Are we seeing a spring in the step-change for housing?March 20, 2018
Mairéad Anne Carroll, Programme Director, Housing
Following on from last week’s announcement of revised changes to the National Planning Policy Framework, there were hopes the Chancellor’s Spring Statement could see government further cement its commitment to solving the nation’s housing crisis.
During a rare glimpse of sunshine, like our brief peek of spring, the Chancellor announced a revised forecast of growth up from 1.4% to 1.5% for 2018. Could this signal green shoots, or at least extra money, for the housing sector?
- £1.67 billion for London to build 26,000 affordable homes. At least two-thirds of these homes will be for rent, including social rent.
- The West Midlands is promised 215,000 new homes by 2030-31.
- More than double the housing growth partnership with Lloyds Banking Group to provide finance for small builders.
- Talks underway with the 44 local authorities that bid into the Housing Infrastructure Fund.
During his speech the Chancellor recommitted to the spending announcements made in last year’s budget including:
- £44 billion over the next five years to raise the supply of homes to 300,000 a year on average by the mid-2020s
- Abolition of stamp duty for first-time buyers of homes under £300,000.
Anyone optimistically hoping for something more substantial in the Spring Statement would have been sadly disappointed.
Last week also saw the publication of Sir Oliver Letwin’s letter to the Chancellor and the Secretary of State for Housing, Communities and Local Government setting out the focus and next steps of his review into build out rates. So far, the review has found that the absorption rate – the rate at which newly constructed homes can be sold into the local market – appears a fundamental driver of the house-building rate.
We have been meeting with Oliver Letwin to share our Scores on the Doors data, which provides an evidence base for his work. Our data shows that sites of around 150 units have the fastest build out rates and lose the fewest homes between permission and completion
Sir Oliver will investigate whether increasing the variety of homes built increases the rate at which homes can be sold. The final report recommending practical steps to increase the speed of build out, is expected at this year’s autumn Budget.
By Budget-time, the revised NPPF will have been published, the Letwin review will have been concluded, and it would be an ideal time for the Chancellor to review capital funding for new homes.
With the mid-2020s at least seven years away, the urgency of the broken housing market means we need more government money to solve the crisis now, and not at some distant point in the future.