British Prime Minister Theresa May is the first leader of the country in decades to announce that a new generation of council houses will be built to help tackle the nation’s housing crisis.
In her speech at the Conservative Party Conference in Manchester she announced an extra £2 billion for affordable social homes with councils and housing associations able to bid for a share of the cash.
May pledged that the homes that will be built will be available to rent well below market level and that she would ‘take personal charge’ of ‘getting back into the business of building houses’.
She said that the money will be used to create creating ‘a new generation of council houses to help fix our broken housing market’ and she told house builders that the Government will ensure that land is available for homes. In return she told builders that they, in return, ‘must do your duty to Britain and build the homes our country needs’.
David Orr, chief executive of the National Housing Federation (NHF), described the announcement as a watershed moment for the nation. The Prime Minister said that we as a nation have not paid enough attention to social housing. Today, she is right to make a bold break with the past and commit to building the homes we need most, genuinely affordable homes for those on the lowest incomes,’ he said.
‘The additional £2 billion will make a real difference to those let down by a broken housing market. Building homes for social rent will make work pay and help bring down the housing benefit bill in the long run by moving people out of costly private lets,’ he pointed out.
He explained that housing associations have been unequivocal about their ambition to deliver the homes the nation needs, be that homes to rent or homes to buy. ‘Improved access to finance and land will see housing associations able to unleash their full potential, building on the 48,000 homes they started last year,’ he added.
‘Building with housing associations represents excellent value for taxpayer money; for every £1 the Government puts in, housing associations raise a further £6. We are ready to work with the Government to deliver a new generation of genuinely affordable, high quality homes for rent,’ he concluded.
Andy Sommerville, director of Search Acumen, pointed out that for decades successive governments have neglected the critical issue of the nation’s housing shortfall.
‘Theresa May’s pledge to invest an extra £2 billion in affordable housing is the first building block to making up for years of under supply and we can only hope that this is not simply another empty promise to fix our broken housing market,’ he said.
‘Now that our leaders share the industry’s sense of urgency, we must act to build more homes and we must act quickly. The gulf between supply and demand is widening each day. For the property and construction industry, this is the cue for Britain to start building,’ he added.
According to Jeremy Raj, head of residential property in London for Irwin Mitchell Private Wealth (IMPW), the plan will only really work if it is combined with repeal of the Right to Buy legislation that has effectively decimated council housing stock since its introduction, and will continue to do so. ‘The fact that councils could have their best stock taken away from them at a discount under the legislation meant that effective planning and management has become impossible,’ he said.
‘It is clear that punitive increases in the tax regime and browbeating of the house building industry by successive Housing Ministers was never going to have the desired effect. To be fit for purpose, the sector requires a carefully considered blend of public and private sector activity with provision for age appropriate stock plus strong rental and buy to let markets to complement the home ownership, council housing and housing association models,’ he explained.
Jeremy Duncombe, director of the Legal & General Mortgage Club, said that anything that is designed to help the housing crisis should be welcomed. ‘Focusing on speeding up the planning process is a good start, but these plans need to be followed with a real commitment if they are to have any impact,’ he pointed out.
‘The undersupply of housing in this country continues to put serious pressure on prices and affordability across the market. A pledge to build affordable homes, whatever the tenure, can only help the solution,’ he added.
