THE demand for housing is expected to grow by more than 200,000 homes a year, of which only 100,000 are currently being built.
However the Government’s recent Autumn Statement outlined its new housing strategy which aims to address this housing crisis. The Prime Minister and his deputy have hailed the new initiative as a sign of the coalition’s determination to reverse the slow rate of property building.
The strategy includes a £400m Get Britain Building fund that will target housing developments that have stalled due to lack of finance.
The fund is set to provide up to 16,000 new homes in the first year, 3,200 of which will be affordable properties, by getting developers to start work on new projects and completing those that currently stand unfinished.
Also outlined were details on reforms of the Right-to-Buy scheme for social housing tenants. This will involve offering bigger discounts for those choosing to buy their homes. The income from these sales will be used to sustain the construction of up to 100,000 new, affordable, rented properties.
Other measures announced include a mortgage indemnity guarantee scheme, which will reduce the level of deposit first-time buyers must raise to around 5%, and FirstBuy equity loan scheme which will help almost 10,500 first-time buyers purchase a new-build home with the support of an equity loan of up to 20%.
The Government’s housing strategy is predicted to create 32,000 construction jobs. However, if more homes are built, there will also be a significant knock-on effect in the wider economy.
It will be a boost, not only to the construction companies, but also to the suppliers of materials and equipment from taps to roof tiles and from kitchen units to heating systems. While on the surface the help appears to support larger companies, it’s also good news for small businesses which also may benefit from supply chain opportunities that will be generated.
The lack of building has cost the British economy dearly. While it is not the full solution, the housing strategy could be the key to resuscitating the UK’s construction sector.
Catriona Lingwood is chief executive of Constructing Excellence in the North East. She can be contacted on 0191 374 0233 or catriona@cene.org.uk.