Government urged to create National Housing Fund

Think tank ResPublica, working with housing management consultancy PCA has called on the Government to create a National Housing Fund to boost the supply of new homes around the country. Backed by a consortium of housing

associations, the report – ‘A National Housing Fund to build the homes we need’ – attempts to show “how £100bn of repayable investment over a decade could transform the country’s housing offer, providing tenants with certainty through long-term tenancies and the opportunity to buy the home they rent at a future date.” The authors argue that, as the “case for

austerity recedes in the public and political consciousness, this model could produce both the homes the country needs and a significant boost to public finances. The report proposes that Government

joins a number of leading housing associations in the creation of a National Housing Fund that would utilise Government borrowing capacity to deliver at least 40,000 new homes annually, as well

as “boost public finances by £3.4bn, create 180,000 new jobs in the construction sector, support the growth of small and medium sized builders, and grow the wider construction industry through repeat investment.” Collectively, the report envisages that

housing associations and Government would hold a 50 per cent stake in the fund. The associations would manage the properties and government would provide the funding, through the raising of Government bonds. The rental income of the Fund would in turn meet the cost of the Government’s interest payments until the loan is repaid, and over time, the net rental income would generate surpluses that can be reinvested into building more homes. Managing director of PCA and report

author, Philip Callan said: “Historically, low borrowing costs can provide the mechanism to deliver the homes we need. Our report focuses on the practical steps that Government can take to deliver many more

homes. All of our proposed actions are in their control. What is needed now is the political will and leadership to make it happen.” Developers only build at a rate that

they know they can sell, and as a result production over the last 35 years has average at 150,000 homes against the Government’s target of 200,000. Every year this target is missed, demand is pushed up and ultimately so too are house prices and rents, with one in seven households nationally already spending 50 per cent of their income on housing. The National Housing fund is intended

to provide some of the certainty that the development market needs. It would contract to buy homes on existing and planned schemes, speeding up developments and enabling smaller developers to rapidly increase their output. The proposals seek to utilise Government borrowing powers for a time-limited period while generating “significant returns to the public purse” in the process. Lord Kerslake, former permanent

secretary at the DCLG, added his view: “This is a big and ambitious proposal that alongside other measures, would have a material impact on the supply of new housing. It deserves serious consideration by government and the sector.”


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