Funding for New and Affordable Housing
The much trailed extra funding for new housing in the Autumn Statement didn’t disappoint in numbers, with billions of pounds pledged to deliver low cost homes and affordable rent across England. It is a step in the right direction recognised by those from across the political spectrum, with London Mayor Sadiq Khan saying that the £3.15bn set aside for affordable homes in London was “the biggest sum of money ever secured by City Hall to deliver affordable housing”.
So why did the share prices of the big housing developers fall immediately afterwards? It’s because the funding element, while vital, is a relatively small cog in the mechanics of housing delivery and unless the other parts, including local authorities approving planning applications and housebuilders delivering the necessary levels of affordable housing, are working effectively, we will not see the benefits of the funding as quickly as is needed. There is still a very big gap between what is said at Whitehall and what happens at the hundreds of Town Halls across England.
What the Chancellor gave with one hand, he partly took away with the other. Local Authorities now face further strains following the decision to increase the National Living Wage (NLW). Indeed, the Local Government Association produced figures that show the increase will cost councils at least £337m in 2016/17, as such some councils will continue to look to share workloads.
Perhaps the solution is devolution. The Chancellor said this week that “devolution remains at the heart of the Government’s approach to supporting local growth” and negotiations continue across England about new mayoral combined authorities. So it seems likely that we will see a rise in the merging of local authorities or even an increase in outsourced contracts to cope with public demand.
Developers will need to play their part to ensure the delivery of new housing and affordable homes and rentals by working with councils to meet need and contribution levels. Housing Associations meanwhile are already looking to increase the delivery of low cost rented housing following the flexibility announcement.