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 spiralling cost. The alternative of social housing is in short supply due to lack of build and increasing waiting lists. Many residents opt for the private rented sector which can be both expensive and is inadequately regulated.
According to the latest census information, meeting housing demand in the UK 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 large increases in the price of housing, excluding many young first time buyers from getting their first foot on the property ladders. It is particularly striking in the South East although the North West has not been immune from increasing property prices.
In 1997 it took an average family 3 years to save up for a proper deposit on a home, according to Shelter, today this can take 22 years. 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. “Help to Build” scheme’s should attempt to address this through improving access to finance by guaranteeing a proportion of bank loans to small house builders.
In the medium term we need 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. Giving councils such as mine more flexibility to borrow to invest will be helpful
– Investigating how a new generation of New Towns can be built and sustained, while protecting our cherished green spaces.
– How local authorities can be incentivised to cooperate in joint planning processes to build new housing. The Devolution deal between the Combined Authority and the Government is a clear example. The agreement includes creation of a £300 million Housing Investment Fund to accelerate the delivery of housing to provide up to 15,000 additional homes over 10 years. The spatial strategy being developed by all 10 Greater Manchester authorities will ensure that the housing needs of all areas are built into the planning process.
– 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 for Tameside residents. 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. We will escalate these schemes under the #15 for 15 pledges I outlined at Full Council before Christmas.
Our “Empty to Plenty” scheme has worked with registered social landlords to bring 78 empty homes back into use.
On 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. Together with the London Pensions Fund Authority (LPFA) the Greater Manchester Pension Fund (GMPF) has developed a joint allocation of up to £500m for infrastructure development. 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 ambitious building programme, creating upto 300,000 new homes every year and a return to investors in excess of 6%.
I and my colleagues are determined to tackle this priority and create decent homes for all.