The government’s announcement this week of a new £8.6bn funding package to make home ownership a more “realistic and affordable” aspiration for tens of thousands of families is a welcome one. But the devil will be as much in the delivery as the detail.
Ahead of his keynote speech at this year’s RESI Convention, secretary of state for housing Robert Jenrick talked of the importance of “creating more opportunities for home ownership” and described the launch as a “landmark moment” that would “ensure good-quality housing for all as we build back better after the pandemic”.
They are fine words and at RESI, Jenrick will no doubt further opine on the significance of the initiative, under which 90 partnerships, made up of housing associations, councils and developers, have been tasked with delivering 57,000 homes for affordable ownership, 29,600 for social rent and 6,250 affordable rural homes, with the remaining homes for affordable rent. Ditto the government’s new First Homes scheme and its 95% mortgage guarantee scheme.
But doubts are already being raised over First Homes and questions will inevitably be asked about this latest initiative.
Part of the government’s £11.5bn Affordable Housing Programme, the £8.6bn package promises to deliver 119,000 new homes across the country, with £5.2bn awarded outside London by Homes England, while the Greater London Authority will oversee delivery of homes in London. So far so good, not just in terms of housing delivery but the levelling-up agenda.
But break the numbers down and they don’t look quite so impressive. Spread over the Affordable Housing Programme’s five-year life span, the 119,000 equates to 23,800 homes a year. Add to that half of the 1,500 new First Homes targeted by March 2023 and this rises to 24,550 homes a year in the next two years. Even widening the net to the entire 180,000 homes the Affordable Housing Programme aspires to, the figure only rises to 36,750 new homes a year.
That is not going to make much of a dent in the 300,000-new-homes-a-year target the UK is supposed to be hitting by the mid-2020s. Bear in mind that even in 2019, before the pandemic struck, NHBC only registered a total of 160,319 new homes (in 2020, that slumped to 123,151). Chuck in material shortages and accompanying cost hikes and even two thirds of the 300,000 target looks optimistic.
More than a statement of intent
At least this latest initiative is more than a statement of intent. The money has been allocated – hopefully we will find out to whom at RESI. The other big plus is that as with First Homes, the government is looking to work in partnership with others. In the post-Covid world, it has realised it cannot go it alone – a message local authorities would be wise to heed as many continue to come a cropper with their own housebuilding efforts .
Intriguingly, the new initiative could also see some much-needed affordability injected into the BTR arena. BTW, if any of the 90 partnerships want an idea of where to target, they need look no further than this year’s Hot Housing Index, which reveals the top 100 BTR investment locations.
With BTR and affordability set to be major talking points at this year’s RESI, it is an event you can’t afford to miss, but time and tickets are running out. To book your ticket now, go to resiconf.com. See you there!
RESI Convention takes place 8-9 September 2021, join Property Week and inspirational speakers as we deep dive into the key strategic issues that really matter post-crisis in ‘The Age of Responsibility’.