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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

UK Housing Review 2018: the Welsh perspective

21/03/2018


CIH Cymru policy and public affairs manager Matt Kennedy says this year's UK Housing Review paints a positive picture of housing supply in Wales.

From a Welsh perspective this year’s UK housing review made for relatively positive reading, despite an overall picture which shows a worrying shift as the proportion of spending by the UK government on housing benefit continues to increase – dramatically so since a few decades ago.

The Welsh Government has set out an ambitious 20,000 affordable housing target to achieve during the fifth Assembly. We know that supply strikes at the heart of the housing crisis in Wales and given that the previous target was exceeded by 15 per cent, the ambition of the new target has been broadly welcomed by all elements of the sector. This target would see house building rates return to levels not seen for decades.

Investment in the sector has been growing and is showing its strongest level since the economic crash in 2008. Net housing capital investment by local authorites and housing associations in Wales, in cash terms, is at its highest ever and has breached £400m for the first time (£414m). Including private finance it has breached £600m for the first time.

This is having a positive impact on supply and the prospects for achieving the affordable homes target. Local authorities are forecasting the completion of 3,000 homes in 2017/18: if this is achieved, when added to the previous year’s output it will still leave around 8,500 to be delivered over the remaining three years. With the raising of the budget for social housing grant in 2018/19, this looks achievable. Housing associations are close to achieving their share of the target, but councils will need to double their output to achieve their (much smaller) share.

We know that this challenge is very much on the radar of the Minister for Housing and Regeneration Rebecca Evans as she recently revealed talks are on-going with colleagues in Local Government to transfer Housing Revenue Account borrowing capacity between councils.

The review shows that the right to buy policy has resulted in a huge loss of homes from the social housing sector. Between 1980-2016/17 2,609,150 homes have been sold through the policy and in Wales, this amounts to 139,737.

Revealingly, the review tells us that in the last 10 years in every age group the proportion of households buying with a mortgage has fallen. We know that the challenge for those aspiring to own a home will only increase as intergenerational equity reduces as the prospect of homes being passed on through inheritance, or money to finance a deposit reduces. This is clearly something concerning governments across the UK, and in Wales the Minister recently announced two new initiatives aimed at supporting first time buyers through Rent-to-Own and Shared Ownership Wales initiatives.

Whilw there’s a divergence in the approach taken across the UK to addressing homelessness Wales continued to perform well in terms of preventing homelessness. In 2016/17, almost two-thirds (62 per cent) of households assessed as ‘threatened’ (5,718 of 9,210) had had their homelessness successfully prevented, according to official statistical returns, while a 41 per cent success rate (4,500 of 10,884) was recorded by local authorities in homelessness relief cases. As expected, the number of priority need households in Wales is now much lower than statutory homeless acceptance levels under the pre-2015 system.

While the review paints a positive picture on the housing supply front in Wales, we know that investment from the EU has also played an important part in boosting capital (and also revenue) investment – something which will clearly be affected by Brexit. Add to that the need to deliver carbon-neutral/energy positive housing, provided at levels where rents continue to be affordable to those in receipt of housing benefit and on low incomes and that these homes are delivered at pace – the challenge in ensuring quality and accessibility remain at the heart of the sector will continue to be a substantial challenge.


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