Action at last in UK housing, but things need to be speeded up
It has been a whirlwind, the announcements have been coming fast and furious for housing in the UK and the push for more affordable homes to be built has been generously welcomed.
The plans announced by Prime Minister Theresa May and Communities Minister Sajid Javid are long overdue. Of course, they kept them for the party conference season, wanting to grab the headlines, but the big question is whether it is too little, too late.
Just a few days ago, the latest index from the Halifax shows that house prices increased by 1.4% in the third quarter of 2017. In the three months from July to September prices have seen their fastest growth since February, just before the triggering of Article 50 beginning the Brexit process at the end of March, and average prices reached a new high.
The data from the Halifax Bank also shows that prices increased by 0.8% in September month-on-month to an average of GBP 225,109 and are 4% higher year-onyear. Indeed, the annual rate of prices growth in September was higher than in August when it was 2.6% and at it is the highest growth rate since February. It is also the second month in a row that the annual rate has picked up.
So, even with Brexit, a snap general election and a summer slowdown, the relentless push upwards has not really been diminished and there is plenty of evidence to show that first-time buyers are still struggling to get on the housing ladder.
So, May announced GBP 2 bln of extra funding for a new generation of council and housing association homes in England. But this will realise just 25,000 more homes for rent in areas where the shortage of affordable homes is the most acute.
The Department for Communities and Local Government pointed out that since April 2010, around 333,000 affordable homes have been delivered, including 240,000 for rent. More than twice as much council housing has been built since 2010 than in the previous 13 years.
It also announced a GBP 2.5 mln cash boost to speed up the delivery of over 155,000 new homes in the proposed garden towns across England. Nine locally-led garden town developments, from Bicester to Taunton, will each receive new funding to fast track the build out of these large housing projects.
David Orr, chief executive of the National Housing Federation (NHF), described May’s announcement as “a watershed moment” for the nation and Brian Berry, chief executive of the Federation of Master Builders (FMB), called it “brave and bold”.
But it should be remembered that in the house building heyday of the 1950s and 1960s, a healthy private sector was always complemented by significant levels of social house building. In the 1960s, for example, around 400,000 homes were being built per year and half of those were social housing.
Planning is still an issue. The Mayor of London has just stepped in to get the number of affordable houses in a development doubled, so such a step that stops a developer, with council approval, to build fewer homes at the bottom end of the market should be welcomed.
But the Mayor of London cannot go it alone. The planning process needs to be addressed and although there have been plenty of promises in this direction, there is not much action. And it is not just a matter of speeding up the planning process, these promises need to be followed with a real commitment if they are to have any impact.
The undersupply of housing in this country is putting serious pressure on prices and affordability across the market as the Halifax index shows. Speed is of the essence.