAN I CAN USE. I TRY TO RESPOND TO EVERYONE WHO CONTACTS ME BUT I CANNOT POSSIBLY USE EVERY BIT OF INFORMATION I’M SENT. DIOLCH YN FAWR

The title tells you what this week’s article is about. I’m going to look at how the picture has changed in the past few years.

THE BIG PICTURE

Obviously, there are different types of housing, from mansions like Jac o’ the North Towers to more modest owner-occupied properties; then we have social rent properties, and properties rented from private landlords.

So let’s start by looking at how types of tenure have changed over the past two decades. (The year up to March 31, 2001 is the earliest I can find on the StatsWales website.)

The table I’ve drawn up is fairly self-explanatory. ‘Registered Social Landlord’ (RSL) is of course the official term for housing associations.

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The headline figure is that there are 163,067 more dwellings or housing units in 2020 than there were in 2001. Though in the same period the population rose from 2,910,232 to 3,152,879, while the average household size fell from 2.36 to 2.26.

In fact, if we multiply the total number of housing units by the average household size we arrive at a figure of 3,248,901.42. Almost a hundred thousand more than the population estimate. But of course calculations are complicated by people living in care homes, prisons and other institutions. And then there are holiday homes. And properties that have just been abandoned, where it’s often difficult to track the owner.

So, all things considered – and without taking my socks off to do some really serious figuring! – we have roughly the same availability of housing in relation to demand as we had twenty years ago. Maybe things are worse.

Something else we can extract from the table is that in 2001 19% of Welsh properties were social rents, whereas the figure today is just 16%.

But perhaps the biggest change has been the doubling in the percentage of properties now rented from private landlords.

If current trends continue then very soon more people, more families, will rent from private landlords than from councils and housing associations combined. This of course is what the Conservatives want, but why is it happening in ‘progressive’ Wales?

SOCIAL HOUSING

In 2001 we had 242,853 units of social housing. By 2020 this had fallen to 229,902, a decrease of 12,951. Found in this table.

Partly explained by 34,829 units being sold in this period under the Right to Buy legislation introduced in 1980 by the first Thatcher government, with this later supplemented by Right to Acquire.

Though offset by the building of 21,878 social rented housing units in the same period. Just over 1,000 a year.

Right to Acquire is Englandandwales legislation introduced by the Blair government and in operation from 18 January, 2005. Explained more fully here.

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At this point I should tell you that not all sales of social housing are accounted for by Right to Buy and Right to Acquire because this table tells us there have also been sales of “non-social housing”. Though I don’t understand why the figure for this category is only shown from 2013 – 2014. Though there’s certainly been a steady increase since then.

Building just over one thousand social housing units a year must be considered a failure after two decades of socialist administrations in Cardiff Bay. Especially when we remember that in 1979 – 1980 (immediately before Right to Buy was introduced) Welsh local authorities built 3,322 new council homes. (RSLs built a further 377.)

And a thousand a year looks even less impressive when we remember that in the period of devolution a couple of billion pounds in capital grant funding has been given to an ever-expanding galaxy of housing associations.

In the past five years alone, £574 million pounds of Social Housing Grant (SHG) has been paid to housing associations. Wales & West, Labour’s favourite, has seen £61m of it.

SHG is not the only capital grant paid. There’s also the Housing Finance Grant.

I’ve drawn up a table for SHG payments you can view by clicking here. It’s quite a big table, so please have patience.

(I should add that while the bottom line is correct I can’t vouch for every figure in every column. I may have made a mistake or two in transcribing them. So here are the figures I received.)

While the amount paid in SHG from 2015 – 2016 to 2019 – 2020 was 20% more than for the previous five years the stock of social rented housing increased in the same period by less than 2%.

We know that housing association executives like to pay themselves big salaries, and drive fancy company cars . . . shiny new offices are a must . . . and how can they miss out on all the conferences and other jollies, but these could never account for the increasing gulf between funding received and social housing built.

Something else must be going on.

If nothing else, Wales is following England in providing less social rented housing. So much for Rhodri Morgan’s, “clear red water”. So much for, “Welsh solutions for Welsh problems”.

