How to build the houses this country needs

While it is positive to see that the new government plans to make the mortgage guarantee scheme permanent, there remains a significant gap in support for first-time buyers of new homes. So how realistic is the target of building 1.5 million new homes by the end of Parliament? The most important thing is that there is an ambitious goal. Goals should be challenging in nature, they should not be easily achievable and this shows purpose.

Ministers understand how serious the shortage of new homes is and want to do something about it. Our country urgently needs more new homes of all types and ownership types, and setting a target of 1.5 million will help provide them. On the demand side, the Bank of England’s decision to cut interest rates for the first time in more than four years may initially have a limited impact on mortgage repayments, but it will go a long way towards boosting buyer and seller confidence. Data from Halifax already pointed to changes in the housing market over the summer, with the rate of house price growth reported to be the fastest since January. This could be a sign that consumers have waited long enough to make changes in their lives.

While we would have liked to see more detail on the demand side of helping consumers, there is certainly no shortage of detail about the Government’s commitment to removing barriers to home building and the scale of its ambition is to be welcomed. One area of ​​concern is social housing. The sector faces rising operating costs due to inflation and investment in decarbonisation and improving standards in existing homes. Likewise, income for housing providers has declined as they help residents cope with the cost of living crisis.

The loss of appetite among housing providers to buy homes from developers through the so-called “Section 106 process” was outlined in a recent Savills report. The report found that 53% of housing associations no longer intended to purchase Section 106 homes (with restrictions on price and buyer criteria) or were reducing their requirements, and that 75% of housing associations had less financial ability to afford them. This sharp decline in activity acts as a barrier to any development and limits the ability to build the new homes we need in sustainable mixed communities.

We also need more government support for the affordable housing sector. Housing associations urgently need long-term rent regulation to help them plan for future investment. Ideally, this would be a 10-year, index-linked social rent settlement that also includes the reintroduction of rent convergence. The G15 group of major housing associations recently estimated that scrapping rent convergence would cost the sector £2 billion.

If we want to have any chance of building 1.5 million new homes during this Parliament, we will have to pull out all the stops. We need developers to build as much as possible so that housing associations can play their part and existing homes can be brought back into use. Only with a coordinated commitment to housing growth, with ambitious local plans, with local authorities taking responsibility for housing for their people, with meaningful support from both affordable housing providers and local authority planning departments, coupled with measures to ensuring availability on the demand side, we can hope to achieve the 1.5 meter target.

So while the 1.5 million figure is very challenging, it shows the ambition and action we need to finally build the homes this country needs.

Barratt Redrow: Building Together speed up the delivery of houses needs of the country. barrattredrow.co.uk