Now it's our turn

The current housing market downturn has proved that the house builder model is driven by rising land and property values.

When demand is less than supply, house builders will attempt to offload stock and contract supply. Perfectly understandable. But this doesn’t help produce new homes. In an upturn the private sector comes into its own, in a downturn relying on the private sector is not enough.

It is at times like this that the public sector must show leadership. If it does not, it will fail those who need an affordable home to rent or buy.

The public sector should do three things. First, help to maintain supply through existing routes: house builders, contractors, commercial institutions, housing associations and procurement clubs.

The Housing Corporation recently announced the £200 million surplus stock initiative and the use of
£100 million for new build Homebuy homes. We also hope to generate proposals for intermediate rents.

Second, the public sector should intervene where the private sector is failing to act: acquiring land, bringing it to market, getting it built out, being sensible about price and helping to bring back confidence and demand. This approach can be accelerated with the creation of the Homes and Communities Agency.

Third, prepare for upturn. That will bring fresh challenges – of capacity, skills and finance – and will require a new partnership between the public and private sectors.

The public sector must grasp the challenge. If it does not, it will fail the many people on waiting lists who need affordable homes to rent and the young and first-time buyers who still cannot afford to buy. 

Steve Douglas is chief executive of the Housing Corporation