Build more social housing – and quickly! 03/2009
The recent announcement of £150 million in social housing by the Government is a welcome one – but social housing providers must become one of the few to actually make progress in these times of financial turmoil. So says Tyson Anderson, Sales and Marketing Director of leading ventilation manufacturer and supplier Titon, who joins the clarion call for more social housing.
It’s very easy to be negative. The housing market appears to be in freefall and the mortgage market in tatters. House prices are falling and new developments have been stopped dead in their tracks. Everywhere there is the gentle sound of belts being tightened. The world of housing and construction has changed dramatically since last summer and so has the general public’s attitude. In the words of a recent Daily Telegraph leader column: complacent extravagance has been usurped by austerity.
The link between this decline in the new build private housing market and social housing is pronounced. So many new housing developments are based on a proportion of social housing – in fact in many cases planning permission is only granted on condition the development contains a proportion of affordable homes. If the new development isn’t built because the developer can’t raise the cash, and the non-social housing isn’t selling because homeowners aren’t moving, then the proportion of the development for affordable homes and social housing remains just a set of drawings which are mothballed along with the luxury apartments and executive houses.
So the UK is now in a position where there is still a housing shortage, but it’s not being addressed by housebuilders – for all the reasons which have been so clearly spelled out in the national press and reflected in the stock market and estate agents windows up and down the country. Does any of this matter though? Won’t it just be a case of sitting tight and waiting for the good times to return?
Actually, no. This lack of social and affordable housing is beginning to reach a crisis point. According to Shelter, the national housing charity, there is a backlog of need for more than 500,000 social rented homes, some of which can be accommodated from existing stock, but over 150,000 need to be new-build additions to current housing. And the Government’s £150 million for social housing will deliver only 2,000 homes. The charity also said that while the total number of new homes required each year is roughly equal to the Government’s target to reach 240,000 new homes by 2016, their research suggests a much greater proportion of affordable homes are needed than the Government’s plans currently reflect.
However, it’s not all plain sailing for the housing associations either. There is a limit on how much central funding can be used for housing development schemes – currently set at 40%. The rest has to come from borrowing or private sales within any scheme. Again, this is putting pressure on the hard pressed developers and housing providers to deliver the kind of numbers required. That’s why housing associations and the National Housing Federation are pressing the Government to relax these rules. And it seems that others are joining the fray. Boris Johnson, the Mayor of London, has announced plans to create 50,000 affordable homes and kick start the housing market in London with a £5 billion three year project which includes the go ahead on stalled developments, unsold homes being made affordable and bringing back long-term empty homes into residential use. We’ll have to see how things work out in this febrile climate.
But why do I care about social housing? The truth is there is a real opportunity to expand our social housing stock – and if we don’t seize the chance, there will be an additional knock on effect for all of us involved in the construction process – architects, designers, bricklayers, and yes, ventilation companies. If houses aren’t being built – whether private, public sector or a combination of the two – we all feel the squeeze. Like Shelter, and the National Housing Federation, but for different reasons, we at Titon believe the Government must kick start the affordable and social homebuilding programme. With a predicted shortfall of 500,000 homes in the next five years we must build, both responsibly and sustainably. Otherwise, when the housing market returns to a positive state of affairs we will once again be in danger of an asset bubble, thanks to the lack of housing supply – and the call for no more boom and bust will again be tested severely.
I believe that we actually have an opportunity now to make a real difference. I’m not saying we can resolve the housing situation overnight, but if the Government and Opposition Parties agree a way forward we can begin helping both the struggling house building sector – which would help all the companies associated with the industry – and some of the most vulnerable people in our society. And that would be good news all round.