Want to build 1m new homes? Well, you’ll need a better plan...

One million new homes. That’s today’s big housing number, courtesy of housing minister Brandon Lewis. In response to new figures showing that we failed to build even half as many homes as we needed in the last five years, he said that success would look like building one million new homes this Parliament.

We agree: achieving this would be a start, although it’s still short of the 250,000 homes needed each year – and the Minister has since clarified that this is not a target.

The problem is that the ideas coming through so far from the government aren’t nearly up to the task. In fact, too often they are pushing in the wrong direction.

There is no coherent plan in place for increasing house building. Instead, the government has launched a bundle of policies aimed at increasing homeownership, but which could easily have the opposite effect by pushing up house prices.

Not only does this approach fail to tackle any of the thorny issues of under-supply, it won’t address the real reasons homeownership in England is plummeting: the fact we don’t build enough genuinely affordable homes.

It’s time for a plan.

plan what plan

The package of housing policies trailed so far constitute a massive reshuffling of the existing housing stock, at the expense of families needing an affordable home.

Last week we published research showing how damaging the plan to forcibly sell off council homes would be. It will rob local authorities of their most valuable homes and deprive us of affordable homes in the areas where they are needed most. Promises that these homes will be replaced should be taken with a pinch of salt. Previous promises to replace homes lost under the revived Right to Buy have not been met.

The forced sale plan will also kill off councils’ plans to build more homes, which had finally been reviving after decades of inactivity. We found that more than 20,000 new homes councils are planning to build are now at risk – in just the 20 most impacted areas from the sell-off.

Then there’s the new idea of ‘Starter Homes’ – 200,000 of which have been promised, but none of which have yet being built. Offered at ‘20% off the market price’ to first time buyers, it’s pretty clear that this will similarly only benefit better-off purchasers: average earners will be priced out of these homes in 58% of the country. There’s also a big question mark over whether these homes will be truly additional, or just cannibalise other forms of affordable housing.

Finally, in today’s Financial Times we showed that the government’s flagship housing scheme Help to Buy has actually made buying harder. It’s pushed up house prices by £8,250 on average and up to £19,000 in some local areas.

None of these schemes are likely to significantly increase homeownership – at least, not enough to balance the growing numbers of people force to rent privately by ever rising house prices. Worse still, they are all being delivered at the expense of genuinely affordable homes – homes which might have given hard pressed families the security and affordability to allow them to save up for a deposit.

Shelter has been calling for a big bold plan to get us building the homes we need for years. We’ve even written it with KPMG. Now we urgently need the Chancellor to heed the message and put his money where his mouth is – increasing investment in affordable house building at the Comprehensive Spending Review. Combined with a real plan, extra investment could genuinely get us building one million homes by the end of the Parliament. Otherwise, announcing targets is just hot air. As things stand, the government is offering nothing to those on low to middle incomes at the sharp end of our failing housing system.

One Comment
  1. The new homes which are been built are largely unaffordable.

    Help to Buy, has pushed the house prices to £600,000 (which is the upper limit). But I suspect these homes owners will be trapped, because they may struggle to sell their home in the future, say if they have children. As Help to Buy will not be extended to the subsequent owners (perhaps someone whos Help to Buy can confirm my theory).

    if these owners need a bigger home, they may struggle to sell and eventually be forced to rent their property, but with the new tax changes, when they get their rent, they will not be able to deduct the cost of the interest fully, so it will cost them to rent out their home. It is putting people into an impossible position.

    New home owners are paying for social housing. So they there is an indirect tax on new homes.

    My advice, stay away from new build properties and stay away from Help to Buy.

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