For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry
Finally, it seems housing has risen to the top of this Government’s agenda. At least that’s what it seems like from the talk, whether it was Sajid Javid talking about the Housing White Paper, or Housing Minister Alok Sharma speaking at this year’s BMF Members day event to the man himself, Chancellor Philip Hammond, telling TV’s Andrew Marr Show that the plan is to address affordability issues and build more homes, more quickly.
300,000 homes a year to be precise.
OK. Jolly good. That’s what we need. As a minimum. It might sound like a lot to those outside the industry, but “we” remember the Barker report of 2004 when economist Dame Kate Barker found that 233,000 to 285,000 new houses would be needed in England each year just to keep up with demand.
That was 13 years ago, before the heady days of 2006-2007 and the long, dark night of the soul that was the financial crash of 2008. (Wait, what? How can it be NINE years ago?!) We still use those numbers now, even though net migration (more) and household income (less) are not what they were then.
Only last month Dame Kate said that new housing policies need to be found to help buyers and renters or there will never be enough houses built to keep prices down.
It remains to be seen what the Chancellor will come out with later today, but the problem is that the housing mess/crisis/issue – call it what you will – cannot be solved/improved by a few pronouncements by a chap brandishing a red briefcase in Downing Street.
It’s easy for government to make announcements like the Prime Minister’s “More homes, more quickly” or the Chancellor’s 300,000 homes per year this weekend. It is not so easy to make it actually happen.
Planning issues, labour availability (particularly given concerns over possibly post-Brexit migration policies), affordability, all have their part to play in limiting the ability of the industry to deliver what the Government says it wants. And that’s before we even get to the thorny issue of material supply.
Construction at the moment is short of labour supply – skilled labour supply, with around 500,000 experienced workers likely to retire in the next 10 years according to some sources (always assuming they can afford to retire that is). However it is probably OK for materials supply, with the same sources suggesting spare capacity in both lightside and heavyside manufacture.
Alok Sharma told me at the BMF Members Day that the Government can’t solve the housing issue in isolation, that it needs the industry and local councils to play their parts. That’s all very well, but there needs to be the ability for industry and the willingness of councils (which is a whole other can of worms).
So, whether we get another stamp-duty rethink, changes to Green belt and planning rules, easing of the borrowing rules for councils, and extra help for Help-to-Buy, it will only be part of a solution to an issue that’s far more complicated.