AS2013: Lukewarm response to 'tame' housing measures
Industry bodies have welcomed steps towards increasing housing supply in today’s autumn statement, but warned the ‘tame’ package does not go far enough.
Chancellor George Osborne this morning announced council borrowing caps would be lifted by £300 million to drive the delivery of 10,000 new homes.
This would also be funded through the sale of high value vacant council stock, and include measures to expand right to buy.
A £1 billion loan package to provide infrastructure to unlock housing developments could deliver a further 27,000 homes, while the chancellor also pledged to ‘explore’ repayable loans for estate regeneration.
A £40 million increase in discretionary housing payments – emergency funds for those impacted by welfare reform – in both 2014/15 and 2015/16 was also announced.
The Chartered Institute of Housing has called the steps ‘far too modest’ and warned any gains could be offset through boosting right to buy sales and selling off expensive council homes.
The Royal Institute of Chartered Surveyors said the government ‘simply must’ extend its commitment to house building, and said the borrowing increases would only make a ‘very minor dent’ in the supply needed, while the Local Government Association said raising the caps provided a ‘glimmer of hope’ but did not go as far as they would like.
The chancellor also announced an annual cap on overall welfare expenditure, including the vast majority of housing benefit, capital gains tax for foreign homebuyers and a package of planning reforms aimed at speeding up the system.
Grainia Long, chief executive of the Chartered Institute of Housing, said: ‘The steps announced today are far too modest and there is a risk that any gains could be offset by the requirement to sell high-value social housing and the expansion of right to buy.
‘As George Osborne acknowledged, we need to build more homes – we are in the grip of a housing crisis, with millions of people being denied access to a decent home at a price they can afford.’
David Orr, chief executive of the National Housing Federation, said: ‘Allowing local authorities to use their assets to raise additional finance will help provide much needed local investment in new homes. We also welcome the expectation that delivery will be achieved through closer partnerships between local authorities and housing associations.
‘While £300 million is a modest step in the right direction and could provide a much needed short-term boost to housing supply, the 10,000 new affordable homes it aims to deliver must not undermined by the disposal of high-value stock and increased right to buy sales.’
Mike Jones, chair of the Local Government Association’s environment and housing board, said: ‘This is an important first step towards untying the hands of local authorities to build the new social housing which millions on housing waiting lists desperately need. While today’s announcement does not go as far as we would like it to, it demonstrates that councils have been listened to… This will provide a glimmer of hope to people facing lengthy waits for a council home.’
Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors, said: ‘The lack of housing supply is crippling the property market. If help to buy is to remain, right to buy extended, and expensive social housing sold off then the government’s commitment to building houses simply must be extended.
‘The £ 1 billion of loans to unblock housing development across the country will contribute towards housing need and will drive construction jobs. However, we still believe housing is not at the centre of a coordinated property-led growth that supports a balanced regional recovery where all can access the market. The increase in the HRA borrowing cap will only make a very minor dent in the housing deficit.’
John Cridland, director general of the Confederation of British Industry, said: ‘House building is critical to a sustainable recovery so the Office for Budget Responsibility concerns about weakness in supply must be addressed. £1 billion of loans to unblock large housing developments is good news, while more lenders getting involved in help to buy will benefit people trying to get on the housing ladder. But the Government still needs to do more to free up public sector land for development to build more homes.
‘This week’s national infrastructure plan gave us more detail on the timescales and financing of projects, but it still feels like a very long and hopeful Christmas list, rather than a true set of priorities.’
Mark Henderson, chief executive of 55,000-home landlord Home Group, said: ‘It’s extremely positive to see housing on the agenda in the autumn statement and the measures announced should make a positive impact on the number of units delivered. However, taken as a collective these measures are far too tame to have any genuine impact.’
Rob Beiley, housing and regeneration partner at solicitors Trowers & Hamlins, said: ‘Local authorities will broadly welcome the additional £300 million of borrowing capacity to build new homes. The current housing debt cap is a real barrier to more significant investment in affordable housing.’
Sir Steve Bullock, London Councils’ executive member for housing, said: ‘By 2021, over 800,000 new homes will need to be built in London, but the government’s latest attempt to address this crisis through increasing council borrowing capacity does not go far enough and has too many strings attached.
‘In order to qualify for extra borrowing capacity, councils will have to sell off high value vacant housing stock. This unfairly prejudices London, which has both the most acute housing need and the highest value stock in the country.’
Richard Ford, head of planning at Pinsent Masons, said: ‘The announcement that the government will fund infrastructure to unlock large housing sites, increase local authority HRA borrowing limits for affordable homes, and encourage the sale of vacant high-value social housing is vey welcome. LEPs will benefit from additional funds on infrastructure, particularly for garden cities, and the push for local authorities to deliver more of its own affordable housing is gathering further pace. The government is going in the right direction in this area.’