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Small builders resilient despite material price hikes

The workloads of small and medium-sized (SME) construction firms grew slightly in the first three months of this year despite record numbers of builders reporting rising material prices, according to the Federation of Master Builders (FMB).

Key results from the FMB’s latest State of Trade Survey, which is the only quarterly assessment of the UK-wide SME construction sector, include:

  • Construction SME workloads remained positive in Q1 2018 but grew at a slower rate than in Q4 2017
  • The construction SME sector has now enjoyed five years of consecutive growth
  • More construction SMEs predict rising workloads in the coming three months, up from 38% in the previous quarter to 49% in Q1 2018
  • 90% of builders reported increasing material prices in Q1 2018, this is the highest reading on record
  • More than half (58%) of construction SMEs are struggling to hire bricklayers and 55% are struggling to hire carpenters and joiners
  • Two-thirds (66%) of construction SMEs expect salaries and wages to increase during the next six months, up from 62% in the previous quarter

Brian Berry, Chief Executive of the FMB, said “Workloads for builders continued to grow in the first quarter of 2018 despite the ‘Beast from the East’ wreaking havoc across the UK’s construction sites. However, once again, the growth we are seeing is slower than in the previous three months and this can be partly attributed to pressure from rising costs. Indeed, 90% of builders reported increasing material prices in the first three months of 2018 and this is the highest reading on record. Insulation, bricks and timber are the materials that have increased the most and builders are predicting that these price increases will continue. We are also seeing increased salaries for tradespeople stemming from the acute skills crisis and that, coupled with material price hikes, are squeezing margins and stifling growth for construction firms of all sizes.”

“In terms of house building, these latest results should sound some alarm bells with the workloads of SME house builders dropping off in the first quarter of this year. In 2017/18, 197,000 homes were started in England but this is some way off the Government’s target to build 300,000 homes per year. The FMB has worked closely with the Government to identify how to remove barriers to small local house builders, but these latest results act as a reminder that there is more to be done. The FMB would now like to see the continued and speedy implementation of some positive Government policies designed to bring forward more small sites, properly resource planning departments and increase the flow of finance to SME house builders. If we are to reach our ambitious house building targets, we cannot rely solely on the largest house builders.”

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Government calls on industry to embrace offsite

Ministers today called on industry to embrace the latest innovations to make sure we are building the good quality homes that our country needs.

As part of the government’s focus on fixing the broken housing market and its ambition of delivering 300,000 new homes in England by the mid-2020s, it’s essential that the quality and design of new housing is addressed. This can help secure support from communities for new homes, and make sure we have good quality homes that people can feel proud living in and next-door to.

Recent research shows that more than 7 out of 10 people would support new residential development if buildings are well-designed and in keeping with their local area.

Action to boost innovative approaches for well-designed new homes include:

£1 billion investment through the Home Building Fund to develop new, modern approaches to design and construction

To date, 8 projects across 11 local authorities, backed by government funding, will use modern methods of construction such as modular homes to build good quality homes, using the latest techniques, whilst helping to speed up housing delivery.

Learning from other countries like Australia, Norway and Sweden where good design is embedded in decision making

For example, based on an Australian model, the government will urge councils to set their own design quality standards, giving communities the ability to better reflect their own unique character in local planning policy.

Embracing new technologies

For example using Virtual Reality (VR) technology to win the confidence of communities before a single brick is laid. By visualising proposed new housing from the neighbour or homebuyer’s perspective, communities will be able to see how development can visually contribute to the area from an early stage, even before planning permission has been granted.

Housing Secretary Sajid Javid said “Our homes are the making of all of us, which is why today’s event on raising the bar on the quality of new homes is so important.

“This government is determined to make sure that high quality design is the norm rather than the exception.”

Housing Minister Dominic Raab added “We are putting high-quality design on the map as never before when it comes to building better homes and stronger communities.

“Today’s conference marks an important milestone in that journey.”

Industry leaders, including local authority planners, developers and design professionals, attended the Design Quality Conference to share their expertise to ensure how homes look becomes just as important as the number delivered.

Ministers made it clear that they intend to focus on how developers can use better quality design in order to win over both communities and new generations of first-time buyers, who expect the highest quality homes before parting with their hard-earned deposits.

When things go wrong, the government has also proposed strengthening ways for homebuyers to complain when their home hasn’t been built satisfactorily – with these new measures recently being subject to a consultation.

The event will build on previous government action to ensure new homes are built using quality materials and design methods, as set out in the recently published draft National Planning Policy Framework.

