12 December 2003
A Treasury-commissioned report on the state of the UK housing market has prompted calls for a £2bn funding boost to reverse the 'crisis' that has plagued the social housing sector.
Responding to the publication of banker Kate Barker's review of housing supply, Jim Coulter, chief executive of the National Housing Federation, endorsed the call for an increase in the supply of affordable housing. 'At current levels of investment, there is a dramatic shortfall of at least 42,500 affordable dwellings being produced each year,' he said.
'A cost-effective way for the chancellor to boost housing supply would be to prioritise surplus public sector land or selective greenfield land release for affordable homes.'
The Local Government Association also criticised the planning system for being too 'top-down' and hindering joint working at a local level.
Barker, a member of the Bank of England's Monetary Policy Committee, published her interim report to coincide with Gordon Brown's Pre-Budget Report. It found that as house prices have increased, housing supply has not.
In 2001, 175,000 new dwellings were built – the lowest since the Second World War – and over the past ten years the number of new dwellings built has been 12.5% lower than in previous decades.
Barker said it was clear that the housing market was not working as well as it should. 'In particular there is a problem of weak supply, with major implications for the UK's economic wellbeing and house price volatility,' she said.
Deputy Prime Minister John Prescott said the report helped develop understanding of the obstacles that needed to be overcome. 'We need to build sustainable communities, not soulless housing estates,' he added.
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