New homes target to be missed despite minister's £18m as figures show housing crisis getting worse

Minister of state Gavin Barwell declares that his new fund will "turbo charge" building but it's a drop in the ocean when set against the scale of the housing crisis

James Moore
Friday 11 November 2016 10:20
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Housing minister Gavin Barwell has unveiled an £18m housing fund
Housing minister Gavin Barwell has unveiled an £18m housing fund

It is a sad fact that many of the economic issues and injustices bemoaned of by backers of Brexit can be traced back not to Brussels but to Westminster.

One of those is the housing crisis. But the minister in charge of dealing with it, Gavin Barwell, has a plan. He’s going to “turbo charge” new building with an £18m fund.

Hooray! So that means he’s going to ensure the Government keeps its promise of building 1 million new homes by 2020? Err, well, maybe not.

The Government floated that number at the end of last year. It is currently building at the rate of about 170,000 a year and if that continues it would appear to have about as much chance of hitting the target as there is of Nigel Farage saying “you know what, there might be something in this European Union lark after all”.

Mr Barwell's fund, we are told, will aim to “speed up house building on large sites that will provide thousands of new homes where people want to live”.

It will “accelerate the delivery of up to 800,000 homes and infrastructure across large sites in England”. Note the word “up to”. There will be six new “housing zones” to deliver “almost 10,000 new homes” and a new garden town in Kent (12,000). Marvellous.

But we’re still looking a little short of that target. The minister, I’m told, never actually said he’d miss it, but even assuming all the promised homes are constructed by 2020 (a big ask) he’s still likely to come up short.

In the meantime, developers complain about local authority planning processes are stopping them from getting on with building, local authorities say that’s because central government starves them of funds (and they have a point), central government puts out press releases and quietly blames local government. And houses still aren’t built. It’s hard to see a few quid extra going the way of council planners changing that.

Here are some facts and figures that bear repeating. The Resolution Foundation recently said home ownership is at its lowest level for 30 years and only a relatively small number of today’s young people will ever be able to join the property-owning democracy as their parents did.

Nationwide Building Society earlier this month said a typical home now costs a staggering six times average annual earnings, the highest since March 2008. Price inflation has been running at 20 per cent over the last three years while wages have risen by just 6 per cent.

It is slowing at the moment, but only by a bit.

Rents across the UK rose just 3 per cent in the 12 months to September, the slowest annual growth rate recorded this year, according to the HomeLet Rental Index, but still higher than the current level of wage growth. It is running at just over 2 per cent, according to the Bank of England.

Good luck if you need a council house. You’re not going to get one. And yet the Government is still selling them off to tenants wealthy enough to be able to obtain mortgages. Crisis is an over-used term, but when it comes to Britain’s housing issues, it’s apt.

It came about not through immigration from the EU, as Brexiteers would have you believe, but as a result of Westminster's failure to get a grip on a problem that has been years in the making.

Quite how an £18m fund and a few brownfield zones are going to change anything much is open to some question.

The Government’s attention appears, at the moment, to be solely focused on “Brexit means Brexit” which means one of the problems that contributed to that disastrous act of self harm is not getting the attention it desperately needs.

This latest initiative is well meaning but it offers only a relatively small sum of money. It is like trying to use a brolly as a shield against a tide wave.

What is needed is a national strategy, and a minister of cabinet rank with the clout to push it forward. Instead we have Mr Barwell, a minister of state and avid Twitter user, and a little something to tweet about.

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