by Kieran Quinn
Many of us have direct experience of friends and family that aspire to own their own home but fail at the first hurdle due to the spiraling cost.
According to the latest census information, meeting housing demand will require the building of 245,000 new homes each year. This is 145,000 more than is currently being built per year. House building levels are now only slowly rising from the lowest level of activity since the 1920s.
This housing shortage has led to a massive increase in the price of housing, excluding many young first time buyers from getting their first foot on the property ladders
In 1997 it took an average family 3 years to save up for a proper deposit on a home, today this can take 22 years. Ed Miliband announced plans that go someway towards addressing this. The pledge to commit the Labour Party to increase the level of house building in the UK to 200,000 homes per year is a welcome step.
A key part of stimulating new house building will be to unlock capacity in small house builders.
25 years ago 2/3 of new homes were built by small builders, this has fallen to less than 1/3 today. The number of firms building between 1-500 units has also fallen from 12,000 to less than 3,000 over the same period. Labour’s “Help to Build” scheme will attempt to address this through improving access to finance by guaranteeing a proportion of bank loans to small house builders.
In the longer-term, the much anticipated report by Sir Michael Lyons will outline the policy options available in all areas to increase house building. These include:
– Releasing land for housing development and removing incentives by developers to hoard and speculate on land.
– Removing the barriers to investment (both public and private) in housing and related infrastructure.
– Investigating how a new generation of New Towns and Garden Cities can be built and sustained.
– How local authorities can be incentivised to cooperate in joint planning processes to build new housing.
– How the windfall gains from planning permission can be fairly distributed among the local community.
The council that I lead in Tameside is doing its bit to improve access to housing in the borough.
Despite being the 8th largest authority in Greater Manchester, we have achieved the 3rd highest level per head of New Homes Bonus.
– We have supported 50 first time buyers through our very own local “Lend a Hand” scheme in associated with Lloyds TSB.
– We have transferred or sold a number of sites to our local social housing provider, New Charter Housing Limited to provide affordable homes for rent. The 9 sites will provide space for 330 houses and provide the council with an estimated ~£320,000 a year in council tax and £2 million in New Homes Bonus.
Our “Empty to Plenty” scheme has worked with registered social landlords to bring 782 empty homes back into use by 2013.
At a Greater Manchester level we have fallen far short of the estimated 10,000 homes per year needed to keep pace with demand, achieving just an average of 3000 builds per year.
If we are going to scale up the pace of building decent homes and communities we need to continue to broaden the base of our funding mix. One good example is the partnership with the Abu Dhabi United Group , The multi-phased Manchester Life initiative, foresees investment of up to £1 billion over the next 10 years, with provision for further multiple investors. It will expand the residential market on the eastern fringe of Manchester, providing a platform for the delivery of more than 6,000 new homes.
Another mechanism to stimulate housing and community growth is to utilise funding from local government pension schemes, such as the one I chair. The 15 local authorities with the largest pension funds could provide up to £10 billion of pension funding to build mixed-tenure housing in areas of need. This could result in a more ambition building programme, creating upto 300,000 new homes every year and a return to investors in excess of 6%.
Let us become the party of the aspirant generation, get Britain building and have decent homes for all.
Cllr Kieran Quinn is the Labour Leader of Tameside in Greater Manchester. He is one of the Leaders of the Greater Manchester Combined Authority. Chair of the largest local Government Pension Scheme in the UK – Greater Manchester Local Government Pension Scheme.
Tags: general election 2015, Greater Manchester Combined Authority, Help to Build, house building, Kieran Quinn, Tameside council
The tories themselves reckon that just to hold house price inflation at wage inflation (which means staying as we are now basically) will require 300,000 houses a year for a decade over and above stock replacement for demolitions etc. Remember, if you build enough houses then prices only stabilise – to actually get them to decrease in real terms requires building a surplus and if you believe they are too expensive then a price decrease is what you support.
It’s all very well and good Miliband threatening developers over landbanks, but unless he lays into them from day one and seriously punishes them – confiscation without compensation, banned from local, regional and national developments including infrastructure and including even current maintenance projects etc etc then he is wasting his time. If he thinks just dropping hints and cajoling will make any difference then he is a grade 1 muppet. Big developers couldn’t give a toss what he thinks or says, only what he actually really does.