Beyond the good news on new homes

Originally posted on my blog for Inside Housing on November 14.

There was good news and bad news for the government in a new housing statistics out this week that illustrate the scale of the issues it still needs to address.

The good news is that housebuilding in England is up again: there were 241,000 net additional dwellings in 2018/19, an increase of 9% in the last 12 months and 93% in the last six years.

Net additional dwellings make up the government’s preferred measure of housing output and add together new build completions, conversions and change of use less demolitions.

That total is not just higher than at the previous peak of output before the financial crisis and credit crunch – it is also the highest total recorded since the government started collecting the data in this way in 1991/92.

Significantly, for the first time total net additions are higher than the 240,000 a year target that the last Labour government set in the wake of Kate Barker’s landmark review of housing supply in 2004

True, the big increase over the last six years also reflects just how low output had sunk in the wake of the credit crunch, and true a housing market downturn and recession in the building industry could yet derail progress.

However, with more recent council tax data indicating that annual output may now be over 250,000, the government’s target of 300,000 new homes a year by the mid-2020s no longer looks completely outlandish.

Indeed, a separate report from the Home Builders Federation (HBF) estimates that planning permissions were issued for 380,000 new homes in England in the year to June.

Housing secretary Robert Jenrick was quick to welcome the figures and make a campaigning point for the general election:

One more bit of good news is that the bulk of the net additions came from new build completions (213,660) rather than conversions of questionable quality (14,107 were delivered via permitted development, which was only a slight increase on 2017/18).

However, focussing purely on how many new homes were delivered does not tell us much about how the government is doing on other housing issues.

For starters, how many of the new homes delivered in the last few years are in blocks with flammable cladding that have left residents living in fear and leaseholders unable to remortgage or sell their homes?

The latest statistics on the remediation of blocks with aluminium composite material (ACM) cladding make for more grim reading.

Work was only completed on four blocks in October taking the total remediated to 118 – but there are still 318 buildings that are yet to be remediated.

In the social sector work has been completed on 61 out of 159 blocks but there are still 15 where work has not even started.

In the private residential sector, remediation has only been finished on 15 out of 184 blocks and has not started on 144.

Incredibly, some 28 months after Grenfell, there are even still 11 private residential buildings where ‘the cladding status is still to be confirmed’.

That is a reminder if any were needed of the problems facing blocks with other types of cladding that have yet to be addressed.

Labour’s shadow housing secretary John Healey was quick to make a campaigning point of his own on this issue:

To fire safety, add affordability and homes for those who are most in need..

Separate statistics on affordable housing supply are due out next week but it’s figures buried in the data on local authority revenue expenditure that really give pause for thought here.

Because the welcome increase in net additional dwellings was mirrored by a soaring bill for homeless families in temporary accommodation.

Analysis of the data by Shelter shows that local authorities in England spent £1.1 bn in 2018/19, an increase of 9% on last year and 78% in the last five years.

Almost a third of that – £344m – went on bed and breakfast and that total has more than doubled in the last five years.

And of that total spending on temporary accommodation, local authorities had to find £280m from their own resources. That figure too has more than doubled in the last five years.

In another illustration of the scale of the problem, councillors in Enfield heard this week that one of the borough’s residents has been in ‘temporary’ accommodation for 21 years.

So three cheers for the rise in net additional dwellings is very welcome news but nobody should get carried away.