The government is
being “more practical” about the National Housing Federation’s call for a
massive new social housing construction funding settlement.
This summer the NHF,
which represents the country’s housing associations, asked for £12.8 billion a
year for the next decade to tackle the government’s housing target of building
300,000 new homes a year.
“We are ambitious on
supply. We need to build a lot more houses: 300,000 homes a year is a pretty
conservative estimate of what we need,” says NHF chief executive officer Kate
Henderson at the Housing Market Intelligence conference in London.
The NHF believes
that a figure of 340,000 homes a year should be the target, including 140,000
social housing units, of which 90,000 would be available for rent, and the
private sector meeting the balance. “We need more money
from government. There has to be a funding settlement,” added Ms Henderson “We
invest £10 billion a year in roads and you have to look at homes as
infrastructure.
“Over the last 18
months, the environment has changed a lot for housing associations in terms of
policy and funding.
“Under Theresa May,
we saw more funding for social housing. What we have seen in the last couple of
months since Boris Johnson came in is another change in the environment.
“The response has
been more open. It’s much more practical.”
The NHF believes
that the cross-subsidy model, where social housing is partly subsidised by
profits from selling new homes is limited.
Faced with a
downturn, London & Quadrant – the biggest housing association – recently
put its housebuilding programme on hold.
Under the new NHF
proposals, 44% of the cost of grant-funded homes would come from government
funding. The NHF wants the
funding to start in 2021.
In the wake of the
Grenfell tragedy, new public housing slowed as resources were diverted into
repair and maintenance.
To counter this, the
NHF also wants to create a Building Safety Fund. Ms Henderson adds: “Grenfell
revealed an absolute failure in the building safety system in this country. We
are tackling cladding, but what lies beneath the cladding? There will be a decade
long programme of remediation.”
Instead of diverting
resources from new build, a new fund would bankroll this programme.
Despite money going
into repairs, social housing construction has recently outperformed
expectations.
While private
housing starts fell 8% in the quarter to August 2019 according to the National
House-Building Council, there was a 4% rise in social housing starts.
Glenigan expects the
underlying value of social housing construction project starts to edge up 2%
this year.
Glenigan’s economics
director Allan Wilén said: “Overall the value of detailed planning approvals
for affordable housing projects stabilised last year. This is expected to
support a modest improvement in affordable housing project starts during 2019
as projects reviewed in the wake of the Grenfell tragedy start on site. “
This improvement is
gaining pace. In Q3 2019, social housing project starts rose 14%. If the NHF
settlement is agreed, the sector could boom.
