Dave Proudlove: “A ‘reckoning’ is still needed for housing” – David Proudlove



Last week ,the economic impact of the coronavirus crisis started to become clearer when it was reported that UK GDP fell by 20.4 per cent in April, with no area of the economy untouched.

This leaves the country on the brink of the worst recession in a century, with unemployment expected to rocket.

One part of the economy that is uniquely affected in an economic downturn is housebuilding, and as these grim statistics were revealed, think tank Centre for Policy Studies outlined the potential for a 38 per cent fall in housebuilding, suggesting that most developers going back on site were simply completing mothballed projects.

They went on to call for a programme of Government support to keep the industry moving, probably with a view to influencing thinking ahead of next month’s mini-budget, which is expected to include a range of measures to aid economic recovery.

For those of us who’ve been around for a while, this will all feel like déjà vu all over again, and it certainly feels a little bit like the fallout from the 2008/09 financial crisis, though this time the numbers are quite a bit starker.

Back in 2008, the Government’s response to the collapse in housebuilding was to invest greatly in supply-side measures to get the industry building again.

The highest profile of these was the Kickstart Housing Delivery programme, which allowed developers to apply for gap funding and the like for mothballed sites.

It was, in effect, a bailout for the housebuilding industry, though it was never promoted as such, and it prevented a complete meltdown.

It was always my view that the Kickstart Housing Delivery programme should have come with strings attached in terms of how the industry went about its business, how and what we build, and issues such as design and quality. It was a reckoning that was needed, but never happened.

As mortgage lenders became more risk averse post the financial crisis, the Home Builders Federation lobbied the Coalition Government following the 2010 General Election for support towards mortgages, and for reform of the planning system, promising that this would accelerate construction.

The Government gave them both with Help-to-Buy and the National Planning Policy Framework, and while this led to the major housebuilders getting back on their feet again and good times for their executives, the country’s housing crisis continued to grow.

And then came 2017 and a couple of seminal moments for housing.

First came the Government’s Housing White Paper, which finally acknowledged that the country was facing a major housing crisis, and that it was a crisis of supply.

However, the interventions that followed were, in the main, demand-side, which has simply acerbated the problem, and we now face a shortfall of more than 1.5 million homes.

The second came a few months after the publication of the Housing White Paper when the Grenfell Tower disaster shone a light on the sick joke that housing policy in this country has become.

But despite coming under increasing pressure to address housing policy, the Government has continued to kick things into the long grass.

But now with the coronavirus crisis, the time has surely come for that long overdue reckoning. The fallacious philosophy that the private sector alone knows best and can address housing need has been shown up for what it is. It can’t, it won’t, and there is a mountain of evidence that demonstrates such, leaving us with a great housing crisis.

And the economic fallout from the coronavirus crisis will worsen things on a huge scale with an increase in repossessions, homelessness, increased demand for social housing from those that can no longer afford to rent privately, and increased need and demand arising from relationship breakdowns.

The Government will need to react, and support all players including local authorities, housing associations, developers and housebuilders, and partnerships.

But although the short-term priority should be to get people building again, we cannot escape the fact that that reckoning for housing policy is needed.

A secure home is probably the most important thing for individuals and families. It provides foundations and the means to aspire.

What we build and how we build will be critical to the future of our country.

  • Dave Proudlove – Founder of development and regeneration advisers URBME





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