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The Tories came to power in 2010, and that’s when the decline started. Clearly, the Labour management team in Corruption Bay is following Conservative directives when it comes to social rented housing.

MONEY, MONEY, MONEY

If we take the period 2014 – 2015 to 2019 – 2020 we see that it covers important changes in the way RSLs are regulated, and also how they operate.

I’m sure most people didn’t notice, but in the past five years Welsh housing associations were originally private bodies, were then made public, before being privatised again.

It was the Office for National Statistics that decided they should be public bodies due to the amount of public funding they were receiving. Plus the political involvement. But making them public bodies transferred their debts to the public ledger and so the parliaments in London, Edinburgh, Belfast and Cardiff quickly privatised them again.

It’s explained clearly and succinctly in the article below from Inside Housing, just click on it to make it readable. (Here’s a link to the original article.)

I bet you’re thinking . . . ‘If housing associations are now private companies, why are they still getting lashings of public funding?’ Funding that, as we’ve seen, has greatly increased since they were ‘re-privatised’!

The answer is that they’ve branched out into building private housing.

To such an extent that, in addition to the public funding, our housing associations are also taking out private loans with various financial institutions.

Here’s a report from May of United Welsh of Caerphilly, which has just 6,000 properties, borrowing £50m from Scottish Widows.

In July we learnt Coastal Housing Group of Swansea had entered into a £250m ‘refinancing’ deal with Aviva Investors.

In August, Cadwyn Housing Association of Cardiff did a deal with Westbourne Capital Partners of Chicago.

And other housing associations have done similar deals with organisations much sharper than them in the ways of the financial world. I do hope they’ve read the small print.

Though I suppose the only real collateral housing associations have is their housing stock. If they default, does this mean that Welsh social housing stock gets taken over by lenders? Or will the ‘Welsh Government’ step in with yet more money?

Talking of the ‘Welsh Government’, if RSLs need money for investment, why can’t they go to the Development Bank of Wales (DBW), which is already lending to other builders, many from over the border?

So let’s recap. Housing associations, now private bodies, still receive increasing amounts of public funding. Yet they also enter into arrangements with financial institutions around the world. And let’s not forget that the other major source of income – perhaps the major source – is rents from the housing stock they own. Most of which came free as stock transfers from local authorities.

Another noteworthy feature in this period is that most if not all of our housing associations have set up subsidiary companies, or companies that are not subsidiaries but still part of the group.

SUBSIDIARIES, PARTNERS, PRIVATE HOUSING

An example would be the relationship between Ateb (formerly Pembrokeshire Housing Association) and Mill Bay Homes Ltd (MBH). The latter, despite being a separate company, is a “wholly controlled subsidiary company of Ateb Group Ltd”.

The arrangement is that MBH builds and sells market properties and the profits go to parent company Ateb to build social housing or ‘affordable homes’. Which might be fine if Mill Bay Homes had its own money . . . but it hasn’t, it relies on loans from Ateb.

Which means that the ‘Welsh Government’ funds a RSL to build social housing but the money in fact goes to a subsidiary to build open market homes (that most locals may not be able to afford) with a fraction of the original money returning to the parent company.

What is the point of such a system?

While Mill Bay Homes is a company registered with Companies House the Ateb Group is registered with the Financial Conduct Authority.

As we’ve seen with other housing associations, the Ateb Group has also borrowed money recently. Last month from the Principality Building Society. Back in July it was a loan of £18m from bLEND Funding PLC.

Officially, a cash security trust deed.

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Eighteen bloody million! How much does a relatively small, rural housing association need? It’s already getting money from the ‘Welsh Government’, and seems to have stopped providing social rented housing.

A visit to the Ateb Group website turns up what you see below. Quite clearly, Ateb is now a private house builder with social rented accommodation an afterthought.

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Click on ‘homes for sale’ and you of course get taken to the Mill Bay Homes website.

And there seem to be some rum doings between the two.

I am indebted to Wynne Jones in Cardigan for these documents from the Land Registry website (from which I have redacted a few names in the second).

A property on this development in Cilgerran (Ceredigion) was built by MBH, with money borrowed from Ateb, then sold to Ateb for £164,950 in October 2019; the following month Ateb sold a 125-year lease on the property for £57,733.