The document, which is currently out to consultation, outlines requirements for design guides and codes to feature prominently in new Local Plans, significant consideration to be given to existing local character as well as setting out the density of developments that meet the needs and expectations of the community.

The conference also included speakers from the Royal Institute of British Architects, Stephen Lawrence Trust, The Princes Foundation, Historic England and Homes England as well as other experts with experience in delivering excellent build quality for new and existing communities.

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Construction industry needs 1.5m new recruits by 2021

In a report, Consultancy firm Arcadis suggest that around 400,000+ new workers will be needed each year up until 2021, in order to keep up with ambitious plans within the construction sector – that’s the equivalent of one new person every 77 seconds!

Housebuilding

Plans outlined in the recent Housing Whitepaper are extremely positive for house builders, who will have government support and reduced restrictions to help them deliver the sheer volume of housing needed in Britain today. However, could the lack of skilled people in the sector prove to be a hindrance if left unaddressed?

The report says “When it comes to the much maligned ‘housing crisis’, there is no doubt that the sheer lack of people to physically build the homes we need is evident.

“Between now and 2026 the UK needs to build an additional 110,000 homes per annum on top of those currently projected in order to keep pace with our growing and ageing population.

“Housebuilding is a particularly labour intensive industry and although new technologies and increased off-site production are being implemented to reduce costs and increase productivity, the supply of labour is still one of the binding constrictions on output.

“Existing evidence suggests that the relationship between labour and number of houses that can be built is close to being linear. Therefore, in order to increase the number of homes being built the labour force employed in housebuilding needs to increase by the same share.”

Infrastructure

The report also touches on infrastructure. Britain currently has one of the most ambitious national infrastructure programmes in Europe. With HS2 and Crossrail underway and much more planned, companies in the industry will draw heavily on the common talent pool.

“Despite the uncertain outlook for the UK economy following Brexit, the government under Theresa May seems committed to drive the largest projects forward.

“Moreover, it is expected that the government will set aside more money for road and rail works in order to support the UK economy over the coming years.

“According to figures from the Construction Products Association, the infrastructure sector is projected to grow only by 1.2 percent in 2016. However, for the years from 2017 to 2020 it predicts a pick-up in infrastructure output of 30 percent. Increased demand for people in the infrastructure industry is calculated by assuming that the workforce has to expand in line with this growth.”

To read the full report, click here.
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Cross-party MPs call on Government to support small builders

A cross-party group of MPs has urged the Government to introduce a new ‘Dedicated Strategy for Small Housebuilders’ to reverse the decline in the number of new homes built by small builders, which has plummeted to just 2,500 today from 12,000 in 1998.

Describing the new proposals, the MPs leading the report said ‘We have many legitimate disagreements with each other on many aspects of housing policy, but on this we are agreed: we cannot solve the housing shortage without smaller builders.’

‘An Inquiry into Support for Small Housebuilders’, supported by the Federation of Small Businesses (FSB), calls for a ‘Dedicated Strategy for Small Housebuilders’ which must address the key challenges holding housebuilders back, including:

  1. Limited access to finance: MPs are calling for a Government backed guarantee on loans to small housebuilders, who are more reliant on financing than bigger builders with large reserves of cash.
  2. Action against businesses that pay their suppliers late: The report asks for a strengthened prompt payment code with a new “three strikes and you’re out” rule targeting big businesses who repeatedly pay late.
  3. More help to increase apprenticeships in the building trade: Large businesses paying the new apprentice levy must prioritise transferring their levy to small, rather than large, businesses, helping to increase apprenticeship opportunities in the building trade.
  4. Remove barriers to building on small sites: Government must use the revised NPPF to streamline the planning process for smaller firms.

Robert Courts MP, Chair of the APPG, said “Government action has started to address some of the needs of small builders but we must leave no stone unturned to truly unlock the housing market.

“A new, dedicated strategy for small housebuilders would be an important step in achieving this. This needs to centre on a positive package of measures that removes some the biggest barriers for small builders including the inability to access finance and reducing the cost of developer contributions like the Community Infrastructure Levy.”

Catherine West MP, Vice Chair of the Inquiry, said “The current state of the UK housing market leaves no doubt that there is huge potential for small builders to make a vital contribution to building the homes we need.

“Our report sets out a series of proposals that will enable small builders to scale up, grow and build more which will help relieve the housing shortage.

“The simple truth is that the UK cannot expect to build the homes we so desperately need unless smaller builders are backed. Giving small builders the keys they need could result in tens of thousands of urgently needed homes being built up and down the UK.

