Prime Minister Theresa May yesterday announced a £2bn housing pledge to get “the Government back into the business of building houses”, but industry leaders have said “it’s about time” she “set aside a significant pot of money to do so”.
In her speech on the final day of the Conservative Party conference, May said that a new generation of council houses would be a priority, and she would “dedicate my premiership to fixing this problem”.
Affordable housing includes social rent, affordable rent, affordable homes to buy and shared ownership, and both social and affordable housing are allocated on the basis of need.
May admitted that “for 30 or 40 years, we simply haven’t built enough homes. The average home now costs almost eight times average earnings and that’s been a disaster for young people in particular.”
She said that the £2bn additional funding will take the Government’s affordable housing budget to almost £9bn, and lauded the Chancellor’s commitment earlier in the week to release a further £10bn for help to buy equity schemes.
May insisted the Government will allow “homes to be built for social rent well below market level” in order to get “back into the business of building homes and a new generation of council houses.”
She added that she will “encourage” councils and housing associations to bid for the money, but it is unclear if any of the money will go on private rented housing too.
The Conservative Party said the £2bn will fund 25,000 homes for social rent over two years from 2019, but the Labour Party has since claimed out that in the final year of the last Labour Government it spent £3.75bn, nearly double what May announced.
In 2015, the Conservatives under Cameron’s leadership promised to build a million more homes of all types by 2020, the equivalent of 200,000 each year, but have fallen behind on, with 168,350 homes built in the year to March 2016. Of this, 32,110 were affordable, the lowest recorded in 24 years according to figures from the Department for Communities & Local Government.
May’s announcement came after Secretary of State for Communities & Local Government Sajid Javid admitted during a fringe event that: “We have the worst affordability [of housing] of any major country. It is a national outrage.”
Trafford Housing Trust
In partnership with L&Q Developers, Trafford Housing Trust is aiming to build at least 2,000 new homes across the North West over the next four years, with 50% being affordable.
Matthew Gardiner, chief executive of THT, said that many families had been left with “only the expensive, insecure and poor-quality offer of much of the private rented sector”.
He added: “Successive Governments have ignored the fact that a well-functioning housing market needs the underpinning of a modern and adequate social housing element. By bringing social housing to the centre of housing strategy, the prospects for these families are significantly improved.”
National Landlords Association
Richard Lambert, chief executive officer, agreed. He said: “The majority of landlords would agree that more social housing should be built, and it’s about time that the Prime Minister set aside a significant pot of money to do so.
“The announcement should relieve the pressure on the private sector, and choke off the breeding-ground for the minority of rogues and criminals who get away with providing substandard housing and neglecting their tenants.”
Federation of Master Builders
Brian Berry, chief executive, said: “The plan is an opportunity to help shape a stronger local housebuilding industry. If councils can start to engage with smaller, local builders to deliver this new generation of council housing, it could further help to diversify the industry. This would boost the capacity of the private sector through the provision of more public sector work. Indeed, the increased use of small and medium-sized building firms will limit the problem of land banking, as this is something small builders simply don’t do.”
Berry expressed concerns, though, on Brexit. He said: “There do remain some significant roadblocks to the Prime Minister’s vision. Following Brexit, the serious shortage of skilled labour the construction industry is already dealing with will be exacerbated if it becomes more difficult for EU tradespeople to move to and work in the UK. The Government must be mindful and realistic about the continuing need there will be for skilled EU workers as it puts in place its post-Brexit immigration policy.”
Managing director Jonathan Goring said: “We support the announcement and believe more flexible and creative use of public land, as well as more widespread use of modern construction techniques, have a crucial role to play in getting more homes built, delivering them more quickly and helping more people to attain the homes they desperately want.”
Colin Savage, senior consultant, said: “We welcome the Government’s aspirations to build a new generation of council housing. This now creates a unique opportunity to ensure quantity is not at the expense of quality and should provide modern sustainable homes and communities.
“The country has experienced successive government policies which have failed to deliver the needs due to the more-for-less policy of the 1990s, highly regulated standards in the 2000s, and quality standards being stripped back under current legislation.
“Schemes need to be sustainable, place-making communities which address the diverse residential and cultural needs from first-time buyers, families, ageing population.”