Early morning, 21 November and housing is the top story on the Radio 4 today programme, on television and in the papers. At last it would seem the government has begun to take note of the crisis that housing is in, and the devastating consequences that the lowest levels of house building since records began is having on the construction industry and economy generally. Indeed figures announced this week showed that starts for affordable homes had dropped by 97%.
So the launch of a broadly coherent housing strategy is a much needed government intervention.
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“Laying the Foundations: A Housing Strategy for England” is not going to solve our problems overnight but it is a tremendous acknowledgment of how far back housing construction has slipped over the last few years.
One of the key points made by the Government is that the fall in construction workforce is four times greater than overall workforce decline.
So will the strategy make the right kind of difference?
The key headline was the New Build Indemnity Scheme which will help first time buyers by enabling them to receive 95% mortgages for new homes and flats. As part of the deal house builders will have to deposit 3.5% of sale price in an indemnity fund. The Government will provide additional security for the loan in the form of a guarantee. This is a very welcome stimulus to get the housing market moving again. We’ve all read how people can’t afford to buy a house until they are in their forties these days because the length of time they’ll have to save for a deposit.
But it is also often the areas in the country with the fiercest anti- development view that have the greatest need for affordable housing and I’m not sure that these initiatives alone will deal with this.
Older homes around the country are often in need of some repair and updating but still essentially sound. But these too are also out of the reach of first time buyers. Average house prices have doubled in the last 10 years all over the country. We need to see some help to improve and sell older homes, often in established communities, with similar mortgage incentives as well.
Another welcome proposal – but the detail is not there yet – is the “Get Britain Building” investment fund. This is set to provide £400million to bridge a gap in funding on shovel-ready schemes that are currently stalled. We presume to aid typically small and medium sized builders on housing schemes which have planning permission.
In The Housing Forum’s regional roundtable discussions, which we carry out in local housing markets all over the country, getting building finance was a critical issue which had now been recognised. The plan, I believe, is to operate a “revolving fund “so once building and sales start happening, the loan is repaid back to the fund. It can then be re-used again to support other stalled sites. All in all good news.
The Housing Forum has pointed out that despite these welcome actions, the Government has effectively abandoned housing targets. It seems we can count the number of homes needed but not how many we collectively as a country will be providing. We need to know if the industry and the Government are succeeding and without making some commitment to numbers we have no way of knowing this.
