PM calls on housebuilders to "do their duty" as affordability takes centre stage

By Paul Norman - Wednesday, October 04, 2017 14:34

Prime Minister Theresa May has told the Conservative Party Conference in Manchester that the government will invest a further £2bn in affordable homes, open up land for developers and where “need is greatest” return to building houses, as she placed solving the UK's housing crisis at the heart of her administration's political aspirations.

Many commentators have subsequently focused on the Prime Minister’s difficulties struggling with a cough throughout her keynote address, but there were bold pledges on solving the UK’s housebuilding problems.

May said the Tories had introduced Help to Buy but the election result had proved this was not “nearly enough”.

May pledged a further £10bn for Help to Buy and an additional £2bn for affordable housing, taking the budget to over £9bn.

May added that “where need is greatest” new homes for social rent at below market rates will see government get “back into the business of building houses".

May added that it is her mission to solve the problem and she promised developers that government will make land available and they must build the homes people need.

May said: “Whether you’re trying to buy, renting privately and looking for more security, or waiting for years on a council list, help is on the way.

“I’ll take personal charge of the government’s response and make the British Dream a reality by reigniting homeownership in Britain once again.”She added: “I want to send the clearest possible message to our housebuilders. We’ll make sure land is available and that young people have the skills we need. In return, you must do your duty and build the homes Britain needs.”

Melanie Leech, Chief Executive, British Property Federation said: “We welcome the Prime Minister’s announcement of an extra £2bn available for council housing across the UK – we need a housing market firing on all cylinders, with the right signals from Government supporting all tenures. For example, council housing, home ownership and Build-to-Rent must all be supported if Government wants to effectively address the underlying issue of affordability.

“Government has called for family-friendly, longer tenancies in the private rented sector, to ensure renters have more security and the Build-to-Rent sector has responded by pledging its commitment to this. Our ambition is that longer tenancies become a trademark of Build-to-Rent.

“We are pleased that the Prime Minister has reiterated her statement of intent to welcome EU citizens and that Britain will remain a global economy. We urge Government to understand how critical this is – particularly if they wish to deliver on their promises of an ambitious housebuilding programme.”

Lewis Johnston, RICS parliamentary affairs manager, said: “In 1968, councils accounted for 40% of all housebuilding and today’s plan is an acknowledgement that councils are an important part of the solution to the supply crisis, although it will be interesting to see how this announcement works with the recent expansion of Right to Buy.”

Brian Berry, chief executive of the FMB, said: “Despite the Prime Minister’s precarious political position since the General Election, Theresa May has today managed to take a braver and bolder stance on house building than any Prime Minister of recent years. The private sector will continue to expand the number of new homes it builds, particularly so if the Government succeeds in its aim of removing barriers that hold back small scale house builders.

“However, in the house building heyday of the 1950/60s, a healthy private sector was always complemented by significant levels of social house building. Indeed, we have only ever built at the level we need to keep pace with demand when both the private and public house building sectors have been firing on all fronts. In the 1960s, for example, we were building around 400,000 homes per year and half of those were social housing.”

Berry continued: “The Prime Minister’s plan is also an opportunity to help shape a stronger local house building industry. If councils can start to engage with smaller, local builders to deliver this new generation of council housing, it could further help to diversify the industry. This would also boost the capacity of the private sector through the provision of more public sector work. Indeed, the increased use of small and medium-sized building firms will limit the problem of land banking, as this is something small builders simply don’t do.”

Berry concluded: “There do remain however, some significant roadblocks to the Prime Minister’s vision. Following Brexit, the serious shortage of skilled labour the construction industry is already dealing with will be exacerbated if it becomes much more difficult for EU tradespeople, who have come to play a crucial part in plugging the industry’s chronic skills gap, to move to and work in the UK. Although the industry must seek to overcome this crisis by recruiting and training many more young people than we currently do, the Government must also be mindful and realistic about the continuing need there will be for skilled EU workers as it puts in place its post-Brexit immigration policy. Otherwise it will risk jeopardising the delivery of the bold new house building ambitions the Prime Minister outline today.”

Justin Gaze, joint head of residential development at Knight Frank, said: “While the industry welcomes the Prime Minister’s announcement for additional funding into UK affordable housing, this will be most effective if it comes as part of wider strategy to embed housing right at the top of the policy agenda week in, week out – not just for days when big announcements are made. One additional measure to achieve this would be to recognise the housing minister as key figure in Government, by giving them a seat in Cabinet. It is a matter of national interest that housing remains at the top of the Government’s agenda with the political heft necessary to drive progress on delivering much needed private and social housing.

“In addition, with UK construction relying heavily on workers from the EU, it is crucial that certainty is given on their position during Brexit negotiations, we need to ensure that the industry has the capacity to deliver these much needed new homes.”

Rob Beiley, Partner at Trowers & Hamlins, said: "Councils will welcome the Prime Minister's announcement about accessing funding for new housing and will be pleased that Government has recognised the key role that Councils can play in delivering much needed new housing"

Andy Sommerville, Director of Search Acumen, said: “Our country needs to embark on the greatest housing boom the UK has witnessed in a century. For decades, UK governments have neglected the critical issue of our nation’s housing shortfall and as a result we estimate by 2022 the UK will be short of a million homes.

“Theresa May’s pledge to invest an extra £2bn in affordable housing is the first building block to making up for years of under supply and we can only hope that this is not simply another empty promise to fix our broken housing market. Now that our leaders share the industry’s sense of urgency, we must act to build more homes and we must act quickly. The gulf between supply and demand is widening each day. For the property and construction industry, this is the cue for Britain to start building.”

Carolyn Fairbairn, CBI Director-General, said: “In response to the profound challenges and opportunities of Brexit and creating a fairer and more prosperous economy, the Prime Minister has today planted important stakes in the ground.

“There is no question that the UK’s housing shortage needs action, not only to help people in communities across the country, but also for businesses to attract and retain workers. Strong, decisive intervention alongside the UK’s many world-class homebuilders is the key. The Prime Minister has called on business to respond and get building; she will get the answer she has asked for.

“On Brexit, it was important to see a continuation of the positive tone from the Florence speech. The next stage must be urgent action to agree the standstill transition with EU partners by the end of the year, and the shape of the final deal as early as possible in the New Year. Every day wasted is lost investment and new jobs not created.”

RIBA President Ben Derbyshire said "Earlier this week the RIBA awarded Neave Brown the Royal Gold Medal, architecture’s highest accolade, for his outstanding work in building high quality affordable housing, cherished by local communities. Social housing like this plays a vital role in ensuring that we have a society that works for everyone. While it’s good news that the Prime Minister has made fixing the housing crisis a central priority for the government, the extra £2 billion promised today just won’t meet the scale of investment needed to address decades of under-supply.

“The government spends billions of pounds a year subsidising private landlords because of a shortage of social housing. They need to dial up the approach and investment, moving beyond describing the problems and big rhetoric to delivering solutions and the investment that will make the difference. Warm words won’t put roofs over people’s heads; we need a concerted programme of public investment in new social housing across the country and that means spending a lot more than was announced today.”

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “We have long called for the state to use its balance sheet to make a direct contribution to housebuilding. The Prime Minister’s announcement of £2bn for this purpose is an important first step.”

pnorman@costar.co.uk

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