In Britain we love our houses, and a home of one’s own is a widely held aspiration, but in order to meet demand the industry estimates that we need to build 250,000 new homes a year, but we haven’t come close to that in decades.
A recent report by KPMG for Shelter, the housing and homelessness charity, maintains that failure to act will mean falling home ownership, and an economic recovery stalled by a volatile housing market. Rents will rise, and the cost of keeping a roof over their head will become unbearable for many more families.
The report also questions whether we are building what people actually want. The cost of land and a rise in single occupancy has led developers to build flats and apartments in preference to houses, but the report also expresses the opinion that people want houses with space for a garden, room to park the car and somewhere for the children to play.
New housing in the UK is not only expensive, but relatively small and often fails to meet aspirations. Our new houses are the second smallest in the EU, 25 percent smaller than the EU average and 40 percent smaller than Germany or the Netherlands. The European trend is for new houses to be significantly larger than the existing stock, but British homes are getting smaller – and half of all new dwellings are flats. These changes run contrary to consumer demands, with only three percent of the population wishing to live in a flat as their first choice.
Clearly not everyone can live in the home of their dreams, but new housing should be shaped by people’s preferences. We are social beings and prefer to live in communities. The social housing experiments of the 50’s and 60’s which moved people out of, admittedly often substandard, terraced homes where families had lived and worked together for many years into high rise blocks has resulted in fractured communities and criminal black spots. The early dream of “streets in the sky” soon turned sour.
In order to supply the kinds of homes people will take pride in will require not just space on which to build, but fresh thinking.
There is a problem that too little land has been allocated for new housing, despite soaring demand. Contrary to public perceptions, 87 percent of England remains open space and domestic buildings cover just 1.1 percent. Housing land is scarce because of a policy cocktail that combines over-regulation at the national level with a local government finance system that fails to reward local authorities that promote development.
Housing leaders are calling on the new housing minister, Gavin Barwell, to relax the rules governing the allocation of £7 bn of housing grant. David Orr, the Chief Executive of the National Housing Federation (NHF) outlined an offer to the government, saying that the housing sector will continue to build despite the current economic uncertainty, if the £2.3bn of government grant earmarked for Starter Homes and £4.7bn for the Shared Ownership and Affordable Homes programme was instead available for building homes of any tenure.
Developers want the flexibility to build homes for rental if market conditions worsen in the wake of the EU referendum result, making building homes for sale more difficult, currently the vast majority of grant available is for homeownership products.
Mr Orr said: “When we see the warning light flashing amber, we should not wait until it is red and things begin to fall apart.
“Our offer to government is this: there is £7bn from the last spending review available for housing, but it has lots of conditions attached. What we want to say is leave that £7bn and allow it to be used for building homes, but let’s take all the conditions away.
“Let’s not worry too much about whether it’s Starter Homes that come out of the ground. Let’s build the homes and then worry about the tenure.” He said the sector is a “big fan” of shared ownership, but “regardless of the strength of the economy there is demand for good quality, affordable rented homes”.
Mr Orr also said housing associations could deliver 33,000 homes for every additional £1bn of cash the government is willing to commit to housing, and produce economic benefits worth £3.5bn.
Terrie Alafat, chief executive of the Chartered Institute of Housing, agreed, calling on the government to extend the Affordable Homes Guarantees Programme and provide more borrowing freedom to local authorities. She said: “Above all we need to be doing this in partnership across the sector – local authorities, housing associations and the private sector.”
The appeals follow a report from theCentre for Economic and Business Research commissioned by the National Housing Federation, which predicts that the UK economy could contract by £145 million in the next 10 years if the rate of growth in new housing completions falls at the same rate as it did in 2008.