New Housing Minister Urged to Build More Homes to Rent

The new Housing Minister, Gavin Barwell, is having a busy first week in his new post.

Earlier in the week, the newly appointed minister was questioned over his commitment to building one million new homes, saying that homes will only be built on greenbelt land in “special circumstances”.

Now, he is being urged by industry experts to support the building of more new homes to rent by relaxing the rules around public funding in the sector.

New Housing Minister Urged to Build More Homes to Rent

The appeal has been launched following an independent report, published this week by the Centre for Economic and Business Research and commissioned by the National Housing Federation (NHF), which predicts that the UK economy could shrink by £145m in the next ten years if the rate of growth in new housing completions falls at the same rate as it did in 2008.

Spokespeople for the NHF and the Chartered Institute of Housing (CIH) argue that building more homes to rent or for shared purchase would help keep housebuilding and the economy steady during a time of economic austerity.

The NHF believes that up to 300,000 units could be built by housing associations by 2020 if funding is made available – even in times of economic uncertainty.

CIH data shows that during the last recession, the number of homes built by non-profit housing associations rose by 22% between 2007-09, while private development dropped by 37%.

The call from the industry bodies for the Government to redirect some of the current funding to allow construction of new housing association homes to rent is likely to be welcomed by would-be tenants, as demand currently outstrips supply.

Reallocation of the central budget to allow housing associations to build more rental properties would also alleviate the negative impact of a general slowdown in the housebuilding sector, which is a widely anticipated result of the Brexit, according to James Howard, a partner in Clarke Willmott LLP’s social housing development team.

He believes: “A change in funding strategy to switch the balance to building more for rent than for sale should allow for a supply of new homes to continue, despite the gap private sector housebuilders might leave behind.”

Clarke Willmott’s Head of Housing and Asset Management, Jonathan Hulley, adds: “The Government’s flagship Starter Homes scheme would lead to the undermining of sales of more affordable shared-ownership properties and fails to address the urgent need for more affordable homes to rent. The social housing sector argues that housebuilding is needed now more than ever – people are in need, waiting lists are still growing – so the policy of building more homes for sale only needs to be revised and adapted to allow for the building of more homes for rent.

“There is also a worrying lack of capacity on the ground to deliver, which needs to be addressed, and a question-mark over what appetite there is for outright purchase of houses on a large scale. On the other hand, the kind of shared-ownership offered by housing associations puts homes within the reach of the many people who would otherwise be unable to afford them.”

He concludes: “It’s high time for a change in Government policy to support greater flexibility to deliver not just on homes for sale, but also allowing more to be built to rent.”