Autumn statement - sector reacts
Published by Max Salsbury for 24dash.com in Central Government and also in Housing
London pilots to explore options for affordable housing investment
Chancellor George Osborne has announced a number of measures that will have an impact on the housing sector in his autumn statement.
Among them are plans to issue £1 billion in loans to unblock large housing developments and to give councils additional flexibility to build new affordable housing.
Councils will also be given an additional £300 million of borrowing capacity through the Housing Revenue Account.
Below are some of the reactions from the sector.
Marc Vlessing, chief executive of affordable housing builder Pocket, said: “The chancellor’s pledge of additional funds to unblock housing developments across the country is to be welcomed, but the fundamental challenge remains we must build far more homes. This means identifying new and innovative ways of encouraging greater land release by local authorities for housing development, and ensuring greater collaboration between local authorities and private developers to kick-start actual development.”
Simon Rubinsohn, RICS Chief Economist, said: “As we’ve been saying for a long time, 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 £1bn 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."
The Chartered Institute of Housing (CIH) has reacted positively to the statement but believes the chancellor should go further. Grainia Long, chief executive, said: “We are pleased that the chancellor has acknowledged the principle that councils should be allowed to borrow more so they can build more homes, which CIH has been calling for. But 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. The finer details will be crucial – it is critical that the overall package results in a net increase in housing investment and new homes.
"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. Increasing local authority borrowing caps by £7bn, rather than £300m, would allow councils to build 75,000 new homes over five years, creating 23,500 jobs and creating £5.6bn of economic activity."
Richard Ford, head of planning at law firm 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.”
Paul King, chief executive of the UK Green Building Council, said: “The chancellor is right to say ‘going green doesn’t have to cost the earth’ - if only he practised what he preached. Tax cuts for shale gas are a stark comparison to the butchering of ECO we’ve seen this week, a scheme which was helping many households with the cost of living crisis through lower energy bills.
“The emphasis on housing and infrastructure is welcome, but he’s missed an open goal by not recognising the potential for construction to deliver green growth.”
Mark Henderson, chief executive of Home Group, welcomed initiatives to unblock land needed for large scale development as well as £1bn-worth of loans and guarantees to kick-start house building. He 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 law firm Trowers & Hamlins, said: "Local authorities will broadly welcome the additional £300m of borrowing capacity to build new homes. The current housing debt cap is a real barrier to more significant investment in affordable housing – it is reckoned that a complete removal of the debt cap would facilitate borrowing to enable the development of 60,000 affordable homes in a five-year period. Today's announcement will go some way to meeting that ambition."
HCA chief executive Andy Rose said: “An additional £1bn for large scale housing developments demonstrates the government’s commitment to supporting housing throughout the next spending period.
“It is also recognition that the HCA’s current LIF programme is speeding up delivery, at sites such as Cranbrook near Exeter where £20m LIF funding has helped unlock one of the largest and most significant housing and employment developments in the country.
“This is core business for the HCA and sites like Cranbrook play a huge role in supporting local aspirations for growth.”
National Housing Federation chief executive David Orr said: “The chancellor’s acknowledgement that in order to have a stable housing market we need to focus on building more homes and regenerate economically stalled areas is welcome.
“A number of measures he announced in the autumn statement are steps in the right direction. The next step will be to put housing at the heart of long-term government plans for economic recovery.”
Chloe Fletcher, policy director of the National Federation of ALMOs, said: “The news that the government will be increasing council borrowing caps as well as increasing discretionary housing payments is welcome progress that will go some way to helping councils build new affordable homes and soften the worst effects of welfare reforms. However, the £300m bidding programme from 2015/16 is someway short of the £7bn over five years that councils could prudentially borrow to build 60,000 new homes as outlined in our 2012 report: Let’s Get Building.”
Peter Hindley, managing director of Keepmoat Homes, said: “We welcome the £1bn of loans to unblock large housing developments and the plan to lift council borrowing caps by £300m.
“While private sector house building has started to pick up, the number of affordable homes built in 2012-13 dropped by 26% and the number of homes delivered in the social rented sector fell by more than a third.
“Working in partnership with local authorities, housing associations and funders such as the HCA (Homes and Communities Agency) we know affordable, high-quality housing can be achieved on a large scale.
“As a country with 1.8 million households on waiting lists for social housing we desperately need measures like these to kick start the construction of new homes again.”
Ruth Cooke, Midland Heart chief executive, said: “Providers like us need real support and flexibility from the Government to allow us to help address the fundamental lack of affordable housing in the UK.
“It is encouraging to hear borrowing limits will be increased, but we need to understand the detail of what this means.
“Demand for extra homes in England is estimated as 250,000 properties per year. Behind these figures are some of the most vulnerable in our communities who are hit hard by the crisis; those that have few options, who are forced into overcrowded homes or made homeless.
“We work in the heart of communities and it is vital that the housing sector is also recognised for the broader role we can play in delivering refreshingly new services and initiatives; such as our innovative apprenticeships scheme Back on Track, our inspiring regeneration initiatives and our integrated care services”.
Mike Ward, executive director of property at Circle Housing, said: “At Circle Housing, we have long been champions of mobility, and developed ways to help social housing tenants to move home for a variety of reasons, whether it is for work, or to be closer to family or schools. Our home swap site, House Exchange, recently surveyed over 2,000 customers around their motivation for looking to move with over 14% stating the need to be closer to work. Without schemes such as these many would languish for up to 10 years on waiting lists due to the short supply of housing.
“This is why we also joined together with Islington Council to set up Homefinder UK, which again makes it easier for tenants to move to other parts of the country who wish to remain in social housing. We would welcome being involved in the consultation with the government on how schemes such as Homefinder and House Exchange could support more tenants in moving for work related reasons.”