Appetite for construction
Author: Steven Howell, in the MJ |
The cost of housing has skyrocketed. This, as Rafa Benitez became infamous for saying, ‘is a fact’.
Shelter recently demonstrated that if food prices had risen at the same rate as house prices since 1971, then a whole chicken would now cost you the princely sum of £51 (presumably that’s not even organic).
But it’s not just house prices; rents, in London at least, show no sign of abating their upward spiral. Indeed, the average rent for a three bedroom house in the capital rose by over 8% between 2011 and 2012.
More than this, the average monthly rent for a three bedroom council house in England was £349 in 2011-12, with the private sector average in England being £758 and in London £1674. The difference between the first and second figures is startling enough; with the first and the last a truly frightening chasm between what was once considered a social rent and what the private rental market now offers.
Even leaving to one side the uncertain future for those on social rents and the impact of welfare changes, the growth of the private rented sector as a tenure of choice, by many in the capital at least, bears truly frightening long-term consequences as rents are hiked up while real-terms wages decrease or stagnate – the scale of the problem across the social spectrum cannot be underestimated.
The Chancellor’s answer to the rising tide of public concern has been to offer an interest free loan to help cover a 20% deposit for buying new build houses alongside a mortgage guarantee, thus aiming to widen access to mortgages and support the construction industry. These measures, announced in the Budget, were met with cautious welcomes from both lenders and house builders alike.
Of course, people need help getting onto the housing ladder. And yes, we need more privately-built homes. But are there other hidden assets, other options that might also be explored?
The fact is that regardless of the state of private housing development, as recently as the 1960s, local authorities alone were building significantly more than the 115,000 completions of all types in 2012.
Localis has for many years argued for a return to the heyday of council house building, with Lord Shipley introducing a proposed amendment to the Growth and Infrastructure Bill in the Lords shortly before the Budget which would have lifted borrowing caps; an amendment backed by the Local Government Association, Chartered Institute of Housing, the National Housing Federation and many others.
Sadly, it was rebuffed.
In a Localis pamphlet, Councillor Gary Porter (Vice-Chairman of the LGA) once suggested that councils have the ‘appetite and the capacity’ to play a much greater role in building the new homes that the nation so desperately needs.
Arguably, this goes beyond mere borrowing and building to the very heart of a council’s role as place-shaper and developer of assets and communities, and how does this all link to strategic planning? This think-tanker at least wonders, just how great is that ambition and will Government ever let that be unleashed?
And were a council ever to push those constraints, would a localist Government be willing to stop them?