For the first time in recent history, Budget 2017 is being trailed as a housing budget. Rumours abound about what measures will or will not make it into the Chancellor’s final speech.
By David Orr, Chief Executive of the National Housing Federation
21 November 2017
Some things we already know. The Government, from the Prime Minister down, is now clear that we need a major new house building programme. Over the last couple of weeks the Government's stated ambition is to get to 300,000 new homes a year, every year for the foreseeable future.
And some, very helpful, decisions have already been made. The Prime Minister has promised £2bn of new money for rented homes, including genuinely affordable, social rent. A rational decision has been reached about rents, although in the medium term the real change we need is for the Government to withdraw from rent setting and leave that to housing association boards and local councillors. The removal of the threat of the Local Housing Allowance (LHA) cap is a huge step forward.
Underpinning all this is the ambition of housing associations to build an increasing number of new homes of all tenures and to create great places to live. All of this will help to see an increase in new homes.
It won’t, though, take us anywhere near 300,000 homes a year. One huge part of the jigsaw is still missing – land.
What do we need to build new homes? Access to money. That’s in place, although any additional investment in the budget will be very welcome. Materials and people to build. A challenge but deliverable, especially if we move to more homes being built in factories. But nothing happens unless we have the land to build on.
Of course we have no shortage of land. We just make it extraordinarily difficult to release it for building new homes. The debate about green belt continues. There is no argument that some of the green belt is not green. In some places, building well designed new homes would improve the appearance and amenity value of that land. But even if we park this debate, there are two things the Government can and must do if it is to deliver new homes in numbers not seen since Harold Macmillan was PM.
First, it must stop selling public land for the highest possible price. This is land already owned by the public and should be used for public benefit. The Government could set a sale price up front and sell it not to the highest bidder but to the developer who can add most social value: tenure mix, or quality of design, or energy efficiency, or environmental impact. Housing associations, of course, bring all this to the table.
Alternatively, the Government could set out clear requirements for a piece of public land: for social homes, or design quality, or energy efficiency. These would then have to be factored into the price, which would have the effect of reducing the price paid. In some cases the land might even be provided free or at reduced cost where there is clear public benefit to be delivered. For a government that demands evidence of value for money from its partners, this would deliver real value for the public.
Second, government at national and local level must be prepared to use compulsory purchase much more widely. Providing sufficient housing is economically and strategically critical to our collective future. If we decide a new road, or a new high-speed railway line, or a new power station is of strategic importance we ensure the land is identified and acquired. We need to do the same for housing. This, more than anything else, drove the success of governments in the 1950s and 60s in delivering over 300,000 homes a year.
We often talk about whether or not a budget has ‘landed’ with the public. This time, Mr Hammond, please make that a literal, not just metaphorical, reality. The nation needs you to deliver the land.