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The housing sector is having a very tough time right now – the ending of Help-to-Buy has coincided with a downturn in the market and higher construction costs. In previous downturns, the social housing sector has helped to keep the sector building, but that’s proving exceptionally difficult this time – housing associations are having to direct more of their funds to improving the condition of their existing stock, and local authorities’ finances are just too stretched in every way. If housebuilding slows down, this has a knock-on effect throughout the whole of the housing supply chain. If staff or whole firms are lost, it can be very difficult for the sector to build back up the capacity to deliver new housing at scale, even when the market conditions are better. The government has set a target of building 300,000 homes a year by the mid-2020s, and as we approach this deadline, we’re falling a long way short, with the number being built this year likely to be quite a lot lower than last year.

These are the key things we are calling on the Chancellor to address in the Autumn Statement:

– More funding for affordable housing is needed to build the much-needed new affordable homes, as well as to help keep the sector as a whole building. Last year, £255m of funds earmarked for affordable housing went unspent and returned to the treasury. More flexibility is needed to ensure it is spent as intended. £1.6bn was spent on temporary accommodation last year. Without investment in affordable housing, these astronomical costs paid by local authorities will keep escalating, further jeopardising their financial situations.

Local authority planning departments need adequate funding to ensure that local plans come forward and planning applications are processed efficiently. One in five councils lack an up-to-date local plan and only one in ten planning departments are fully staffed. If the government wants to meet its target of 300,000 homes a year, councils need the resources to deliver plans to deliver the right housing in the right places.

– The government has hinted that it is looking at some form of support for first-time-buyers. This can be helpful, though there’s also a risk that inflating buying power across the board simply pushes up prices because supply is constrained. It’s more effective if any subsidy is targeted at getting more homes built. Only by building a lot more houses, including affordable homes, can the shortage of housing be solved. A new ISA scheme to help people save won’t help in the short term. Updating the caps on the value of homes purchasable via Help to Buy ISAs and LISAs seems very sensible, however.

– The Social Housing Decarbonisation Fund needs the funds released beyond 2025. A longer-term fund with more certainty and less competitive bidding, and more flexible timings would generate better value for money.

– We also very much need a bill to address the hiatus caused by nutrient neutrality rules, which are preventing housebuilding in many areas due to water pollution rules, even though new houses are not a major cause of the pollution. Funding to tackle nutrient pollution at source is needed here.

We’ve also set out our high level asks on housing here: The Housing Forum: Our 3-point plan for UK housing solutions.

For comments please contact: Anna Clarke, Director of Policy and Public Affairs, 07442 405513

The Chancellor attends the Mansion House pension summit, image by HM Treasury licensed under CC BY-NC-ND 2.0 DEED
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