Why Don’t We Just… Build more homes?

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The UK requires around 300,000 new homes a year. Yet there are currently something in the order of 130,000 built – not even half what’s needed.

The last time we had a great housing boom was in the post-war reconstruction period of the 1950s and 1960s when there was a unified political agenda around housebuilding, backed by massive government subsidies.

Compare that with today when the government recently set its own national target of building 200,000 homes a year.

Although it claims “we are the builders” it’s actually committed to the ideology of home ownership. So for the first time since 1974 there is no public subsidy for affordable rented homes – but there is a slump in home ownership across Britain.

Simply put, we are not building more new homes because they are too expensive.

But focusing solely on home ownership isn’t the right solution. We need to look at housing in all forms of tenure, including shared ownership and affordable rent. We also need to get land supply back into the market, get planning permissions agreed and get builders building. That’s a fundamental problem to which there has been no solid response.

In Greater Manchester, with the devolution arrangements now in place, we have an opportunity to rethink housing and influence its growth. Everyone would like to get on to the housing ladder but people are often pinned back by the need for big deposits. If you consider that Greater Manchester has a median income of around £25,000 and even for an entry level home you would need a £10,000 deposit, home ownership isn’t an option for many people. We need better access into entry level homes without excessive deposits.

There are discussions underway between housing providers and the Greater Manchester Combined Authority to address such challenges.

It’s unlikely that more affordable rented homes will be provided unless subsidies from market sales or other public funds are put into the system. That means it’s up to organisations like housing associations to generate those funds through the better management of their own assets.

Homes are built the same way today as they were 50 years ago, yet without the same results. We can learn from Europe, particularly how to ensure the construction industry has the skilled workforce it needs.

How do we move forward? We need to look at everything in much smaller parts and build a strategy around it, not just one size fits all.  Devolution provides an opportunity to construct the jigsaw puzzle in the right way.

A national consensus on a long-term accessible and affordable housing supply is needed. But here’s the problem. A recent report by City Metrics analysed the increased take-up in benefit. While northern cities have a higher benefit dependency, work welfare take-up is doubling in places like Aldershot, Crawley, Reading and Cambridge. Why? Housing is too expensive, there’s not enough of it and rents in the private rented sector are increasing.

A reduction in welfare bills can’t be achieved without a housing solution. Housing is a problem for our economy. Without a solution to that the long-term economic plan won’t work.

Dave Power is group chief executive, One Manchester (onemanchester.co.uk)

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