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.
Originally published on October 1 on my blog for Inside Housing.
The first two days of the Conservative Party conference make this look like a government that is scraping the barrel for ideas.
Boris Johnson might still have a surprise in store on Wednesday but speeches by housing secretary Robert Jenrick and housing minister Esther McVey were underwhelming at best while chancellor Sajid Javid did not even mention housing in his check-the-small-print bonanza of infrastructure investment.
Jenrick’s big new idea of a right to shared ownership for housing association tenants is not that big and not that new either but it could still have a damaging impact on people who need an affordable home.
Originally published on August 28 on my blog for Inside Housing.
The emphasis is firmly on home ownership in plans widely reported this morning to make it easier for shared owners to buy an increased share in their homes.
The government will consult on plans to make it easier to staircase up by allowing them to buy an extra 1% at a time rather than the current 10%.
That may be attractive to some shared owners but it will do very little to tackle other longstanding problems with the tenure – rising service charges, repair bills, problems selling – and the government will have to find a way to stop transaction costs such as mortgage fees and surveys making it unaffordable.
This isn’t a new idea for shared ownership – Thames Valley already has a scheme called Shared Ownership Plus that allows people to buy an extra 1% of their home each year without paying those extra costs.
However, in terms of a big idea to fix the housing crisis it is hard to disagree with the Labour verdict that this is ‘tinkering’.
At the same time the government will make it easier for people buying under Help to Buy to take out a mortgage that runs for 35 years rather than the current 25.
That is in line with developments elsewhere in the mortgage market and it will reduce monthly repayments but it could lead to increased prices and will cost more in the long run.
However, it seems clear that these could be just the first in a series of measures aimed at boosting home ownership.
Writing in the Times this morning, housing secretary Robert Jenrick hints at more more radical plans to revive what he sees as the ‘moral mission’ of a property owning democracy.
Part of that could be a ‘homes for locals’ scheme:
‘I want local young people, whether growing up in Cornwall or Cumbria, to be able to stay in their communities and build a family where they feel at home. It’s not right that people on low incomes risk being forced out, and I will be tackling this challenge head on. And to get Britain building, I want communities to feel that new housing brings real benefits to local people. What a difference it might make to the planning system if existing residents knew that a good proportion of new homes would be sold at discounted prices to people from that area trying to get on a foot on the ladder.’
The Times reports that ministers are considering a scheme to give first-time buyers a 20% discount to buy in the area where they grew up with the cost to be ‘borne by developers’.
It sounds like a revival of David Cameron’s starter homes plan and it will raise exactly the same issues plus some new ones.
What happens to the discount? Will it remain in perpetuity or be pocketed by the first buyer?
Who really bears the costs? As things stand, the developer will simply cut its other planning contributions, making the discounted homes a ‘cuckoo in the nest’ as people who need other forms of affordable housing will lose out.
And how will they decide whether someone is a local – some people grow up in one place, but many others move around a lot before their 20s and 30s.
All of these ideas sound like gimmicks that will not change very much but this is all about sending out the right signals ahead of the election that everyone assumes is coming, whether or not the government’s plan to suspend parliament until a new Queen’s Speech on October 14 goes through.
Preparations for an election are already underway, with departmental special advisors told to draw up plans for their sections of the next Tory manifesto.
It seems unlikely, therefore, that the Ministry of Housing Communities and Local Government would use up its best (or worst) ideas at this stage.
So what price a rehash of the failed manifesto from 2015 and a lurch back to the ownership-at-all-costs agenda of David Cameron and George Osborne?
First, though, there is the small matter of the spending review for next year that chancellor Sajid Javid has just announced will be next Wednesday (September 4).
The prospects for housing are already looking ominous ahead of that. Writing in The Telegraph, the chancellor singles out Brexit preparations, the NHS and education as his priorities but warns that spending departments cannot expect a blank cheque.
According to the Financial Times:
‘While the spending review will be billed as an “end to austerity” for schools, hospitals and the police, other departments will face a continued squeeze. Housing and defence are among those likely to face a tough settlement.’