DC and GO

We are the builders now: A view on the Cameron-Osborne Housing Legacy

We are the builders now – a view on the Cameron-Osborne Legacy

A shorter version of this article was first published on the Times Red Box on 1 August 2016: http://www.thetimes.co.uk/redbox/topic/tory-policies/debunking-the-myth-camerons-housing-legacy-is-the-strongest-for-a-generation

 

Britain’s new Prime Minister, Theresa May, inherits a golden platform for housing. The strongest housing legacy of any incoming government for over 35 years: we are all builders now.

Under Prime Minister Cameron and Chancellor Osborne there was a quiet revolution in housing. There have long been calls for a structural step change that would allow a continuous improvement in housing delivery, housing supply and better utilisation of housing stock. A move to a longer term housing system capable of gearing up to deliver increased housing supply to meet the Nation’s housing wants and needs.Building Blocks 4

The Cameron-Osborne programme set out to make that structural step – including the better use of existing stock. With their Coalition partners and then under the Conservative Government, Cameron and Osborne matched financial commitment with root and branch reforms across all parts of government which impact on housing. This included planning, public finances, local government finance, local government powers and the Government’s entire public land estate.

A key part of the Cameron-Osborne programme was giving back control to councils. In the ‘humpty-dumpty’ post-recession world, Cameron and Osborne were in no doubt that Central Government by itself could not fix that which was broken. A recovery which worked for everyone needed to devolve power to enable the delivery of local solutions across the UK. This included money, direct access to billions of pounds which could be borrowed directly by Councils for housing, growth and community building through the Housing Revenue Account settlements and Prudential Borrowing.

There has been a wholesale reform of planning through the introduction of the National Planning Policy Framework (NPPF). The architect of these planning reforms, Greg Clark as Planning Minister had just returned to DCLG as Secretary of State. The NPPF is helping Councils and housing businesses alike understand what housing is needed and where. Action has been taken on empty homes, the better utilisation of existing social housing stock and to keeping Britain building.

These root and branch reforms of housing are working. Britain has more fuel in its housing tank than at any other recent time. Housing Dashboard 2Planning permissions are at an eight year high with over 475,000 in stock at the beginning of 2016.  Over 200,000 additional homes have been added to the VOA’s council tax base in the year to March 2016. Empty homes are at the lowest level on record.

 

Undoubtedly the flagship Help to Buy scheme has been a key driver to this housing success. Often mis-analysed as a demand side boost, the original Help to Buy scheme was a supply side boost to address the immediate challenge that volume housebuilders faced. This was that new buyers did not have the higher deposits necessary to secure a mortgage following the credit crunch. The Help to Buy scheme ensured that builders had the confidence to continue to build new homes knowing that the homes would be within the reach of buyers.

When we are looking at the housing picture and the housing need and supply, it is a fairly complex picture. It is made up of a number of elements – not just housebuilding but also net housing supply, how we are using property, driving the more efficient usage of property and ensuring fair access and affordability.

For example, in 2007/08 we had a net housing supply of over 200,000 a year but 2008 was the year when there was also the highest number of empty homes. The number of empty homes has fallen by 120,000 – it has now become the lowest number on record. That’s 120,000 homes put back into use. It underlines the importance of a more balanced housing programme which seeks to use housing stock better as well as building.

Another overlooked achievement in the Cameron/Osborne years is social housing. The evidence belies the political rhetoric. Prime Minister Cameron oversaw the only net increase in the number of households in social housing of any of the last 5 Prime Ministers.

The last two full reported years to 2015 saw the higcam os social housing 2hest numbers of households in social housing for more than a decade. While social housing housebuilding data suggests that social housing performance remained fairly constant over the long term rather than outstanding, the housing association sector had made the case that it believes its own performance to be much stronger.

Housing associations are not alone in wondering whether housebuilding data is underreported. The often cited annual housing completions data depicts a modest recovery of 152,000 homes delivered in 2014/15 compared to 133,000 in the post recession lows. However, housing completions are a trend indicator rather than a complete picture of new housing supply. A fuller picture is provided by DCLG’s net housing supply in England. This is released annually with a much longer data collection time. It also includes new builds, conversions, demolitions and is a better indicator of the overall change to housing supply.

According to net housing supply, in 2014/15 an additional 174,000 homes were delivered in England alone. Taking into account new builds in Northern Ireland, Scotland and Wales, it may be that close to 200,000 additional homes were delivered in the UK last year. This is a remarkable achievement. It puts the ambition of providing one million new homes by 2020 within arm’s reach. This picture is confirmed by the Valuation Office, which recently reported that 200,000 additional homes had been added to the council tax base in the past year.

Britain is building again. The policy of engaging across all markets with a broad range of participants of councils, housing associations, developers, investors and government has delivered more homes. Prime Minister Cameron and Chancellor Osborne can hold their heads high. cam-os 5

More than 750,000 homes had been built during their term of office already, with final figures to be released in the coming months. Housebuilding starts are more than 100% above the low point of March 2009. A strong record of housing delivery.

Inheriting strong housing policies will help Chancellor Hammond and Prime Minister May continue to work towards the Government’s one million homes by 2020 target. But, the timing of the Cameron-Osborne departure occurred just as they had set a firm course to deal with another economic legacy issue – the imbalance between home ownership and private renting.

To keep Britain building, Hammond will need to steady the global financial markets and continue with Help to Buy and other interventions. The previous government had dipped a toe in the water for building directly commissioned by government and was supporting the development of construction and other skills academies, encouraging off-site manufacturing, re-invigorating estate regeneration and nurturing the return of smaller builders.

To counter the short term Brexit impact, the new government will need to accelerate the pace of change for these critical areas.

Useful Sources:

UK Government: Elphicke-House Report 2015

HMT Autumn Statement 2015

DCLG 211: Housebuilding: Permanent dwellings started and completed by tenure, United Kingdom (Quarterly)

English Housing Survey – Annex 1, Table 1.1: Tenure Trends 1980 to 2014-15

DCLG Table 209 Completions (annual)

DCLG Table 208 Starts (annual)

DCLG Table 120 Net Housing Supply

DCLG Table 213 England Starts & Completions (Quarterly)

DCLG Housing Statistical Release March Quarter 2016

DCLG Empty Homes Press Release 28 April 2016

DCLG Dwelling Stock Statistical Release, 28 April 2016

LGA planning permission press release: 7 January 2016

National Housing Federation (members’ data)

Valuation Office Agency ‘Council Tax Stock of Properties 2016’ 30 June 2016