What business model is this?

Mill Bay Homes makes no secret of the fact that it’s punting for retirees and ‘investors’. The latter category will include Buy-to-Rent landlords, and whaddya know – one of the new Cilgerran properties is already being advertised for rent.

Plot 3 at Maes Rheithordy, Cilgerran, is being rented for £670 per calendar month through Jac y Do Letting of Blaenporth.

A similar arrangement to that between Ateb and Mill Bay Homes exists in Gwynedd between Adra (formerly Cartrefi Cymunedol Gwynedd), which took over Gwynedd council’s housing stock some ten years ago, and its subsidiary, Medra Cyf.

A few days ago Adra put out this puff about building 1,200 new homes across ‘North Wales’. The “housing crisis” referred to is perhaps the lack of housing for commuters in the A55 corridor.

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The subsidiary that will be doing much of the building is Medra . . . with a loan from Adra.

This loan between a Welsh RSL and its subsidiary was arranged by London law firm Trowers & Hamlins. I’ve seen that name in other loans I’ve looked at. Are there no lawyers in Wales?

Of course there are, so who’s directing them to that company?

Also worth highlighting from recent years, in addition to the proliferation of subsidiaries, is the strange partnerships we see being forged.

For an example of this we stay in the north, with Cartrefi Conwy, based in Abergele.

I’ve written about this lot a few times. Below you’ll read what I had to say earlier this year, in Housing Associations, a broken model. The Byzantine network of ‘partners’ also throws up a mystery investor.

“Cartrefi Conwy set up a subsidiary in 2015 called Creating Enterprise CIC (Community Interest Company). Then, in May 2018, Creating Enterprise went into partnership with Brenig Developments Ltd to form Calon Homes. (Assets at 31 May 2019 £37,853.)

From the Creating Enterprise CIC accounts for y/e 31 March 2019. Click to enlarge

As I wrote back in November: “There is a charge against Calon Homes LLP held by Creating Enterprise CIC, which in turn has a charge held by Cartrefi Conwy. Which means that, ultimately, housing association Cartrefi Conwy is in partnership with private company Brenig Developments.”

When we look at the directors for Brenig Developments Ltd we find Mark Timothy Parry and Howard Rhys Vaughan. Both are also directors of Brenig Homes Ltd.”

Another horse out of the Brenig stable is Brenig Construction Ltd. Just another local building firm, run by local people . . . so impeccably local in fact that it could have come from League of Gentlemen.

But then, in December last year, a new director joined, a man who might have been taking his life in his hands if he’d turned up in the Royston Vasey shop.

I’m referring now to Yin Han, a Chinese businessman, presumably bringing a lot of yuan. For when I say Chinese businessman I do not mean that he hails from Hong Kong or Taiwan. Yin Han is a resident and citizen of the People’s Republic of China.

How did Yin Han and Brenig Construction find each other? What do we know about him? I guarantee he did not get involved with Brenig Construction without permission from back home. And that means the Communist Party.

These subsidiaries and partners, together with the loans and investment, are needed to build private housing for sale on the open market.

But housing associations are now private entities, so why do they need subsidiaries and partners to build open market housing? Surely they could do it in their own names?

Of course they could, but that would make it too obvious and probably jeopardise the public funding. So we have this charade of public money for social housing being given to RSLs and then filtered through intermediaries to build private housing.

And the ‘Welsh Government’ is a willing party to this deception.

‘AFFORDABLE HOUSING’

As a student of history, I’ve always loved Palmerston’s quote: “Only three people have ever really understood the Schleswig-Holstein business – the Prince Consort, who is dead – a German professor, who has gone mad – and I, who have forgotten all about it.”

It comes to mind when I see the term ‘affordable housing’. Because there’s a great deal of confusion as to what it means.

It’s important to get a definition because it’s what RSLs now claim to be building, and what the so-called ‘Welsh Government’ is funding.

Is the ‘Welsh Government’ really proud of these figures? And ‘Rent to own’ in fact offers people a share of a lease! Click to enlarge

When I contacted the ‘Welsh Government’ I was referred to a publication wherein was found . . .

