In announcing last week plans to boost Britain’s productivity through greater support for housebuilding and infrastructure, the chancellor was crafting a long overdue, holistic approach that recognised the links between these priorities.
But we need to go further to meet our housing needs over the long-term.
As ResPublica has argued, we need to think big. In the year to September, housing completions totalled 141,690: under half the 300,000 new homes we need each year. The lack of good quality, secure and affordable homes blocks the aspiration of those looking to enter or progress in work. Escalating costs mean few young people can support themselves in their first years of work without help from the state or family. With people unable to live near work, many are cut off completely from more gainful employment. It’s no surprise productivity in Britain still fails to match that of France, Germany and the USA.
That’s why the chancellor’s announcements are welcome. Banning letting agent fees is key to this productivity drive, and will make it much easier for people to move into employment centres and out of poor conditions that hinder wellbeing and productivity. More flexibility in the way affordable housing grant money is spent will encourage innovation in tenures. Investment in infrastructure to unlock land for housing and providing new money for affordable housing should boost the supply of homes.
But the Office for Budget Responsibility forecasts net housebuilding by housing associations will still fall by 13,000 over the next five years and residential investment growth will fall by 0.2%. This is because short-term funding is never going to overcome the issues of pace and scale, which remain the key barriers.
Our proposal for a National Housing Fund, in which the government and housing associations would act as a guaranteed buyers of homes, would enable smaller developers and associations to build at scale. We estimate the fund would deliver up to 75,000 homes for mid-market rent per year. This would give people locked out of tenure security and home ownership.
The fund would be a resource through which to deliver homes to meet local growth ambitions. If a city wanted to retain more of its graduates, the fund could deliver more high-quality homes for rent. If a county needed to attract and retain teachers, the fund could be used to deliver submarket key worker housing linked to employment. If a city region needed to start large-scale regeneration, the fund would provide the mechanism through which homes could be built at a faster pace than the private sector alone could deliver.
Public services functioning better because they can attract staff; young, skilled and enterprising graduates attracted to and able to live in cities; and the financial means to deliver regeneration – this would truly spur the chancellor’s productivity strategy.
Phillip Blond, director, ResPublica