“This will help create jobs, stimulate economic growth and provide the homes the UK need.”

FSB acts as the secretariat for the APPG and supported them on the inquiry.

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said “Small housebuilders will welcome the cross-party effort to shine a light on the very real challenges that are holding them back from playing their part in building the homes the UK needs.

“It is vital that the Government does not turn a blind eye to the findings of this report and commits to creating a dedicated strategy aimed at giving small homebuilders the finance, skills and support they need to help fix the broken housing market.”

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£45 million funding boost to support councils unlock land for thousands of homes

A £45 million cash injection into key community projects will help kick-start the building of thousands of new homes, Housing Minister Dominic Raab has announced.

As part of government’s drive to get Britain building homes again, a total of 79 projects from Newcastle to Plymouth will receive funding to support building up to 7,280 homes on council owned land.

To support local councils to meet their ambition to unlock enough of land they own for at least 160,000 homes by 2020, they will be able to use the Land Release Fund money to combat barriers which would otherwise make land unusable for development.

The projects – which aim to support building strong communities – include a range of necessary works such as asbestos removal and bat alleviation, as well as schemes that will significantly improve quality of life such as essential relocating of a pelican crossing.

This move comes 2 weeks after the projects set to benefit from the first wave of funding from the £5 billion Housing Infrastructure Fund were announced, helping to get up to 200,000 homes off the ground through investment in local housing projects. This is part of the government’s comprehensive strategy of planning reform and targeted investment to build 300,000 homes a year.

Housing and Planning Minister Dominic Raab said “We are investing £45 million to build roads and provide utilities, so councils can release the land to get up to 7,280 new homes built.

“It’s part of our strategy to build the homes Britain needs, and carry local communities with us.

“We’re determined to make buying or renting more affordable for young families and those on low or middle incomes.”

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Independent review to tackle barriers to building

A vital independent review into understanding why hundreds of thousands of homes haven’t been built – despite having planning permission – is now underway, according to the Government.

Originally announced at Autumn Budget, the review, led by Sir Oliver Letwin will look to explain the gap between the number of planning permissions being granted against those built in areas of high demand.

Currently, after planning permission is granted a variety of factors can prevent development from starting and slow down delivery and the review wants to determine why.

As of July 2016, just over half the 684,000 homes with planning permission had been completed.

The review will seek to identify the main causes of the gap and will make recommendations on practical steps to increase the speed of build out. Latest evidence shows that residential planning applications are up and that time to process major applications continues to be at a record high.

Sir Oliver Letwin, Chairman of the Review Panel, said “This government is serious about finding ways to increase the speed of build out as well as tackling the complicated issues surrounding it.

“That’s why we have set up this diverse panel to help me test my analysis and to make practical, non-partisan recommendations, as we look to increase housing supply that’s consistent with a stable UK housing market.”

Housing Secretary Sajid Javid said “We are determined to build the homes this country needs, but currently there is still a significant gap between the number of planning permissions being granted and the number of homes built.

“This review is vital to helping us understand how we can build more homes quickly.

“All parties have a role to play in closing the gap and I look forward to receiving Sir Oliver’s findings.”

The review will be conducted in 2 phases:

Phase 1 – currently under way – will seek to identify the main causes of the gap by reviewing large housing sites where planning permission has already been granted. This will include information-gathering sessions with local authorities, developers, non-government organisations and others. Early findings will be published in the interim report.

Phase 2 will make recommendations on practical steps to increase the speed of build out, which will be published in the full report.

The review will also consider how to avoid interventions which might discourage house building or hinder the regeneration of complex sites.

Sir Oliver will be assisted by a team of leading experts:

  • Richard Ehrman – author, small commercial property developer and former journalist. Former special adviser to the Secretary of State for Employment and subsequently Northern Ireland, onetime Chief Leader Writer of the Daily Telegraph, and former Deputy Chairman of Policy Exchange
  • Lord Jitesh Gadhia – Member of House of Lords and investment banker
  • Lord John Hutton – (Labour) Peer and former Secretary of State
  • Rt Hon Baroness Usha Prashar CBE, PC – (Crossbench) Peer with a career spanning public, not for profit and private sectors, currently Deputy Chairman, British Council and a non-
  • Executive Director of Nationwide Building Society
  • Christine Whitehead – Emeritus Professor of Housing Economics at London School of Economics
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Average house built in England will have to last 2,000 years

The average new home in England will have to last 2,000 years if the sluggish rate of house building and replacement continues, the Local Government Association have warned.

