It has been a major start to 2018 for Mrs May with a number of major reshuffles and resignations.
If we specifically focus on the UK’s housing crisis, Dominic Raab takes over as housing minister. An interesting choice considering he has rarely sought to input his views on the subject area.
However, when he has though they have frequently highlighted the need not to be building on the green belt to create affordable homes or solve the housing crisis.
Other changes for housing are reserved for Sajid Javid who has now had his title and department renamed. In the case of his title simply adding “housing”. However, the Department for Communities and Local Government (DCLG) has been renamed to the Ministry of Housing, Communities and Local Government (MHCLG), as if the “Department for Communities and Local Government” was not already “clunky” enough.
The main overriding reason given by the PM was that it is to reflect the importance and “personal mission” she has placed on housing, and therefore resolve the housing “crisis”.
Of course, Sajid Javid has had responsibility for housing for some time, but he has been the most senior minister to speak regularly on the issue of housing during his time in the department.
Obviously changing a department title and a ministerial job title is never going to fix the housing crisis. Nor is swapping one minister for another in the case of the housing minister going to fix the problem.
It could be interesting times ahead considering Dominic Raab’s lack of input (albeit for the green belt), and how often his immediate senior, Sajid Javid, has highlighted the needs and policy reforms to help resolve the housing crisis.
One of the first things pushed out by the freshly “minted” MHCLG was a “new” (rebranded) national housing agency, rather aptly “Homes England” (previously known as the Homes and Communities Agency).
Launched on the 11th January by Sajid Javid he highlighted that it was one of the key steps towards delivering the homes the country needs.
It aims to:
- Deliver an average 300,000 homes per year by the mid 2020’s
- Bring together existing planning expertise and land buying powers
- Secure land in areas people want to live
- Support smaller and more innovative house builders
- Resource brownfield sites from across the country to deliver homes for families
Regarding the first aim, this is an interesting aim, because those with a slightly longer-term memory will look back to the Budget delivered by the Chancellor who highlighted a target of 300,000 homes per year. Effectively, we now have something slightly more concrete than just “300,000 homes per year”.
But, here at TDM we see some of this aim as difficult to reach considering our research highlighted that in recent years getting just over 200,000 homes completed was a challenge in a year, and an achievement (Link). Therefore, simply achieving that element is going to be difficult, no wonder the agency has been given a long and slightly imprecise aim including the words “average” and “mid 2020’s”.
One issue less obvious with this aim though is having the right number of and skilled construction workers to build these residential properties.
In recent years the construction industry has been under strain. There are a number of trends that have caused this shortage, but fundamentally:
- Lack of New Blood coming into the construction jobs market – mostly with lack of training or adequate support
- Older workers retiring – a trend that is set to increase
- Brexit – The percentage of EU workers work in some regions of the UK. Effectively “plugging the gap” we have. Time will tell whether this has a larger impact on the required skills.
The second aim in recent time has been massively aided by numerous policy reforms, in many cases courtesy of Sajid Javid no less. This aim seems to have been partially achieved already in recent time, whether it will entirely be achieved is another question.
Many private developers and local authorities are increasing the size of their land banks. But, whether the agency will ensure they are in the areas people want to live is debateable.
Supporting “smaller and more innovative builders” is something here at TDM we highly support, alongside the larger national developers.
In actual reality, if we focus on the Government’s flagship housing policy, Help to Buy, the MHCLG recently released some statistics:
- 350,000 completions have taken place using one or more of the Help to Buy Schemes
- 300,000 first time buyers are now on the housing ladder
- Over 93% of completions across Help to Buy schemes have taken place outside London
In recent time TDM have written about the Help to Buy scheme highlighting that a number of smaller house builders are missing out on the opportunity to really benefit from the flagship policy.
The reason being, in a majority, the policy has supported the interests of the larger national PLC’s over the smaller more local house builders and developers. The recent cash injection of £10 billion will only seek to extend the reliance some of these larger national PLC’s on Help to Buy.
In support of that is clearly the somewhat significant salary bonus Persimmon CEO, Jeff Fairburn, collected in part at the end of 2017. Most of which appears to be as a result of Government money ultimately.
So, is the agency going to create and help either with Help to Buy or other policies the smaller builders? It seems somewhat unlikely if recent time and how Help to Buy has turned out as a policy and the lack of any “real”, long- lasting impact on them.
Therefore, maybe the focus is going to be more on the innovative builders? If based on current industry trends this seems more likely. Some of the slightly larger more recent entrants to the market have technically been “innovative”. One, specifically that appears frequently in the news is Legal and General, who have many sites, some of which include homes of “modular” construction, and will help to increase the number of affordable homes in the UK.
In regard to the final point of brownfield sites much has been done in recent time to help reduce the level of time it takes for housebuilders to identify suitable brownfield sites. One example of that is local authorities having to produce and maintain up to date records of local sites available for housing locally. A bonus for those using these sites on the registers was permission in principle.
In a way all the tools are already in place for this aim so it is of little actual “development”.
Overall, it can be seen that for Homes England it is going to be difficult to achieve a proportion of these aims due to a number of direct and indirect factors.
The most difficult of all the aims set out is achieving 300,000 homes (even as an average), considering just over 200,000 was an achievement.
Added, to that is how they are going to support smaller builders and innovators, which at the current time seems lacking in any real ground level drive or policies.
Beyond the Homes England agency, it will also be interesting to see what other policy reforms Sajid Javid executes, and how the PM supports her “personal mission” to resolve the housing crisis.
It would seem, at the current time, that for the PM that means extension and cash injection to the flagship Help to Buy scheme. Which as we have highlighted has had little real impact on the smaller housebuilders and in little way aids Homes England in the final aim for smaller housebuilders.
As for the housing minister, time will tell, however it appears that he has little real involvement in housing. Unfortunately, for him it appears to be a role of a revolving door, and not one that previous incumbents have enjoyed.