Government should ensure housing Budget pledges go to right homes in the right places 

23 Nov 17

We need more than the measures announced in yesterday’s Budget to solve the housing crisis, says the Chartered Institute of Housing’s Melanie Rees.

There was a strong feeling that housing would feature heavily in yesterday’s Budget and so it proved.

This year’s Spring Budget contained so little on housing that we didn’t even produce our usual briefing for members.

Months later the Budget statement has its own chapter on housing.

We shouldn’t underestimate the significance of this.

That the last two major events in the political calendar – the Budget and the Conservative Party Conference – have both had housing announcements as their showpiece tells you the government is taking this very seriously.

And it does feel like we’re having a very different conversation about housing to the one-sided one we’d become accustomed to in the not so distant past.

So what about the housing announcements in the Budget? Well, it’s fair to say our reaction was mixed.

On the one hand it was very welcome to see a renewed commitment to build new homes – with a pledge to build 300,000 a year by the mid-2020s a particular highlight.

On the face of it new funding which brings the total spending on housing to £44bn over the next five years is also welcome.

Though the detail here is important in terms of how much is actually new funding and how much is capital funding as opposed to other financial instruments.

But there is of course a bigger question here – what is the funding for?

This is not just a numbers game; it’s about making sure that we build the right homes in the right places and that people can afford them.

In this sense we were a bit disappointed not see more in the way of committing to more direct investment in affordable rented homes – in particular the homes at social rents that Theresa May has repeatedly recognised we need.

These are of course the only truly affordable option for many people and we’re losing them as a result of right to buy and conversions to higher rents at a time we need them the most.

We did see some encouraging movement for councils.

It’s really clear that if we’re going to build the homes we need then our councils are going have to play a major part, so the lifting of the borrowing cap for councils in high demand areas is a welcome move.

But we hope this is just the start of a series of measures to support councils and that the government considers removing some of the other long-standing barriers to council house building, including restrictions around right to buy receipts.

Meanwhile the government listened on universal credit, announcing a reduction in the wait time from six to five weeks and providing other support to help people through the transition onto the new system.

Again though this doesn’t go as far as we would have liked, as some of the issues with universal credit which are causing hardship are administrative glitches and other problems associated with its practical delivery.

We still think the rollout of universal credit should be paused so that the government can learn lessons and get this crucial reform right.

Among a raft of other announcements we were also pleased to see the chancellor recognise the struggles of many people stuck in an increasingly expensive private rental market.

In particular it was pleasing to see a boost to Targeted Affordability Funding to plug the growing gap between local housing allowance rates and actual rents in areas which are hit particularly badly.

Though again the only long-term solution to this problem is to undo the freeze on local housing allowance rates and find a sustainable way to calculate them.

And the revelation that the government will run a consultation on longer-term tenancies to give renters more security is also a welcome development and one we have previously called for.

We have to view yesterday’s Budget in context.

The economic situation is such that we were never likely to see significant borrowing to fund housing in the manner the communities secretary had outlined in the run up to the Budget.

So in such a climate, and with Brexit continuing to dominate in Westminster we should be pleased that housing featured so heavily.

But even with Brexit as a backdrop there is still more the government can do to get us building more of the right homes, in the right places and make sure that people can afford them.

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