“The concept of affordability is generally defined as the ability of households or potential households to purchase or rent property that satisfies the needs of the household without subsidy (further guidance is provided in the Local  Housing Market Assessment Guide) 7 This could be based on an assessment of the ratio of household income or earnings to the price of property to buy or rent available in the open market in the required local housing market area.”

Which is interesting, and for two reasons.

If the concept of affordability is based on what local people on local wages can afford, then why is ‘affordable housing’ not reserved for those same local people? I ask because all the term means in practice is that a few properties in a development are labelled ‘affordable’ – but still put on the open market.

And if a small number of properties in a development are classed as ‘affordable’ then it must follow that the majority of the properties are regarded as unaffordable to most locals. So why are we building so many properties – with public funding! – beyond the reach of most local buyers?

The woolly term ‘affordable housing’ is just a fig leaf for the ‘Welsh Government’ and RSLs to disguise the fact that very little social housing is being delivered.

We are encouraged to believe that ‘affordable housing’ is for local people, or that it means social rented properties. Wrong.

CONCLUSION

This system, as I’ve argued before, is broken. It is broken because it consumes vast amounts of Welsh public funding for little or no Welsh public benefit.

Another cause for concern is that just as many third sector bodies are agencies of the Labour Party a similar picture emerges with housing associations.

In fact, housing associations and third sector bodies operate hand in glove, with the former housing the disruptive ‘clients’ of the latter, many of whom have been shipped into Wales. It’s collaboration like this that contributes to the problems we’ve looked at in Tyisha, Llanelli.

‘Welsh’ Labour’s little empire; stuffed with cronies and others dependent on political patronage and public handouts.

Take Wales & West, which I’ve referred to as Labour’s favourite. The CEO is Anne Hinchey, whose hubby Graham is a Labour Councillor in Cardiff. This explains why Wales & West has pulled down £100m in Social Housing Grant alone in the past decade.

And yet, let us remember that the reason the Office for National Statistics decided to put housing associations into the public sector was because there was so much governmental control!

As the June 2018 article from Inside Housing I reproduced above put it,

“In a letter to the Welsh Government sent yesterday, the ONS left open the possibility to reclassify individual associations as public should the level of state control increase.”

A strong case could be made for reclassifying a number of Welsh housing associations. Certainly Wales & West.

Where do we go from here?

I suggest that it starts with making it clear we do not want housing associations to build properties for sale to Home Counties retirees in Pembrokeshire, or to Manchester commuters in Denbighshire.

The sole duty of Welsh housing associations must be to deliver homes to Welsh people at sales prices or rents WE can afford.

If they are unable or unwilling to fulfil that role then I believe we should let our local councils provide social rented housing. Ensure they are well enough funded to provide decent accommodation to any and all local people wanting it. And make strong local connections the over-riding consideration in allocating those properties.

Then cut all funding to housing associations, which are, after all, private companies. Let them borrow from private lenders – as they are already doing – and cease being a burden on the public purse.

Whatever is decided, the present system is broken. Changes must be made. Even if you think this doesn’t affect you, just think what we could do with the money saved!

♦ end ♦

 

 




Three Encounters With Civil Servants

NUMBER ONE, PENSION SERVICE: My mother is resident in a council-run retirement home. Seeing as State Pensions increased in April the council wants to know by how much my mother’s pension has gone up so they can re-calculate her payments. Fair enough. Problem being that despite the fact that everyone should have been informed by the Pension Service of their increase by the end of March, my mother has received nothing.

So last week I went on the internet, put in the correct post code, and came up with the details for the Swansea office of the Pensions Service. Using my dainty and impeccably manicured digit I telephoned the number given. Eventually I reached a live, unrecorded, human being, to whom I explained my predicament. After repeating that all notifications had been sent out long ago the woman on the other end of the line finally accepted that my mother had not received hers, and that this was why I was ringing.

In the hope of being helpful I suggested that she tell me the the address to which the notification would be sent in order for me to confirm that it was correct. She: “Oh, can’t do that”. Me: “But if you sent the original notification to the wrong address then you’re going to repeat the mistake”. Silence. Me: “Why can’t you tell me the address – I’m her son, for God’s sake!” She: “I’ll have to put you on to the supervisor”. (I felt like saying that had no desire to mount her supervisor, but I bit my tongue.) From the supervisor I got the same metronomic response. Which I could have understood if I’d been asking MI6 for the names of their operatives in Dushanbe . . . but I was asking these bloody women to give me the address of a retirement home in Gwynedd!

