23 Oct 2017

Gloves are off for housing as Conservatives muster prior to Autumn budget

Gloves are off for housing as Conservatives muster prior to Autumn budget

In preparation for an Autumn budget that will endear the Conservative party to a younger generation excluded from housing, the Government has been involved in a flurry of activity to address the housing crisis.

In mid October Prime Minister Theresa May summoned major house builders, housing associations and local government representatives to Downing Street to discuss plans to increase housing supply. (See below for a list of attendees.)

The meeting focused on what May referred to as a step change in the delivery of new homes, although disappointingly, no custom or self-build representative was included to ensure the sector was part of the agenda for change.

On a more positive note, modern methods of construction and SME builders were all discussed as part of the mix for reinvigorating housing, and those in attendance had the opportunity to set out their ideas for change and highlight barriers to growth.

Following the event, Communities Secretary Sajid Javid MP appeared on the Andrew Marr Show, to further demonstrate the Conservative’s commitment to the housing challenge.

“What’s really going to make the difference is we need a big increase in all types of home, including regular unsubsidised homes,” said Javid, in response to Marr’s allegation that the housing crisis came to fruition on the Conservative’s watch.

Borrow to invest

Crucially, Javid stated that we should be borrowing  to invest in new homes and infrastructure, hinting that this may be included in the upcoming budget. This would signify a change in the Government’s attitude to austerity.

“…we’re using everything we have available to deal with this housing crisis. Where that means, for example, that we can sensibly borrow more to invest in the infrastructure that leads to more housing, take advantage of some of the record low interest rates that we have, I think we should absolutely be considering that.”

The news also came on the back of Government confirmation that it was preparing to review the house buying process in England, to streamline it and make it less costly and less stressful, with a particular focus on gazumping.

These measures could be a strategy to speed up transactions for those already in the housing market, potentially making it easier for them to move on and free up housing stock that’s more suitable for other people, such as family homes with empty nesters still occupying them.

Government also recently announced it would further support Help to Buy with an additional £10 billion, another measure to shore up the housing market. However this came under wide criticism for artificially bolstering house prices, including from both Shelter and the Adam Smith Institute.

 Attendees at Downing Street meeting
  • Rt Hon Sajid Javid MP, Secretary of State for Communities and Local Government
  • Alok Sharma, Minister of State for Housing and Planning
  • Melanie Dawes, Permanent Secretary of the Department for Communities and Local Government
  • Paul Hackett, Chair of g15, CEO of Optivo
  • Chris Carr, Carr & Carr
  • Muhammad A Bhatti, Managing Director of Apex Airspace
  • Nigel Hugill, Chief Executive of Urban & Civic PLC
  • Mark Lloyd, Chief Executive of Local Government Association
  • Robert Luck, Chief Executive of Top Hat
  • David Montague, Chief Executive of London & Quadrant Housing Trust
  • Peter Andrew, Deputy Chairman of Home Builders Federation
  • David Orr, Chief Executive of National Housing Federation
  • Peter Redfern, CEO of Taylor Wimpey
  • David Thomas, CEO of Barratt Developments
  • Nigel Wilson, Chief Executive of Legal and General
  • Lord Porter of Spalding CBE, Chair of the Local Government Association
  • Terrie Alafat, Chief Executive of Chartered Institute of Housing
  • Peter Connolly, Chief Executive of Igloo
  • Angus Dodd, Chief Executive of Quintain
  • Tracy Harrison, Deputy Chief Executive of Northern Housing Consortium
  • Josh Murray, Group Director of Corporate Affairs at Laing O’Rourke
Credit: https://creativecommons.org/licenses/by/2.0/ Arno Mikkor


Editor’s comment

Inviting volume house builders, who build to a highly-profitable formula, to a meeting about reinventing housing is questionable. It’s like the Revolutionaries in Russia consulting the aristocrats about the future of the new state.

But seriously, while volume builders are a very real part of the equation for getting more homes built, they themselves have little to benefit from a changed system. Many are already posting record year-on-year annual growth figures – so they’re doing quite well out of the deal already.

The focus for change must be on the planning system that can be used to bring about change and increased housing, and with this move an increase in more diverse approaches to housing supply. Part of this must be increases in community-led projects, custom build and greater opportunities for housing associations to build truly affordable homes.

In addition, money must also be freed up to enable people to build both homes and infrastructure. Perhaps Philip Hammond’s budget will back Javid’s ideas and be the catalyst for change.

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