Briefing explores barriers to house building in West Midlands
A breakfast briefing hosted by CIH's West Midlands Board heard from Gavin Smart, CIH deputy chief executive and Roy Irwin, strategic policy advisor with Mears and former chief inspector for the Audit Commission, housing association CEO and local authority director
What are the barriers to growth and how do we make sure the Midlands is leading the charge in housebuilding? How can we collaborate and innovate further to tackle the continuing housing crisis? What support do we need from Government and how do we work together to secure this?
A fundamental part of addressing our national housing crisis must be doing everything we can to maximise the numbers of new homes we build.
That is true as much in the West Midlands as it is anywhere else in the country.
None of us can do this on our own – it will require organisations of every type and every size.
The challenge is not only about responding to newly arising need, but also addressing the backlog of housing need and how homes coming to the end of their useful life at replaced.
Consider the size of the challenge – at least 250,000 new homes a year UK are needed (and more likely 300,000 if we are to deal with both newly arising need and the backlog of unmet need – and that’s without thinking about stock replacement).
Currently around 170,000 a year are being built, according to Net Additions to Stock data – the most complete and the most generous measure of housing supply.
What is Government doing?
Of course, Government plays a key role in responding to this challenge. So what is it doing?
Affordable housing programmes £4.7bn focused strongly on low cost home ownership (135,000 homes to 2020) with some rent to buy and supported housing.
Also £2.3bn for the remediation of brownfield land for starter homes and plans for 200,000 ‘starter homes’ at 20% discount to the market.
CIH has made the case for more investment in LCHO so supports this – although we didn’t advocate funding LCHO at the expense of affordable homes for rent.
Overall around £45bn of investment announced since the election £43bn has been in support of home ownership and predominantly in the form of demand side rather than supply side support.
The recent announcement of £3bn to invest in housing was mostly a re-announcement, but about £1bn was new money in the form of short and medium term loans targeted at SME builders.
Also build to rent guarantee fund aims to increase institutional PRS new supply in the longer run.
There is clear indication that Government understands the size of the crisis and the scale of what needs to be done.
Housing supply numbers have risen and planning reform has seen a big increase in the number of sites with planning permissions in place and available for building.
But with supply stuck stubbornly under 200,000 a year there is still a lot to do.
What are the limitations?
The Government’s programme is far too focused on home ownership – this is not a good match with the distribution of need and households in local areas.
86% of households express an aspiration to be home owner, though home ownership is currently at around 63% in England (down from a peak of 69% in 2004), and is considerably lower for younger people
A better balance between tenures is needed, with greater support for providing new homes to rent, including homes at sub-market rents, specifically new homes at social rents.
Some measures are inevitably slow burning – for example build for institutional rent – so we need to think more about what to do in the meantime.
What does CIH think?
CIH has a very clear views about what the Government should do.
In both our document on maintaining housing supply which we released immediately after the Euro referendum and in our submission to the Autumn statement (both on our website), we call for:
Re-shaped affordable homes programme – greater flexibility to housing associations to fund the mix of products (including sub-market rented homes) that work on a particular site at a particular time.
Reshaped HRA programme – local authorities have the potential to play a much greater role in the provision of new homes – directly or indirectly.
Restart affordable housing guarantee programme – which ran for three years to March 2016. £2.5bn guarantees led to 27,000 new homes. and enabled better access to finance and better rates – stretching investment.
Regeneration – expand the existing regeneration loan funding scheme of £140m by another £300m. Plus look to make available some public investment as well as loans and guarantees.
UPDATE – At the Autumn statement the Chancellor made a number of housing related announcements including:
An additional £1.4bn of funding for the Affordable Housing Programme to fund an additional 40,000 new homes
Greater flexibility for providers funded via the AHP to adjust the mix of types of homes on a site to respond to its particular characteristics and also a recognition that affordable housing for renting remains an important part of the mix
A £2.4bn Housing Infrastructure Fund to help fund infrastructure that unlock sites for new housing
CIH welcomed these announcements as an important step forward although we noted that there is still more that needs to be done. CIH’s response and our member briefing on the Autumn Statement can be found here.
Finally, genuine partnership is needed.
Not a parent/child relationship but one of mutual respect and trust, and opportunities to refresh arrangements, to innovate and jointly produce positive outcomes for all parties over a lengthy period of time.
There is a lot to be done and a lot can be achieved but this should be seen as normal business, which does not need to wait for – or have a dependency on – Government.
Of course Government can and does help, but we need to move to where the Government’s contribution is the icing on the cake and not the cake itself.
Questions to consider
Do you/your organisation really need to be the lead on everything in every partnership?
Could you be a more effective partner by allowing others to lead on some things?
Would it make it feel less like you a trying to take over everything and more like a real partnership?