The Prime Minister may have committed to building one million new homes by 2020, but how will these be funded? The Welfare Reform Act announced in the summer forces deflation into business plans barely a year after the government ‘guaranteed’ 10 years’ worth of inflation.
Over the last five years, politicians have been less concerned about the appalling deficit in roofs over heads than the budget deficit. Phil Shelton, CEO of housing experts SDS, offers an eight-point plan to redress this:
1. Tax incentives as in the film industry
Help the house-building programme with tax incentives. We have a far greater need for housing than home-grown Hollywood movies and stars. These incentives will encourage construction and help simplify and speed up the process of gaining planning permission.
For years, the film industry has enjoyed tax incentives that are worth up to £5m on £20m budgets and £5m on the first £20m for bigger-budget movies. And the government is planning to improve this package.
2. Light-touch regulations and clear timetables
Introduce clear timetables and light-touch regulation to make it easy for housing providers and local authorities to bid for the grants. Sadly, the timetable falls way short of what we need to solve the housing crisis, and the government is still just nibbling around the edges.
3. Scrap the £50bn HS2 and divert the funds to a high-speed housing programme
Think the unthinkable or obvious, whichever way you see it, and immediately scrap the HS2 folly, which, according to the latest government figures, will cost over £50bn. Replace this vanity project, which is totally speculative, and re-direct at least some of the millions into public housing projects. This would be a ‘double whammy’: more roofs over heads and a huge boost to the construction sector and its allied industries.
The huge HS2 ‘white elephant’, with the final stretch to Glasgow removed and which the SNP will probably now have to fund, will release a few billion of the total £50bn cost of the whole project; use those savings for new housing.
4. Throw out the bedroom tax
Forget the bedroom tax and focus on identifying the types of homes actually needed in a specific area. Micro planning should oust social engineering and a mean tax. In other words, the £470 million expected to accrue from the bedroom tax will help, but it’s not huge in terms of the task at hand.
5. Provide clarity and certainty on the future of housing
This has been woefully lacking and a new clarity would be a welcome change. The Prime Minister has committed to one million new homes by 2020, but how exactly will these be funded and how many will be affordable? Where’s the clarity in how that will happen? What certainty is there for the five million people on waiting lists for housing?
6. Encourage local authorities to build council houses
But be sure to seek expert advice from industry veterans who know the pitfalls. The local authority and private sector initiatives, where LAs set up separate companies to build houses, is the right route to take. Already we have successful examples; think of Manchester City Council’s partnership with the Greater Manchester Pension Fund.
7. Embrace overseas partnerships
Embrace overseas partnerships and investment such as the partnership between Sydney and London Properties and the USA’s highly experienced and cash-rich Related Companies which developed the successful Hudson Yards project in New York. Here in the UK, Incommunities Housing is finalising plans to build six pre-assembled homes in Manningham, in a partnership with construction specialists from the Netherlands, in an example of international working.
8. Throw out the IMS system
Throw out the IMS system because the Homes and Communities Agency’s (HCA) approach is putting off housing providers from bidding for grants. Instead, move towards continuous market engagement, and forget the current lengthy programmes. These invariably start slowly and end in a frantic scramble to deliver. This has proved clumsy, time-consuming and hide-bound by red tape. There are reportedly five million people on waiting lists for housing (according to BBC Radio 4) and we need 250,000 new houses per year. Where is the massive cash injection from the public purse? Or from the private sector?
Phil Shelton is the CEO of SDS.