20 COMMENT A MIX OF SOLUTIONS
Since the 1940s net housing supply has only reached close to 250,000 homes per year on a sustained basis either alongside a substantial social housebuilding programme, or with overnment support for fi rst time buyers, as with elp to uy between 2013 and 2022.
ecause new private homes are sold into a market dominated by the sale of existing homes, new private homes typically only make up about one tenth of all private sales in any given year. his means we would need total sales of over two million homes a year to achieve 200,000 new private home sales. Projected market conditions, without any intervention to support fi rst time buyers, would indicate total sales of around half this level (1.16 million. his will test the persuasive powers of Mr Pennycook and Deputy Angela ayner, over what they can secure from the reasury.
numbers typically around 6,000 to 7,000. He insisted that “We need to do better than that. However, housing industry experts are warning the Government that it could miss its overall target by at least 500,000 homes without increased funding and policy intervention. he ational ousing ederation , the ome uilders ederation and avills have warned that signifi cant support for new social housebuilding and homes for fi rst time buyers are required to make a real difference. Without this they predict there is likely to be a shortfall of up to 95,000 new homes a year on average. According to the fi ndings of the avills report, the quickest way to plug the gap in delivery is through targeted grant funding for social housing, including social rented homes, as part of a wider support package for social housing providers. his would also help ensure that councils and housing associations can afford to buy Section 106 homes from private developers, which they are struggling to do at present because of the strain on their fi nances. his could sit alongside a overnment funded support scheme for fi rst time buyers which in turn would increase the demand and delivery of new homes for sale in the private market.
RECORD LEVELS OF DEMAND As we already know demand for social housing is at record levels with 1.3 million households on social housing waiting lists in ngland. his is affecting families across the country, with one in fi ve children currently living in overcrowded homes, and over 150,000 children homeless and growing up in
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unsuitable temporary accommodation – which is also the highest level on record. Since grant-funded social housing does not rely on market conditions, Savills and the NHF say it is resilient to market downturns and can help ensure a steady demand for homes, propping up the construction industry, securing jobs and boosting growth. his would help sustain growth across the wider economy which is probably the highest priority for the Government.
While the ambitious planning reforms (to the NPPF) announced by the Government are vital in increasing the number of plots available to build on, the number of new homes built will still be determined by local demand to buy those homes, particularly in the fi ve years of this Parliament.
he state of the current housing market limits this demand – with high interest rates, high house prices, and fewer mortgages available to fi rst time buyers all acting as barriers to purchasing homes on the private market. Without additional funding to build social housing, the overnments target relies on delivering an average of 200,000 new homes per year for private sale as the key component in the 300,000 net additional homes per year required. he avills report reveals this to be near impossible to achieve by 2030 without additional Government support, based on historical trends and on current and projected market conditions. his is not due to capacity or lack of ambition within the housebuilding sector, but to the likely state of the wider housing market over the next fi ve years.
he and have called for support to bolster the fi nancial capacity of social housing providers through a long-term rent settlement, funding to invest in existing social homes, a rapid boost to the current Affordable Homes Programme and commitment to a new long term and expanded programme. Some of this has already been approved, but Savills say this needs to be complemented by support that the Government can offer to fi rst time buyers and ensure that all housing providers are able to invest with confi dence in the new sites and labour resources to get the country building again.
It is uncertain how much capacity local authorities currently have for them to assist in building more council homes, as council fi nances hang in the balance with rising costs and increasing pressures pushing their budgets to the brink. Many councils face the near-impossible choice between record spending on homelessness services and the provision of temporary accommodation, while at the same time their housing revenue accounts are going into defi cit.
hey also have to meet new statutory repair obligations, under Awaabs Law which will require landlords to fi reported haards, such as mould and damp within specifi ed timescales. Alongside this they are being required to improve property standards and the energy effi ciency of tenanted housing and prepare themselves for a new, Decent omes tandard. his is a scenario to test even the most gifted and imaginative of council treasurers and housing directors, as well as the Housing Minister and the Deputy PM.
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