Posted on 04 December 2024
Our Chief Executive, Andy Hulme writes about how planning reform is important, but finance is key to unlocking the biggest boost to social and affordable housing in a generation
To help get Britain building, planning reform has rightly been a priority for the new government. But, on its own, it won’t be enough. Here’s why.
The latest data on housing supply in England makes for worrying reading for anyone who cares about solving the housing crisis in London and across England.
The new government has a target to build 1.5m homes over the next five years, or an average of 300,000 homes a year. But the country hasn’t built over 300,000 homes since 1970, and the latest official data found just 87,660 new homes have been started in the latest 12-month period for which records are available.
We’ve seen a stark drop off in housing delivery because paying for these new homes has become much more difficult, especially as social housing charities like Hyde face competing challenges. We’re investing more in our customers’ homes, facing rising costs, and have uncertainty on our income due to government changing the rules at short notice.
So, where does planning reform come into it? There is much to welcome in the new government’s proposed changes. If implemented, they will represent a significant shift in the approach to new housing.
Proposals to redefine the approach to the Green Belt, making development more likely on scrubland, previously developed land, former industrial sites and disused car parks, are another step forward to help unlock more sites for development where it is appropriate and suitable.
We also welcome plans for the ‘golden rules’ for development on these sites, including to ensure at least 50% of the homes built on these sites are affordable.
The prominence of sustainability and well-designed homes in the proposals are welcome. At Hyde, we’re striving to ensure all new homes achieve the highest energy-performance standards and are eliminating gas from all schemes under construction where feasible.
But this will only get us so far. Crucially, the funding support must also be in place to make sure these sites are viable to deliver affordable homes.
We’re committed to building affordable homes, and strongly support the reinstating of mandatory housing targets for local councils. This will create the incentive to ensure all councils are delivering the homes their communities need.
Given the challenge with the affordability and availability of housing the most welcome part of the new government’s approach is the focus on increasing the delivery of affordable housing.
It is essential the government prioritises building social rent homes and works with the sector to deliver these. However, delivering more social housing requires more grant subsidy.
Analysis conducted by Savills on behalf of the National Housing Federation and the Home Builders Federation, showed Labour is on course to miss its housebuilding target by up to 475,000 homes without more grant funding for social housing.
With housing associations facing significant financial challenges that have led to a dramatic drop in affordable housing starts, planning reforms alone will not be enough to tackle the housing crisis.
The brilliant thing is that investing in building new social housing is a win-win. It helps people in desperate housing need, while also boosting the economy. Research Hyde delivered with academics and others in the housing sector, has shown that England’s 4.2 million social rented homes contribute at least £77.7 billion a year to the national economy, by boosting economic activity and by saving councils, the NHS and other public bodies money thanks to customers having better outcomes.
To increase the supply of social and affordable housing the government needs to do three things as soon as possible.
First, in its forthcoming consultation on social rents the government needs to give social housing providers more long-term certainty to invest by confirming a 10-year rent settlement.
This would help to make up for meddling with the system that has cut income from social rents by 15% in real terms and taken billions away that could have been invested in improving existing homes and supported building new ones.
Second, establish long-term funding for the next Affordable Homes Programme (AHP) as soon as possible, so we can work with private investors to bring in investment to help tackle England’s housing crisis.
Third, provide immediate support to existing funding programmes to get housing starts back on track which includes releasing the additional £500m for affordable homes as soon as possible.
We welcome the additional £500m investment announced in the Budget, but this must be a down-payment on far bigger amounts to come in next year’s Spending Review.
The key to unlocking the potential of the biggest boost to social and affordable housing in a generation lies in providing sufficient long-term funding for housing development, particularly for providers of social and affordable housing who can help to address the increasing unaffordability of housing in England.
We’re excited about the prospect of working with the new government to help solve the housing crisis and meet our shared ambitions.
There is not a moment to waste if we want to deliver 1.5m new homes over the next five years.
A version of this article first appeared in Housing Today on 2 December 2024.