While the sector may not have received all that it might have wanted, housing has emerged as one of the winners of the government’s latest Spending Review.
This is the view of James Bailey (Housing Leader for PwC), who notes that the government continues to demonstrate its commitment to the sector as both a political and social priority and a key enabler of economic growth.
“The new Affordable Homes Programme was the flagship announcement made by the Chancellor and will see £39 billion of investment into new social and affordable housing over the next decade,” he said.
“This represents a significant uplift on the previous funding programme and will provide a much-needed boost to the affordable housing sector, which retains an appetite to develop but has found itself constrained by tight finances and the need to prioritise investment in existing stock improvements.”
Similarly, the commitment to a long-term CPI + 1% rent settlement will provide confidence to the sector and institutional investors to invest in new affordable housing, said Bailey.
“The anticipation of potential further upside through social rent convergence, subject to the consultation announced, will provide further optimism for the sector,” he said.
“Taken together, these measures will support the restructuring of housing association balance sheets, following a difficult and uncertain period and – importantly – allow for the delivery of much-needed new affordable housing.”
While there were no demand-side announcements in the form of a rejuvenated Help to Buy or equivalent, the combined effect of the announced measures alongside the commitment to a UK-wide mortgage guarantee scheme will help to unlock many stalled sites currently held by SMEs and volume housebuilders, said Bailey.
This is critical to delivering a material uplift on current build-out rates, he said.
“Panning out, when set against a backdrop of recent housing ministry announcements around streamlining (and digitising) the planning process, through changes to the National Planning Policy Framework and the proposed Planning and Infrastructure Bill, the push towards incentivising large scale mixed-tenure models, and introducing measures to improve access to public land and low cost financing for SMEs, then you can begin to see the hallmarks of Labour’s housing strategy coming together.”
Leave a Reply