Abstract

This paper revisits an assessment, published ten years ago in PPP, of the then-flagship regeneration programme Housing Market Renewal. It finds that the emergent concerns in 2007 with affordability, which partly underscored a justification for the programme’s cancellation, remain while suggesting that HMR’s key regeneration objectives have gone unaddressed. The paper briefly reviews some ways that the landscape now is similar and different to 2007. The key difference is in the government’s overall approach to regeneration, which now relies more on attempts to foster regional economic growth through people-based strategies. By looking at HMR through the lens of competing logics of economic geography at a time of ‘austerity urbanism’, the paper tentatively concludes that government needs to rediscover a more obviously place-based approach to regeneration.

In 2007 the Government’s then-flagship regeneration programme, Housing Market Renewal (HMR), was living on borrowed time. Conceived in 2002 as part of John Prescott’s Sustainable Communities Plan, 25 local authorities, organised into nine sub-regional ‘Pathfinders’, shared a pot of over £2 billion aimed at reversing the fortunes of the weakest urban housing markets in the North and Midlands of England (Ferrari and Lee, 2010).

HMR was a sub-regional area based regeneration programme which aimed to restructure local housing markets through a combination of environmental improvements, property rehabilitation and the comprehensive masterplanning and redevelopment of housing estates, sometimes involving demolition, building replacement housing, and tenure diversification. It was focused on those parts of England considered most at risk of low demand, as evidenced by a combination of indicators about low/falling house prices, high rates of turnover and empty properties, and socioeconomic characteristics (Leather and Nevin, 2013). According to estimates drawn together by Leather and Nevin (2013), by the time it was cancelled. the programme had refurbished over 85,000 homes to the Decent Homes Standard or above, cleared over 21,000 homes, and replaced them with around 29,000 newly built homes.

Yet, less than five years after its inception, the programme was already being overtaken by events. Critics were calling into question the wisdom of such an expensive intervention into a job that it appeared that the market was performing perfectly well. House price rises in the type of deprived Northern neighbourhood that characterised HMR areas were outstripping those in the wealthy South East, and a new malaise — unaffordability — was rife throughout HMR’s industrial heartlands, standing in direct contrast to a narrative of decline and abandonment. These price rises were interpreted as an indicator of healthy demand and were therefore undermining a programme designed to “eradicate the problems of low demand housing by 2020” (ODPM, 2005: 10) and whose defining characteristic was, accurately or otherwise, wholesale demolition and redevelopment of homes. HMR’s approach to community engagement needed further development (Cole and Flint, 2007) and its underlying rationale too complex and too poorly articulated, and these weaknesses led, it would seem, to a clamour for its demise. The incoming Prime Minister, Gordon Brown, was saying a lot less about regeneration and a lot more about the need for a step change in new housing delivery everywhere. The economic evidence supplied by two reviews by Kate Barker (2004; 2006) seemed to suggest (albeit not without important caveats) that, fundamentally, to bring down prices required a return to the levels of mass housebuilding not seen since the 1970s.

‘Housing Market Renewal in an Era of New Housing Supply’ (Ferrari, 2007) was my attempt to understand how HMR could survive this turn in the political discourse. But the biggest change, not entirely without its foreseers, was just around the corner. The original article, in the third issue of People, Place and Policy, was written just before and published just after the collapse of Lehman Brothers and the onset of the Global Financial Crisis. For at least 12 months prior to this, the UK government was preoccupied with rampant housing inflation. Yvette Cooper, then the Housing Minister, began attending Cabinet meetings in a sign of how seriously the Brown government was taking the developing housing crisis. Buoyed by his success in pulling off a tricky “soft landing” in the UK economy as Chancellor in the latter half of the 1990s, Brown seemed insistent that the same feat could be achieved in the 2008 housing market. In the event, the crash did come, albeit in a form modified from Britain’s previous housing downturn experience in the early 1990s: repossessions this time were mercifully low, interest rates did not spiral out of control (the opposite, indeed), and, while taking a hit, prices did recover reasonably quickly in many parts of the country, at least in nominal terms. Structurally, however, many of the same issues that afflicted urban housing markets in 2007 would appear to remain: widening gaps both between the haves and the have-nots, and between house prices (and rents) and incomes; and the persistence of pockets of disadvantaged and the “left behind”.

It is arguably in what is different after 2007 that helps to explain some of the fundamental structural problems with housing markets in England. That is why looking back to articles such as those published in those early issues of People, Place and Policy, can be so instructive. Reading the original article again I was struck by both what remains the case and what is different. Yet, reflecting on events in the decade since the article was written, I remain unconvinced that pulling the rug from under programmes like HMR was a good idea.

This paper briefly reviews some of the main features of urban housing markets in the former HMR areas and discusses the extent to which the issues prevalent in 2007 remain and reflects also on the key differences now. It puts forward a tentative argument that we are still dealing with housing market issues that are structurally similar to those that were facing HMR pathfinders, while the language and practices of economic regeneration that so fundamentally frame any approach to housing renewal have transformed in intent and effect.

What’s the same? The persistence of housing market structures

It is now evident that encouraging the delivery of new housing supply remains as foundational to the government’s strategic response to housing problems as it was rapidly becoming in 2007. As noted above, this was a feature of the subtle discourse change as Blair gave way to Brown. Part of the important regional dynamic which underpinned the Sustainable Communities Plan and its regionally variegated strategy gave way to a more national approach focused on growth. This staged HMR as a housing programme first and foremost. Arguably some of the strategic planning responses to this challenge, such as relaxing controls and, as I put it then, ‘questioning the sanctity of green belt land’ (Ferrari, 2007: 125) have since become normalised and embedded.¹

The original paper identified concerns about house price inflation and the decoupling of prices from incomes as leaving ‘no corner of the country untouched’ (p. 125). Notwithstanding a mushrooming of unaffordability in London, ONS data suggests that on average in England affordability has largely remained stable at just over seven times earnings for the lower-quartile affordability ratio (see Figure 1).

Those regions containing HMR areas² have all seen affordability improve marginally by this measure. It is noteworthy that in all regions the ratio for lower quartile prices to earnings remains substantially higher than the 3-4x benchmark traditionally used for mortgage approvals. Yet, all told, the intervening period has been characterised by a remarkable amount of stability, suggesting that the most significant problems with affordability actually emerged during the years prior to the crash in 2007-8. Paradoxically, perhaps, it was the extended period of economic growth and the increased household incomes, stability and confidence that this gave rise to which helped to push house prices up so unsustainably.

The data are not without their problems, however. Affordability ratios track prices of sold properties; the ratio is not affected where households are not accessing properties and where properties go unsold. The conventional metrics do not detect such ‘latent’ unaffordability, which is instead laid bare through analysis of other measures such as the average age of first time buyers and the deposits of them (see DCLG, 2017). While problems in the housing market may manifest themselves most visibly at the neighbourhood level, they reflect a complex intersection of structural economic and social changes at the regional and national scale. Moreover, these structural changes have been decades in the making, both predating and likely surviving interventions like HMR.