The country has not built enough homes for decades. As a result, existing homes must house more people and last for much longer, which has led to the country spending nearly as much on the repair and maintenance of existing homes as it does building new ones.

But analysis reveals that one in 10 new home buyers are dissatisfied with the quality of their new home and one in six would not recommend their house builder to a friend.

The research, carried out for the LGA, also reveals most local areas have more homes built before 1930 then from any other period of time, demonstrating the age of much of England’s housing stock.

The LGA is calling on government to help councils build a new generation of high quality, genuinely affordable and additional homes, supported by adequate infrastructure and services. Housebuilders also need to work with councils to ensure new homes are built to a good quality, and will stand the test of time.

With increasing numbers of people in the private rented sector, council leaders are also concerned that 28 per cent of privately rented homes are not decent, an increase of 150,000 homes since 2006. In comparison, council homes are more likely to be better quality, with 85 per cent meeting the decent homes standard, an increase from 70 per cent in 2008.

Local government leaders insist a “national renaissance” in council housebuilding must be central to solving our housing shortage and improving quality, and for delivering the mix of different homes that meet the growing and changing need of communities.

For this to happen, the LGA said councils need to be able to borrow to build and to keep 100 per cent of the receipts of any home they sell to reinvest in new and existing housing.

Cllr Judith Blake, LGA Housing spokesperson, said “Our country’s failure to build enough homes over the past few decades is putting huge pressure on our existing housing stock.

“Families are having to spend more on rent or mortgages every month and deserve a decent home that is affordable. But as costs are rising, so is dissatisfaction with the standards of new homes.

“Everyone deserves an affordable and decent place to live. It’s crucial that all new and existing homes are up to a decent standard.

“Councils need to be able to ensure quality through the planning system, and to encourage high standards in rented and owned properties across the board.

“To spark a desperately-needed renaissance in council housebuilding, councils also need to able to borrow to build new homes and keep all receipts from any homes they sell to reinvest in building new homes that are of a good quality and affordable.”

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Government unlocks £25 million to deliver more homes

A new £25 million fund has been launched to help local authorities to deliver the high quality, well designed homes that this country needs.

Housing and Planning Minister Alok Sharma this week announced that the Planning Delivery Fund is now open for bids and will support ambitious local authorities and third sector organisations in areas of high housing need to plan for new homes and infrastructure.

Initially opening up £11 million of the fund, councils will be able to apply to help gain the skills or capacity they need to deliver high quality housing growth at scale, pace and implement wider planning reforms. The fund is aimed at encouraging more innovation in the design quality of new housing developments, as well as provide design advice and support to local authorities.

As part of the government’s plans to raise housing supply to 300,000 per year on average by the mid-2020s, a package of measure has been announced to boost local authority planning capacity, support councils to take a proactive role in planning and encourage ambition and leadership in the delivery of new communities.

Others measures announced along with the £25 million Planning Delivery Fund include:

  • a further £3 million funding to support the delivery of the 14 garden villages that are part of the government’s existing programme
  • publishing a consultation on plans to allow the creation of locally led New Town Development Corporations, and help speed up the delivery of new garden towns

Housing and Planning Minister Alok Sharma said “Locally-led developments have enormous potential to deliver the scale and quality of housing growth that we need. By supporting our local authorities, we will be able to unlock more homes where people want to live.

“These measures including the £25 million of government support which will help develop new communities that will not only help deliver high-quality well-designed homes, but will also bring new jobs and facilities and a boost to local economies.”

Across England, the government is currently supporting 24 locally-led garden cities, towns and villages, which have the potential to deliver around 220,000 homes.

Backed by £16 million funding, a further £3 million has been allocated to 14 garden villages in the programme to fund dedicated staff and studies and assessments that are vital to the delivery of garden villages that are key to successful delivery.

The government’s housing white paper in February 2017 committed to the creation of New Town Development Corporations, which would be overseen by the local authority or authorities covering the area proposed for a new garden community, rather than by Whitehall. Government is now seeking views on this proposal.

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Report shows public backing for infrastructure and housing investment

 

More than half of people in the UK rank housing as the most important investment priority for the country, closely followed by renewable energy and major roads, according to a new report published today.

The report, published by Copper Consultancy in partnership with TLF Research, and launched at the Institution of Civil Engineers, found that the majority of people in the UK support infrastructure investment, but do not feel that they have enough information available on the future of infrastructure and housing.

Almost 60% of people stated they would be more interested in infrastructure and development projects if the benefits were clearly explained.

