London social housing providers call for extra no deal Brexit funds

27 Feb 19

Housing associations, councils and the mayor of London have called on the government to hand over £5.2bn to protect housing in the capital against the impact of a no deal Brexit.

In an open letter to housing secretary James Brokenshire, published this morning, the signatories warned that crashing out of the EU without a deal would be “catastrophic” for affordable housing in the capital.

The £5.2bn would support the 30,000 homes planned for the capital over the next 18 months, the joint letter - signed by the London mayor Sadiq Khan, Darren Rodwell, executive member for housing and planning at London Councils and Paul Hackett, chair of housing association membership group G15 - said. 

“As representatives of organisations committed to tackling London’s housing crisis by building many more council, social rented, and other genuinely affordable homes that Londoners need, we are deeply concerned about the impact that a no deal Brexit, or a Brexit deal that is bad for the capital, would have on London,” the group stated in the letter.

“Both would impact heavily on a very wide range of business and communities, with a ‘no deal’ exit being particularly catastrophic.”

They added: “Housing and construction are two key areas that would be affected, and ongoing growing uncertainty around Brexit in recent months is already having an impact on these sectors.”

The £5.2bn would also allow for the conversion of an additional 9,000 homes from market sale to social rent, they said.

A no deal Brexit would likely cause issues with accessing material and workforce levels – many people working in the construction industry are from Europe - the social housing providers warned. 

The signatories noted that private home builders are “holding back” on starting new projects, which in turn will lead to a loss of affordable housing, given that around 20% of affordable supply is generated by developer contributions.

“We have calculated that to compensate for lost cross-subsidy form market sales, and to adequately de-risk housing associations and council programmes, emergency grant investment – of around £5.2bn in the event of a no-deal Brexit – would be required,” the letter said.

Khan, Rodwell and Hackett said they were “very concerned” that the government’s approach to immigration is making Europeans feel “unwelcome” leading to a dearth of key European construction sector workers.

“London has a unique reliance on a non-domestic construction and technical workforce required to design and build new homes. Over half are currently non-UK nationals, and many builders, architects, engineers and specialist construction businesses are already reporting the loss of key staff who are returning overseas,” it said.

According to the letter, 60% of imported construction materials come from the EU and 92% of softwood timber used in the UK comes from the EU.

It said: “In the event of a no-deal Brexit the government would almost certainly need to assume control of materials supply chains to keep construction moving.”

A Ministry of Housing, Communities and Local Government spokesperson said: “The government remains confident that it will secure a good Brexit deal with the EU. Our ambitious £9bn affordable homes programme will deliver 250,000 homes by 2022, including 116,000 in London.

“We have also pledged over £58m to councils to assist their Brexit preparations and providing regular communications to local leaders so they are kept well-informed.”

Read Neil Merrick’s feature for PF on the whether councils can lead a council housebuilding renaissance.

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