If the government is serious about tackling the housing crisis more needs to be done

Sarah Richardson

How serious is the government about addressing the UK’s housing crisis? According to Stephen Stone, chief executive of Crest Nicholson, nowhere near serious enough.

At the second annual Building Live conference this week, Stone laid into Westminster for the lack of top-down leadership on the crisis, and successive administrations for “30 years of inactivity” that have left the UK struggling to house its population.

His sentiments were echoed by other senior industry figures, with KPMG’s infrastructure head Richard Threlfall and Al Watson, partner in law firm Taylor Wessing, among those decrying the missed opportunities to solve a problem that, as the population swells, is only getting worse, particularly in London.

The issue clearly isn’t that the government is ignoring the need for more homes; as last week’s Autumn Statement showed, investment in housing, along with infrastructure (and specifically, infrastructure that unlocks housing developments) are to be the main beneficiaries of the May-Hammond relaxation of austerity measures on public borrowing. Meanwhile, virtually every other day, a minister will be on a platform somewhere in the UK talking about the government’s ambition to create more housing.

But the issue is that so far – and, as Stone points out, “so far” can be taken to encompass the last three decades – the sum of the various initiatives comes to far less than the centrally-led strategy that any government should have in place to ensure there are enough homes for its citizens.

The mismatch of ambition and reality has been aptly illustrated over the past few days in relation to affordable housing – an area that strikes at the heart of the wider crisis over homes. As we reported last week, no sooner had Philip Hammond trumpeted the 40,000 homes that £1.4bn of additional funding for affordable housing would lead to over the next five years, than the Office of Budgetary Responsibility suggested that the cumulative effect of current policies towards affordable homes – including that £1.4bn – would actually lead to 13,000 fewer units built by housing associations than expected over the period.

The reason for the difference is not a straightforward case of advisers happily rounding up numbers and hoping nobody notices. It’s because of the knock-on impact of another government policy announced last week – the decision to allow affordable homes subsidies to be used for homes for rent, as well as shared ownership.

Put simply, shared ownership housing uses up less grant than rented housing, as the grant is only used to subsidise the rented portion of the property, not the part owned by the occupier. Therefore, you can build more homes for shared ownership using the same affordable homes grant than you can homes for affordable rent.

The decision to allow subsidy to be used for affordable rented properties – a reversal of previous government policy – is not in itself a poor decision; it’s exactly the opposite.

The need for government to embrace a mix of tenures in order to provide the homes the country needs has long been argued by the housing sector, including the housing associations that work with the vastly expanding demographic priced out of owning their own home. Acknowledging that was a significant step in the right direction for a government that needs to house its people.

The problem is that the pot of affordable housing cash on offer wasn’t increased both to take account of the delivery of more affordable homes for rent, and ensure the overall number of affordable properties delivered would grow beyond previously envisaged levels.

For government to introduce a policy that prioritises a mix of housing that will actually help those who need it, rather than focusing on getting the biggest possible headline number of affordable homes for a certain sum of money, is actually a refreshing outcome given typical political short-termism, whether it was intended or not.

But the bigger picture is that, having recognised both the need for a wider variety of homes, and the need for more homes, the government should be investing enough to enable both. The housing shortfall is happening on a large scale, and it needs a large scale, coordinated response to match it.

Sarah Richardson, editor