Let's shore up the nation's economy, say CIH and NHF
The Chartered Institute of Housing (CIH) and National Housing Federation are calling on the government to back building by housing associations and local authorities to shore up the nation’s economy.
Early findings from new Centre for Economics and Business Research (CEBR) analysis suggest a construction slowdown may be on the horizon with shares in construction companies, exchange rates and financial markets all hit by post-referendum uncertainty.
The analysis also shows that a slow in house building similar to that of the 2008 recession would wipe out more than a third of GDP growth (£142.5 billion) and result in the loss of nearly 120,000 construction jobs by 2026.
Housing associations, which stepped in during the last recession, are calling for flexibility in existing funding to enable them to build 300,000 homes. Less exposure to market volatility meant that between 2007 and 2009 the non-profit housing association sector upped the number of homes it built by 22 per cent, while private development dropped off 37 per cent.
To do this, the sector wants government to relax restrictions on the tenure of homes – whether they are built to rent or buy - to allow housing associations to respond to the market. The sector has identified £7 billion of already planned funding, which could be used more flexibly; £4.7 billion for shared ownership and supported housing and £2.3 billion for the remediation of brownfield land for starter homes. For every further billion pounds that the government invests flexibly, the sector could build 33,000 homes.
Government should also offer councils a refreshed 'deal', the sector says, including flexibility in the caps that limit local authority borrowing for housing, in return for specific commitments on new supply, including better use of assets and of local authority-owned land.
It has already identified £300 million of extra borrowing for local authority housing, but this needs a better, more flexible, approach if local authorities are to build new homes, at scale.
Terrie Alafat, chief executive at the Chartered Institute of Housing said:
"There are already signs that the housing market is beginning to weaken. It is critical government takes action now to ensure the supply of new housing we need to address our national housing crisis does not falter. Local authorities and housing associations are not dependent on shareholder sentiment and are able to keep housing supply going when the private sector stalls without requiring extra government spending.
"Secure, affordable new homes transform lives, support local and national economic growth and create and maintain jobs, training and education."
David Orr, chief executive of the National Housing Federation said:
"The warning signs are flashing amber - house building may be set for a slowdown - but housing associations have a track record of building through tough times. Demand for good quality rented homes remains high.
"Today, the sector puts forward a plan of action for the Prime Minister to keep the nation building and tackle the housing crisis. It is a plan that comes at no extra cost to the taxpayer and one that will improve the life chances of hundreds of thousands of working people in this country. Uncertain times call for pragmatism and flexibility."