Housing is in the news for all the wrong reasons
It might be the end of the summer holidays but it has been a busy season for housing in the news. CIH president, Robin Lawler, looks at why housing has been in the news for all the wrong reasons and how we are tackling the crisis.Well, August is supposed to be a quiet month, but housing is in the news for all the wrong reasons. The number of new homes being started and completed is at an all time low, mortgage approvals continue to fall, rents in the private sector continue to rise faster than earnings and homelessness is on the increase.
Mortgage repossessions continue to stay steady, but that may only be because lenders couldn’t sell on homes if they repossess them. I remember the Market Rescue package in the 1990s recession, which supported housing associations to take repossessed homes off the hands of lenders - a position banks and building societies are anxious to avoid in this recession.
It is unclear what the more generous Right to Buy discounts will do to increase the total number of social homes - even if the receipts can be re-invested locally. The Policy Exchange report published last week proposing selling social homes that are higher value than prevailing local market values feels at best like tinkering at the margins, and at worse could threaten established mixed communities.
The UK economy continues to shrink rather than grow, against the expectations of the Chancellor and the Bank of England. This is a concern when the government is preparing for the next spending review, which could begin as early as this autumn in a period of unprecedented economic and fiscal uncertainty.
Increased government borrowing and declining tax revenues is a dangerous cocktail - and one that undermines their willingness to invest in housing, particularly increasing the number of new homes being supported and funding for the Decent Homes backlog programme.
So this feels very much what it is – a housing crisis. So what are we at CIH doing about the crisis?
Firstly, we are measuring and reporting key metrics in the housing market, so that we truly understand the scale of the problems we face. We work hard to avoid being deflected from this resolve by think tank reports and government initiatives at the margins of housing.
Secondly, we continue to work with other key stakeholders to make the economic case for investment in housing. More investment is retained in local economy from spending on housing, but poor or insufficient housing acts as a brake on economic growth. If Government changes its approach to investment, CIH wants the housing sector to be ready to accept and deliver new homes. We are lobbying government for guarantees as a way of levering new investment.
Thirdly, we are working hard to prepare the sector for welfare reform in order to mitigate the impact on social landlords and their tenants. We need to identify and articulate the impact on communities from reduced levels of benefit support.
Fourthly, CIH continues to research and share best practice on making best use of existing homes - even more important when new supply is constrained.
CIH needs to continue to be steadfast in its analysis of housing supply and demand. But more than that we need to work with other stakeholders to develop new approaches to housing investment in addition to seeking increased government financial commitment.
The autumn could be a crucial time for government decisions on housing investment so watch this space!