6 May 2008 11:14
EVER since Thursday's election the airwaves have been full of government ministers admitting mistakes, feeling our pain and listening to our problems. But there was not much evidence of any of that as housing minister Caroline Flint dead-batted away questions about the government's policy on new homes on the BBC yesterday.
The effects of the credit crunch on social housing at last made it into the national media in a report on yesterday's PM Programme - go here for the story or here to listen again (from about 15 minutes in). Tom Dacey, chief executive of the Southern Housing Group, said on the programme that five out of seven lenders to social housing were taking on no new business.
And Matthew Wyles, executive director of non-retail at the Nationwide, said the shortage of funds had forced the building society to concentrate on what it was set up to do - lending to home buyers. 'At a time when we have to make hard choices, it's our core mortgage borrowers that will come first in our queue,' he said.
Toss into the mix a report by the Local Government Association that the economic slowdown and credit crunch could mean 2m households on waiting lists by 2010 and the effect of reductions in private sector starts on both the government's 3m homes by 2020 target and the section 106 programme and you have serious problems in the making.
Flint's reaction was to be 'a little bit surprised'. The government had already committed £8.4bn to social housing over the next three years while the Housing Corporation had already identified the £10bn in private finance needed to support it. While it was keeping a very close eye on the situation, it was acting to improve liquidity in the mortgage market and in the long term it was committed to the 3m homes target.
Her long-term forecast was that high employment and low interest rates will underpin the housing targets. 'We're making sure that when the market picks up - and it will pick up - we are in a position to hit the ground running.'
Flint may be right of course. The credit crunch may turn out to be a temporary blip and the market will return to normal - along with the opinion polls perhaps.
If she's wrong, though, all bets are off. Not just for the housing market, not just for the 3m homes target but for the many of the assumptions underpinning housing policy. Not least, following Thursday's election results, which party will be running it at the end of the current affordable housing programme in 2011. And what, following Boris's victory in London and the scrapping of Ken's 50% affordable homes target, will follow it.
Posted by Jules Birch, May 6
Posted in Finance, Local government, Social housing, Housebuilding