Crisis – What (Housing) Crisis?

Crisis – What (Housing) Crisis?

16th February 2017

It seems that under David Cameron’s government housebuilding here in the UK fell to the lowest level of any peacetime prime minister since the 1920s, despite the burgeoning housing crisis we’re experiencing, especially in our cities.  The number of home owners fell by more than 200,000 while homelessness increased exponentially.  According to Tim Roache, General Secretary of GMB (Britain’s General trade union which has more than 630,000 workers in several sectors across the UK), we need 250,000 new homes every year to keep up with demand. 

The new government’s Housing White Paper which was published last week has drawn criticism from housing experts, including the shadow housing minister, John Healey who branded it “beyond feeble”.   Other housing experts expressed their disappointment that so much housing remains beyond the reach of a significant number of people and would like to see the government backing up this policy with extra funding and resources in the budget. 

The new housing plans will only affect England, not Wales, Northern Ireland or Scotland, where planning powers are devolved to their governments and executives.  Key points in the new housing plan include:

·         Maintaining protection of green belt areas in Britain

·         A requirement for developers to begin building within two years of securing planning permission on a site.

·         Encouraging older residents to downsize to smaller properties

·         Incentives for build to let properties

·         A £3 billion to help small buildings deliver more homes to the UK housing market.

·         Encouraging developers to avoid “low density” housing where land availability is limited.

·         Requiring Local Authorities to produce an up to date plan for housing demand

·         The introduction of banning order to prevent the “worst” landlords and agents from operating and a ban on letting agents’ fees.

While the White Paper demonstrates the government’s recognition that the focus needs be include a wider range of housing solutions and deliver more homes with affordable rents, experts are calling on the government to give more power and flexibility to Local Authorities to invest in housing.  It’s essential that house building activities in the UK include homes for affordable and social rent in order to create and support strong communities. 

The Housing White Paper goes as far as to admit that the current market is “broken”, an issue that needs to be addressed promptly.  The paper includes a proposal that 20% of all larger developments should be starter homes will be dropped and replaced with a “clear expectation” that at least 10% of developments will be “affordable home ownership units”.  Starter homes (which were championed by David Cameron) are new homes built for first time buyers between the ages of 23 and 40 and are sold at least 20% below market value.  However, by limiting longer tenancies on new privately rented accommodation, renters on stagnant wages are likely to find affordability still an issue. 

It remains to be seen whether these measures are enough to begin addressing the housing crisis we have here in Britain.  However, the increase in building activity should be good for the construction industry as a whole.