I’ve just phoned the Pension Service again. To be told that “it takes seven to ten working days”. Why should it take that long to do something that should have been done properly by the end of bloody March! And another thing. Although the telephone number given on the web page suggested I would be put through to the Swansea office, the three women I spoke with (two last week and one today) all had north west English accents, making it very unlikely that they are based in the City of the Blest.

NUMBER TWO, WELSH EUROPEAN FUNDING OFFICE: About thirteen years ago I allowed myself to be talked into raising money for a new community centre in the village. After a few false starts, and once I was allowed free rein, I got into my stride and raised the necessary lucre. The major funder was the Welsh European Funding carwyn-jones-755691908Office. Which, if nothing else, proves that some EU funding is well spent. For our now self-funding community centre provides jobs, facilities and amenities for the community seven days a week. Anyway, last month, out of the blue, came a letter from WEFO’s Aberystwyth office saying that they wanted to call and check on how the money had been spent.

The meeting went ahead last week. Fortunately, I had kept all the paperwork they needed and was able to answer the questions. (I managed to steer the inquisitor away from my six-week fact-finding mission to Tahiti.) I was not surprised to learn that this visit should have been made in 2009 or 2010, rather than eight years after the building had opened. The meeting ended with the WEFO official giving me an e-mail address to which I would send copies of invoices and other documents requested. Which I did . . . but they didn’t get through, because the WEFO Internet system does not accept e-mails with attachments.

Or perhaps not from unverified sources, which I could understand. But if so, then it should be possible for a member of WEFO’s staff to contact their IT department and say, ‘Let this one through, please, I’m waiting for this information’. How hard can it be? Anyway, once we’d realised what the problem was WEFO sent me an envelope, with two first class stamps. Then I had to print out the various bits of paperwork, put them in the envelope. and mail the envelope. Money and time wasted, unnecessary delay, me frustrated, and all so bloody avoidable.

How can WEFO, or any organisation, operate at anything approaching maximum efficiency when people like me cannot e-mail the information WEFO itself is asking for! No wonder they’re years behind with their work. And perhaps this goes some way to explaining why we ‘qualify’ for a third round of EU Structural Funds.

NUMBER THREE, STATS WALES: Earlier this week I went to the StatsWales website looking for the numbers of English born living in Wales, by local authority area, from the 2011 census. Once into the site, I went to the publications under ‘Population’, but nowhere could I find the information I wanted; even though the section was able to offer bed-time reading like, ‘Child poverty dental indicators by year‘ and ‘European Union harmonised unemployment rates by gender, area and year‘, plus the absolutely riveting, ‘Smoke detectors and other fire detection equipment in dwellings by year and Fire and Rescue Service area‘. The section contained many reports covering ‘gender’ and ‘ethnicity’, such as ‘Ethnicity of staff by Fire and Rescue Service‘.

Today I got my reply (see panel). Now, in fairness, I knew that this information was available on the Office of National Statistics website, and has been for a few months, but that’s not the point. These are important figures relating to Wales, so I have every right to expect to find them on a website devoted to Welsh statistics.Stats

Given the data available on the site, the obvious obsession with race and gender, my guess would be that this site is maintained by someone more concerned with observing political correctness than with providing information. And given the absence of the figures I wanted, maybe no friend of the Welsh. Then again, perhaps it was a political decision not to offer these damning and alarming figures.

Though, surely, if there are figures to tell us how many Afro-Caribbeans, women and other groups are employed by the Mid and West Wales Fire and Rescue Service then it must be possible to tell us how many English are employed, and in what ranks? And how many of the top civil servants in Wales are English? Senior police officers . . . academics . . . doctors and other medical staff . . . senior officers in local government, BBC, etc., etc. Could it be that StatsWales is a bit like our media and our politicians, treating us as mushrooms? Keeping us in the dark by withholding the really damning stuff that would lay bare colonial Wales, while feeding us regular dollops of shit in the form of what they deem it safe to tell us.