A Statement Of Intent
So building new homes was a priority area for the Chancellor in last week’s autumn statement, with funding announced for tens of thousands of new affordable homes, the creation of a £2.3 billion Housing Infrastructure Fund, and confirmation of a £3 billion Home Building Fund, all with the aim of accelerating the rate at which new homes are built to help solve the UK’s chronic housing shortage, writes Tony Abel.
The devil of course will be in the detail, but at first glance this all seems rather more constructive than some of the mudslinging which has come from politicians over the past months on this subject. Communities Secretary Sajid Javid has rather sneeringly accused developers of ‘landbanking’ (not bringing forward sites which have planning permission), saying, “People can’t live in a planning permission.”
I have news for Mr Javid: house builders can’t survive and pay their staff on planning permissions either. We need to build, and sell, houses to do that. There are many reasons why a given site might not see construction start the day after planning consent is granted - environmental, highways, utilities, drainage or simply the availability of development finance - but it is rarely by choice.
The autumn statement struck a welcome, more collaborative tone. The Home Building Fund recognises that smaller house builders especially can sometimes find it a challenge to raise the capital to bring a site forward. The Infrastructure Fund will help fast-forward the necessary infrastructure to enable developers to increase the pace of construction.
The increase in funding for affordable homes will also make it easier to fulfil Section 106 agreements, with more housing associations able to take up allocations of affordable houses built by private-sector builders – although I should point out that this measure is pretty much simply replacing money which was taken away from the affordable housing sector by government last year.
The bottom line is that there is still a huge mismatch between supply and demand of housing. The number of people needing homes is not going to diminish any time soon, so the only answer is to increase the supply of housing, and that means building more new homes. Amongst the doom and gloom predictions contained in the autumn statement about the wider economy, the measures that Mr Hammond introduced to help that happen were a beacon of good news.
At last there appears to be a glimpse of long-term thinking creeping into government policy. Building new homes is not an instant activity, and to commit resources to doing so needs an environment of stability and sustainability – rapid short-term growth is inevitably followed by rapid contraction, and that is good for no-one – house builders, people who need homes, or the wider economy.
The housing shortage cannot be solved by government alone, nor by the private sector. Only by working together can we start to move towards the happy position where everyone who needs a home has one.