Housing: government must avoid tenure trap

9 Oct 15

Housing is a political priority for the government, but it is vital that ministers do not just focus on homes to buy. Boosting supply across all tenures can help people choose the right option for them at a price they can afford.

Whatever your industry, you always hope to see it high on the political agenda – sometimes to no avail – but it’s no exaggeration to say that housing was at the heart of the debate at the Conservative party conference this week. George Osborne’s mantra was ‘we are the builders’ while David Cameron proclaimed: “We need a national crusade to get homes built.”

That focus is very welcome. In England we are currently building fewer than half the homes we need to keep up with our growing population, and the result is a housing crisis in which millions of people are struggling to access a decent home at a price they can afford. We are going to need real political will and leadership if we are to have any hope of tackling that crisis within a generation.

We know the government is committed to boosting housing supply – housing minister Brandon Lewis has said that building one million new homes by 2020 would be a success. But it is also abundantly clear that ministers are focused on one tenure in particular, and that is home ownership. The centrepiece of David Cameron’s speech was the (re)announcement of the Starter Homes plan, which will see new homes being offered at a 20% discount to young first-time buyers. Crucially, section 106 rules will be changed so house builders can now include starter homes as part of new developments rather than affordable homes for rent. We know that millions of young people desperate to take their first step on the housing ladder are unable to do so because of the cost of buying a home, so it’s positive that the government is looking at ways to help first-time buyers. But what about people on lower incomes who can’t afford to buy, even with a 20% discount? We desperately need to increase the total number of homes being built, but there is a risk that this policy will do little to achieve that – it is simply replacing one type of home (affordable homes to rent) with another (homes to buy).

Cameron also announced that the government has accepted a proposal put forward by the National Housing Federation which will allow the Right to Buy for housing association tenants to go ahead. The arrangement recognises that housing associations are independent – and in many cases charities – and may help avoid the risk of the sector being reclassified – although that is by no means a guarantee. It could also provide more flexibility than might otherwise be the case. Like many others, we are waiting to see the full details – full compensation for housing associations will be absolutely vital if they are going to be able to build more affordable homes for people who can’t afford to buy.

The government has said the policy will be funded by the sale of empty high-value council homes. If affordable housing is being sold, it is absolutely crucial that it is replaced on the same terms. Without extra funding, we fear this may not prove to be the case.

A more affordable private rented sector – with improved standards – is also vital for a housing system that works for everyone. On Monday I chaired a fringe event organised by Westminster Council on the theme of delivering affordable housing. Brandon Lewis acknowledged the role the private rented sector has to play in London, particularly in recognising the housing aspirations and job mobility of young people aged 25 to 35. Many of the speakers – including deputy mayor Richard Blakeway, councillor Daniel Astaire and Ben Rogers of the Centre for London – highlighted the need for more ‘intermediate’ housing, such as homes for shared ownership, and products like rent to buy, to help people ‘stuck in the middle’ (those on incomes of £25,000 to £85,000). These are people who don’t have the level of need and vulnerability to qualify for social housing, but for whom home ownership is increasingly out of reach.

We are also failing to provide for people on the margins of our housing system. Almost 14,000 households were accepted as homeless in England between April and June according to the latest figures, and there has also been a big jump in the number of people trapped in bed and breakfast accommodation, including more than 2,500 families with children.

For me, the discussions reinforced my belief that in the long-term, the best way of creating a housing system that works for everyone is to invest in homes of all tenures, so people can choose the right option for them at a price they can afford at any point in their lives. Housing has a huge impact on people’s lives, our society and our economy. Ultimately, if we don’t offer something for people on all levels of income, we will pay for it elsewhere. 

  • Housing is a political priority for the government, but it is vital that ministers do not just focus on homes to buy. Boosting supply across all tenures can people can choose the right option for them at a price they can afford
    Terrie Alafat

    Terrie Alafat is the chief executive of the Chartered Institute of Housing

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