Supply and demand – fixing the housing crisis
In January this year, the Regulator of Social Housing was borne out of the ashes of the Homes & Communities Agency. The new editor of Housing Association magazine, Victoria Galligan, asks: what has been done so far in 2018 to increase the number of social and affordable properties available?
There’s no doubt that demand for affordable housing has far outstripped supply, especially over the recent years of austerity. And with homes being taken out of local authority control through disposals, Right to Buy (RTB) sales and town regeneration schemes, the need for new social housing has arguably never been so high.
RTB sales increased from 2,638 in 2011/12 to 11,465 in 2017/18. The Government recommends that replacement housing for RTB properties sold should be done on a one-for-one basis – or two for each property sold in London, in some circumstances.
In the six years from 2012, the total number of dwellings started on site or acquired by the Greater London Authority, and the Homes & Communities Agency was 17,911 – an average of less than 3,000 per year.
The National Housing Federation states that housing associations completed an overall 41,556 new homes in 2017/18 (a 9% increase compared to 2016/17). However, around half of those fell outside the affordable housing bracket and the federation has forecast a decrease in completions over the coming year, with the rate of properties started 9% lower than the previous year. Although starts in social rent, it found, had increased on last year.
Photo: Flyby Photography / Shutterstock.com
At the end of October, Chancellor Phillip Hammond announced the government’s Autumn Budget. He pledged a further £500m for the Housing Infrastructure Fund, to unlock a further 650,000 homes, and announced the next wave of strategic partnerships with nine housing associations to deliver 13,000 homes. Mr Hammond also announced a £1bn boost to support the revival of SME housebuilders. Simplifying the process for conversion of commercial property into new homes was also on the agenda.
Scrapping the Cap
There was another glimmer of hope at the Conservative party conference following the Prime Minister’s announcement that the lending cap will be lifted. Yet Eamon McGoldrick (pictured on title page), managing director of the National Federation of ALMOs, told Inside Housing that questions had been raised by Theresa May’s announcement: “Exactly when will the borrowing caps be scrapped? This may need legislation. If it does, how long will that take? This was such a well-kept secret that we have no idea how Chancellor Philip Hammond views it – or whether he was even warned it was coming – and we’ll be looking closely at his autumn budget at the end of October for any signs of strings attached to new housing revenue account borrowing.
“Borrowing will be for new-build only is my basic assumption; for the creation of brand-new homes rather than to acquire, remodel or refurbish existing properties. Harder to predict is the mix of tenure the government might demand. Will local authorities be able to build only homes for social or affordable rent, or will they have to include homeownership products?
“Most importantly, will right-to-buy continue unchecked? Will local authorities end up borrowing only to be obliged to pass new homes into private ownership, taking the double hit of lost stock and lost rent receipts that would fund borrowing repayments?
“The Prime Minister suggested that lifting the cap might put 10,000 more new homes a year into the mix. It sounds a lot, but it won’t halt the current steady decline in social housing through disposals, right to buy and regeneration schemes.”
Social Housing Green Paper
Meanwhile interested parties in the housing industry have until November 6 to respond to the social housing Green Paper, which aims to “rebalance the relationship between residents and landlords, tackle stigma and ensure that social housing can be both a stable base that supports people when they need it and support social mobility”.
Nick Sedgwick, director of service development at Hanover housing association told Housing Association Magazine: "There is much to applaud around what the Green Paper aims to achieve, particularly around improving resident engagement, how to go about increasing supply and ensuring homes are safe and good quality. In tackling these issues we’re keen that the Government learns from existing good practice, works with the sector to develop solutions and does not impose regulatory burdens that may have limited impact.
"Hanover has long advocated that social homes should be future-proofed to help support residents to live sustainable lifestyles and reflect their changing needs, engaging customers to help drive us to do more and to continually improve what we do.
"We know from talking to our customers that they want a greater voice in their housing and services. We are supportive of any measure which strengthens the role residents can have in helping to build a safe, welcoming and innovative community environment in which they live."
Rise in homelessness
Homeless charity Crisis blamed a “decline” in social housing for a 60% rise in the number of homeless families and individuals placed in temporary accommodation compared to 2012 figures – up to 78,000 last year. The Crisis Homeless Monitor report stated: “The number of homeless households placed in B&Bs – which are often cramped, unsuitable, and sometimes even dangerous – rose particularly quickly, with a 10% rise on the year. If trends continue as they are the research reveals that 100,000 households will be living in B&Bs, hostels and other temporary accommodation.”
With the potential for councils to build an extra 10,000 properties a year following the lifting of the lending cap, but RTB sales on the rise, it’s clear that the increase in the number of social and affordable housing properties which are so badly needed will struggle to be met. Recent efforts to boost the number of affordable property sales through shared ownership should be applauded but the question remains: as a society, are we doing enough to house the most vulnerable in society?
Housing Association Magazine editor Victoria Galligan can be reached by emailing email@example.com. For advertising enquiries, call 01827 301185.