Theresa May has indicated that she is acutely aware of the need to build more homes and that policies focusing on addressing demand are not enough to solve the housing crisis. In her speech to the Conservative Party Conference, she noted that, while measures introduced by the previous administration to promote homeownership were the right things to do, “we simply need to build more homes”.
One thing that Mrs. May certainly seems keen on, somewhat in contrast to her predecessor, is long term investment of Government funding. Signalling a push on supply-side policies and a willingness to spend, she used her speech to suggest that using public sector land for more and faster housebuilding, and encouraging newer technologies (such as off-site construction facilities) to help get houses built faster, will become be a priority for investment.
The Prime Minister was no doubt referring to the £2bn Accelerated Construction programme which will see the government, via the HCA, take on the role of developer and work with contractors to create new, efficient, off-site models of building. Ministers are hoping that this will result in 15,000 new homes by 2020.
£3 billion housing fund
Philip Hammond, the new Chancellor, is expected to include measures to help smaller house builders in his Autumn Statement (Wednesday 23rd November), including a substantial £3 billion Home Building Fund. It has been suggested that part of the reason behind this fund is to prevent a further slump in development following the EU referendum. It is, however, a re-announcement of an earlier policy which never became reality, thanks to the pre-referendum purdah.
Part of this fund is in fact a combination of a number of existing, although not yet full allocated, funds but it does include over a billion pounds of new loan finance. Approximately a third of the £3 billion will be targeted directly towards SME developers by providing cheap loans and financial guarantees which will be distributed via the Homes & Communities Agency. Communities Secretary, Sajid Javid, hopes that this fund will result in the construction of between 160,000 and 200,000 homes – a substantial figure, but still a fifth of the one million homes the Government has previously committed to by 2020.
New Minister, new approach?
We have a new Housing Minister, Gavin Barwell, and the reaction to his speech at the National Housing Federation Conference in September was warm, if cautious. The fresh-faced Housing Minister (it is his first ministerial post) has dropped a number of hints that he will be considering changing the Government’s approach for funding new “affordable” homes.
Indications include that the Shared Ownership and Affordable Homes Programme could include funds for sub-market rent and the definition of Starter Homes could be broadened to include other types of low-cost homeownership, such as rent-to-buy. He has publicly said he wants more homes of all tenures.
As much as this has boosted optimism within the sector, the Minister did also tell the Tory Conference that the Labour plan to build at least 500,000 council homes would increase inequality. Mr. Barwell may not have joined the ‘Homes for Cathy’ bandwagon quite yet.
Respect the Green Belt
Finally, in a significant shift in tone from the Cameron Government, the new Prime Minister has said she will ensure that housing is not built on protected countryside except for in “very special circumstances”. In line with this statement, Ministers have also promised a package of measures to encourage brownfield development and urban regeneration.
Cautious optimism then around the development of new homes and the softening of the home ownership rhetoric, but we are yet to learn the new leadership’s thinking on more pressing issues for housing providers. The Chancellor’s first Autumn Statement will be one to watch. That date for you again — Wednesday 23rd November, watch this space!
Iain Turner is Campbell Tickell’s Policy and Research Officer. For more information or to discuss this article, please contact: iain@campbelltickell.com
