The Chartered Institute of Housing (CIH) and Local Government Association (LGA) respond to the latest housebuilding figures and reclassification of housing associations announcement.
New figures from the Department for Communities and Local Government show that annual housing supply in England amounted to 217,350 net additional dwellings in 2016-17, up 15% on 2015-16 and 3% below the 2007-08 peak of 223,530.
Chartered Institute of Housing Head of Policy Melanie Rees said: “We need a swift and significant increase in new homes to get to grips with our national housing crisis, so these numbers are very encouraging — it looks like we are making genuine progress. However, it’s vital that we keep up the momentum. We know we need around 250,000 new homes a year in England to meet demand and start to tackle the chronic shortage that has built up over the past few decades, so we are still some way short of where we need to be.
“To truly tackle our national housing crisis, we need all parts of the industry firing on all cylinders – that means private developers, local authorities and housing associations. And it’s not just about building more homes, it’s about building more affordable homes for people on lower incomes. Next week’s Budget is a chance for the Government to build on the steps it has already taken to boost the number of new homes for genuinely affordable rents.”
The new figures come as Prime Minister Theresa May has pledged to take personal charge of the Government’s response to the housing crisis. Meanwhile the Office for National Statistics has confirmed that English housing associations will be reclassified as private non-financial corporations, moving their debt off the national balance sheet. Melanie added: “Although we have been expecting this decision for some time, it is welcome news. It’s important that housing associations retain their independent status, not least because it means they can secure significant amounts of private finance to bolster public investment in housing.”
Melanie said: “It’s encouraging to see that ministers are backing housing of all tenures, particularly more social housing.”
Responding to latest housebuilding figures, and DCLG’s housing announcement, which proposes to take housing associations’ debt off the balance sheet, Cllr Martin Tett, the Local Government Association’s Housing spokesman, said: “While today’s housebuilding figures are encouraging, we are still significantly short of the 300,000 homes we need to be building each year. The last time we hit that number, in the 1970s, councils built more than 40% of them.
“There is no way to solve our chronic housing shortage without a renaissance in council house building. For that to happen, councils must have new freedoms to invest in new housing that would quickly generate huge returns for public services and local economies. If councils were free to borrow against their housing assets, they could build the homes that our communities desperately need.
“Councils are serious about delivering the right kind of homes, supported by infrastructure, for our residents, and are playing their part – approving nine out of 10 planning permissions. Instead of trying to manage councils from Whitehall, we would all be better off with an approach that is mutually agreed by the sector to tackle challenging planning decisions.
“The Chancellor has an opportunity to go down in the history books as the Chancellor who allowed an entire generation of affordable homes to be created, by allowing councils the freedom to borrow to build. We encourage him to take this opportunity in the Autumn Budget next Wednesday.”
“It is vital that the Government also lifts the cap on the amount councils can borrow to build homes and remove that borrowing from contributing to the national debt. That is essential to provide a sustainable long-term financial framework for councils to invest in desperately-needed new homes.
“All social housing must be treated the same and council housebuilding must be part of the solution if we are to stand any chance of solving our chronic housing shortage.
“As a nation we need to build more than 300,000 homes a year, and we’re currently building roughly half that. The last time this country hit that number, in the 1970s, councils built more than 40% of new homes.
“We have no chance of housing supply meeting demand unless councils can build again. For that to happen, the Chancellor needs to use the Autumn Budget to let councils borrow to build again.
“It is also important that housing associations continue to work with councils to provide the genuinely affordable homes our communities desperately need.”