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Reaction: Government's housing strategy a 'good start'

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The government’s new push to tackle the homes shortage, Laying the Foundations: A Housing Strategy for England, has been broadly welcomed by the profession

The RIBA said it was ‘delighted’ that the strategy focussed on the quality of new-build homes as well as practical measures such as a £500 million Growing Places Fund and new-build mortgage indemnity scheme (see full strategy document attached). The institute was also pleased to have been invited to a Ministerial-led design summit to discuss the way forward for the strategy which includes a pledged to build up to 16,000 new homes with its £400 million ‘Get Britain Building’ investment fund.

The RICS hailed the announcment as a ‘a good start’ from the government and put housing at the top of the political agenda but added that ‘more detail’ was needed and ‘an opportunity missed to begin delivering real consumer protection’. 


Harry Rich, the insitute’s RIBA chief executive:
‘We have been pressing hard for more homes to be built in the UK and for these to be of high design quality. The government has listened and has given such prominence to design quality and the role of architects in driving good design within their communities and in delivering housing fit for the 21st century.’   

Lessons from Kickstart must be used to ensure the right type and quality of homes [are built]

‘In helping the delivery of more homes through public money, lessons from Kickstart must be used to ensure that the right types of homes and of the right quality are provided to last for future generations. Research has shown that many newly completed homes are failing to meet people’s needs – research that is used by the Government in its assessment of the current state of UK housing.
‘Community involvement is identified in the strategy as crucial to delivering new homes. Architects have the skill and expertise to provide support to communities and the RIBA welcomes the strategy’s commitment for the RIBA, together with other partners, to work with Government to look at how to provide that support.’

Chris Littlemore, chief executive of Archial:
‘These kinds of injections, alongside many others so badly needed for growth in the economy, are absolutely vital if the construction industry is to avoid further, lasting damage. Boosting house-building is a very tangible and practical way of increasing economic activity but only if there are other measures layered within this move as well – and it will be the detail that is critical.  

All of the proposed measures need to be overlaid with release of other constraints, such as the need for resolution to the new NPPF (National Planning Framework) and the Localism agenda. Expectations should also be tempered with the realities of the high risk of unemployment for many looking to gain access to the housing ladder and  the sheer affordability of, and commitment to, a higher or longer mortgage:  Central London prices are predicted to rise by 20 – 25 per cent from current levels by 2015, placing property - that is already way outside the normal multiples of mortgageability – even further away.
A quick straw poll of some of our housebuilding clients revealed that, while there is broad agreement that stimulating the first time buyer market is crucial to the market as a whole, there is a level of cynicism about the government’s mortgage guarantee scheme.  Unless the promised 95 per cent mortgages are offered at an affordable rate, people will still not be able to join the housing ladder. Our clients suggest the banks intend reducing the required deposit but are liable to boost interest rates charged – result, stalemate. I look forward to seeing how this is timed and delivered and how the major house-builders will seek to deliver more product rapidly.’

Michael Newey, a spokesman for RICS spokesperson:
‘We hope the proposals can go some way to boosting the stagnant housing market. Given its central role in driving economic growth, it is right that housing is now at the top of the political agenda.
‘Better access to mortgage finance is essential to bring forward the new homes needed to help more achieve their aspiration of home ownership, particularly first-time buyers. The New Build Indemnity Scheme is to be welcomed but care must be taken to ensure it does not distort the market or lenders affordability calculations. The focus on new build will not free up chains and may reduce demand for second hand property, putting those who wish to move but have little equity at a disadvantage. Whilst any attempt to stimulate supply and demand will help both consumers and developers, limiting funding to niche areas of the market in this way does not solve the wider need for adequate levels of funding in all parts of the market. Any new scheme must be clear and easy to understand for the consumer.
“Small to medium-sized developers will particularly welcome the Get Britain Building Investment Fund and the recognition of the key role housebuilders will play in driving much-needed economic growth. Further steps to free up public land for developers are encouraging but care must be taken that the land is in the right place with the right infrastructure. Projects must be properly analysed for viability otherwise developers run the risk of creating ‘white elephants’ that do not satisfy demand.
’However an opportunity has been missed to begin delivering real consumer protection and professionalism right across this rapidly growing sector. RICS is keen to work with other industry bodies to develop these proposals.

“This is a good start from the Government but more detail is needed.’ 

Key points of Laying the Foundations: A Housing Strategy for England

  • New build indemnity scheme led by the Home Builders Federation and Council of Mortgage Lenders to provide up to 95 per cent loan to value mortgages for new build properties in England, backed by a housebuilder indemnity fund
  • Proposals to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled
  • A new £500 million Growing Places Fund which will support infrastructure that ‘unblocks housing and economic growth’
  • A £400 million ‘Get Britain Building’ investment fund to unlock progress on stalled sites which have planning permission and ‘are otherwise shovel ready’
  • Freeing up public sector land with capacity to deliver up to 100,000 new homes - with Build Now, Pay Later deals on the table’
  • Encouraging more people individuals to build their own homes through a Custom Homes programme with up to £30 million of new funding to support provision of short-term project finance on a repayable basis.
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