Comment: JV North Chair John Bowker explains the need for government to extend the current Affordable Homes Programme and replace five-year programmes with continuous annual funding.
Angela Rayner’s announcement that more grant funding for affordable homes will be included in the Spending Review is warmly welcomed.
It is now vital the approach taken addresses short-term issues of avoiding a fallow period of housebuilding while considering the bigger picture so long-term housing targets can be reached.
With just under two years left in the 2021/26 Affordable Homes Programme (AHP), there is a danger housebuilding stalls as developments of over 50 homes or those that take longer than 12 months are unlikely to gain board approval.
Financial viability is under heavy scrutiny so boards want to know if the remaining funding will be available when schemes complete.
To avoid this downturn, what should Labour announce?
Launching a new development programme usually takes around 12 months of planning and considerable funding to get into contract with participating housing associations and local authorities.
Given the flexibility the current AHP provides in terms of tenures ie grant can be used for affordable rent, social rent, shared ownership, rent to buy etc. a better option would be to top-up the existing budget and extend the 2026 deadline.
Housebuilding consortium JV North is calling for an additional £3 billion – a reasonable, realistic request given the originally fund was £12.4bn – along with two more years taking us to a 2028 end date. This would also avoid the cliff-edge development scenario we are currently facing.
JV North has built more than 10,000 homes via different government-backed programmes over the years and has first-hand knowledge of how best to deliver in the volume needed in the long-term to meet targets.
Having been invited by the Ministry of Housing, Communities and Local Government to help evaluate the current Affordable Homes Programme, our longer-term feedback is for a fundamental shift in the way housing is viewed by government.
Going forward it is vital housing is recognised as a key part of the national infrastructure not dissimilar to the NHS given health and housing are inextricably linked.
The damage inflicted to housing the past 10 – 15 years, which is reflected in record homelessness and the number of people in temporary accommodation, means it will be at least one generation before the housing crisis is under control.
Therefore, we need to look at the bigger picture and from a housebuilding perspective replace short-term grant programmes of five years with continuous, annual funding that is always available.
Not only will this avoid repeating the risks outlined above where housebuilding potentially grinds to a halt as we get around two-thirds of the way into a programme but it also enables larger-scale regeneration projects to be delivered.
The current situation means the process of decanting people begins well in advance of any construction work starting and the impact on tenants should always be at the forefront of everything we do; we can’t allow timetables and the stop-start nature of funding programmes to dictate how we build.
Access to an ongoing, rolling fund would in effect also mean continuous market engagement bidding which helps negate (as much as is possible) volatile market conditions such as inflationary build cost pressures.
Having certainty and a long-term plan will cascade through the housebuilding sector giving contractors confidence to be more active tendering for work and invest in office and site staff so they have the capacity to deliver.
Given latest figures from the Office for National Statistics show borrowing at £14.5 billion and national debt at £2.7 trillion, government expenditure budgets are going to be in huge demand so there will be a limit as to what can be achieved initially.
The housing crisis will not be fixed overnight. Such deep-rooted problems means it will take at least two parliaments to turn things around and that is with a long-term plan in place that also needs cross-party support.
Labour is right to warn there is no magic wand but a credible and clear vision for the future that does things differently is arguably what the sector needs more than ever.