The future looks bleak for housing

We are still in the lull before the storm as the Homes and Communities Agency’s money is being spent throughout the country, developers have had a large bailout (no wonder their share prices have stabilised recently) and housing associations are still building a reasonable number of new homes.

However, looking ahead to the next couple of years, irrespective of the nature of the new government, we are facing public sector cuts not seen for a generation.

The main form of housing delivery in this country was funded by financial institutions financing a high percentage of new house building and they then lent individuals mortgages to buy their properties - a wonderful financial circle when the market is buoyant. Housing associations and English Partnerships started to get on the (profits/surplus/cross subsidy) bandwagon as it was impossible not to make money when the market was so strong. Local authorities were able to negotiate around 40 per cent affordable housing (subsidised by the landowner/developer) as well as a range of community goodies - highway improvements, school buildings, open space, play areas - through section 106 agreements.

We are all hoping that the recession will be a minor blip and we’ll be out of it soon. My view is that we won’t be for a long time to come and that we in housing need to brace ourselves for one of the most difficult challenges any of us has had to face. There’s no money; financial institutions will start to get back to basics and won’t be lending speculatively in the foreseeable future. Public sector cuts will be harsh, the HCA’s budget will be reduced and it will need to compensate for the loss of section 106 sites.

The Council of Mortgage Lenders director general summed it up nicely: ‘At the moment we cannot see how to square the circle between increasing demand for housing, constraints on the necessary finance to deliver it, the repayment of £300 billion of lending support between 2011 and 2014, and reductions in public spending as the fiscal deficit is addressed.’

It appears to me that we are in serious trouble. The finance isn’t going to be there and consequently people in housing need from around 2012 onwards may not have their needs met.

Desperate times call for desperate measures - my plea would be to those in the sector earning more than £100,000 to step forward and show leadership in the coming months/years to offer us some hope and new ideas.

I don’t want to contemplate what will happen if we don’t find some new ideas and I look forward to the day when the glass is half full again.

Andrew Fiske, head of strategic housing, Fareham Council