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Comprehensive Spending Review: Reaction

Words: Laura Edgar

Industry experts have said that making house building a priority in the Comprehensive Spending Review was the “right” thing for chancellor George Osborne to commit to, but they still have concerns regarding housing supply and placemaking.

Speaking after the spending review on 25 November, Christian Faes, co-founder and CEO of LendInvest, a mortgage lender, said: “Schemes like shared ownership and Help to Buy are great initiatives to stimulate home ownership.”

However, Faes warned that if the housing stock “isn’t increased urgently, there’ll be nothing to buy”.

As part of the spending review, the chancellor announced a series of measures aimed at addressing the UK’s “crisis of home ownership”.

The measures, which can be found in more detail here, include doubling the housing investment to deliver 400,000 affordable homes, removing constraints that “prevent private sector organisations from participating in the delivery” of them, and extending the right to buy to housing associations.

Shift in how sites come forward


Anthony Pollard, director at planning consultancy Turley, said the removal of the constraints on private sector organisations represents a “potentially significant shift” in the way that housing sites will come forward. “By implication this should improve viability enabling some sites to come forward more quickly delivering much needed housing.”

Housing market out of control


Steve Sanham, development director at HUB Residential, a London-based housing developer, said: "With the government promising to subsidise home ownership for the masses, the chancellor has effectively admitted that it can’t get the housing market under control. It appears that the housing policies of the past few decades have been an utter failure.”

The problem hasn’t been a lack of affordable housing, “rather a lack of affordability in general”. He said investing in infrastructure to open up new areas for development as well as “freeing up the bureaucracy of the planning system” are the only ways to bring ‘market homes’ within the reach of first-time buyers.

Lack of construction skills could upset plans


The Federation of Master Builders (FMB), a building industry trade association, has warned that a construction skills shortage could “scupper” Osborne’s plans for 400,000 affordable homes.

Brian Berry, chief executive at FMB, said the chancellor was right to prioritise housing but said, “‘George the builder’ will need a new generation of ‘real’ builders to make his vision for housing a reality”.

“We’re already seeing housing developments starting to stall because the cost of hiring skilled trades people is threatening to make some sites simply unviable. Unless we see a massive uplift in apprenticeship training in our industry there won’t be enough pairs of hands to deliver more housing on this scale. That’s why we’re keen for the government to tread carefully when applying the new proposed Apprenticeship Levy to the construction industry.”

Berry continued by saying the FMB hopes the government will do everything it can to increase house building capacity, with SMEs having an “important role” to play in delivering smaller-scale sites across the country.

New homes must be in the right location


By committing to such an “ambitious” house building programme the government is really “putting its money where its mouth is,” said Melanie Leech, chief executive at trade association the British Property Federation.

However, the government needs to understand that new homes must be built in locations that have “good transport links, social infrastructure such as hospitals and schools, and leisure and employment facilities. No one wants to live in a new house built in the middle of nowhere, with no shops, jobs or community facilities nearby. Great places are also those which have a variety of housing types to suit different demographics, and the Build to Rent sector must not be pushed aside in blind pursuit of making us a nation of homeowners”.

Important step towards home ownership


Tom Hall, real estate partner and head of Irwin Mitchell Strategic Land Group, said the housing announcements are an important step towards ensuring that young people can aspire to home ownership, providing some good news for house builders and other stakeholders involved in housing delivery. To get young people onto the housing ladder, sites for development will be unlocked providing “real incentives builders to start work on sites where viability of development was previously an issue”.