The research showed that almost everyone has a view on the condition of housing, roads and rail, but there is less understanding of infrastructure where the benefits are not explained.

Linda Taylor, managing director of Copper Consultancy, said “What’s clear from the research is that the public wants the opportunity to support infrastructure investment, but unless they understand the benefits, people do not feel equipped to get involved.

“The public wants support in linking projects to day to day life and experiences. We’re left with an investment-benefit disconnect.

“The government and industry have an opportunity to tell a coherent story about the real life benefits that investment in infrastructure and housing delivers. Our research shows that when the benefits are made clear, the public is supportive. If we achieve this, public support for infrastructure could lead to fewer delays to projects and the benefits of infrastructure will be realised sooner.”

President of the Institution of Civil Engineers, Professor Lord Robert Mair CBE FREng FICE FRS, said “The report makes a major contribution to our understanding of the public’s aspirations for UK infrastructure. At a time when infrastructure is key to the future of the UK’s economy, the report’s findings are not only timely but also encouraging.

“The report shows the public can link positive change to infrastructure investment if they understand the benefits as outcomes and impacts to them. Engaging and educating the public – who are ultimately the customers and end users in infrastructure – is therefore crucial. To achieve this, we need to change the language around the subject and make the profession of civil engineering more accessible. It is up to us to take the findings of this report forward and to proactively tell our stories to the public.”

Nigel Hill, chairman, The Leadership Factor said “There is public support for investment in housing and infrastructure but also significant concern that the two are often not sufficiently linked. There is a strongly held view that planning permission should be more influenced by the adequacy of the surrounding infrastructure especially roads, other transport links and schools.”

Click here to view the full report.

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Pre-Budget briefing from industry experts

Housing is set to dominate tomorrow’s Autumn Budget, but it is not yet clear what type of Budget the Chancellor will deliver. Industry experts The Housing & Finance Institute have today published their pre-Budget briefing. The Housing & Finance Institute has laid down a marker for the government in identifying six potential budget themes – and some of the key policies we should look out for in the Chancellor’s statement.

What type of budget will it be?

1. The Big Build Budget: this budget would focus on the largest peacetime building programme since Bevan/Macmillan. Key policy changes would need to open up large land holdings and financial measures would need to substantially increase direct government funding as well as unlock manufacturing at scale, boost skills and boost all tenures from social rent to home purchase.

2. Next Generation Budget: this budget would focus on quality of life, quality of renting and cost of living issues for the ‘generation rent’. It could include wealth distribution support from older to younger generations.

3. Industrial Strategy & Growth Budget: while a ‘big build’ budget would be primarily about housing and be widespread across cities and county areas alike, an industrial strategy & growth budget would be about focusing resources on specific growth areas, such as the Oxford-Cambridge corridor, the Northern Powerhouse, London and the Midlands Engine.

4. Brexit Budget: housing within the Brexit context would be a greater focus on accelerating the application of large scale manufacturing and the build up of skills to meet the needs of housebuilding. It would also need to look at materials within a post Brexit customs and trade context, as well as energy and utilities innovation.

5. ‘Steady as she goes’ Budget: this is not the budget that is expected but it is possible. There is a something to be said for carrying on with an even tiller while everything else is being decided.

6. ‘Care & Repair’ Budget: against the backdrop of the Grenfell tragedy and challenges around elderly care and supported housing for vulnerable groups together with new homelessness duties coming into force and concerns about poor quality landlords, it can be expected that there will be packages of ‘care & repair’ around affordable and social housing, supported housing and remediation, alongside big build and growth commitments.

Industry & Sectors: Winners and Winners?

There are four broad areas that the Budget and supporting documents should cover from an industry and sector perspective: National Government, Councils, Housing Associations and Housebuilders.

To help you navigate the policy announcements we’ve set out what to look out for in relation to housing and housing related infrastructure.

National Government

The main theme of national government is expected to be a strong return to government direct intervention. This has been a dominant theme since Mrs May became Prime Minister, yet it hasn’t translated to large scale intervention. This could be the fiscal event to define what that looks like.

What to look out for:

  • Direct Central Government delivery of housing on public sector land. To be delivered through a powered up Homes & Communities Agency/ Homes England.
  • Immediately before the Budget government action has seen the Communities Secretary start to intervene directly in local plans. A more muscular state has been in the making since the Housing White Paper. This latest move is the first serious flexing of those state muscles, and more of this is expected.
  • One area where the state and local communities could find themselves in direct conflict is the role of a beefed-up Homes England using its dormant new towns powers for land assembly and to grant itself planning for large settlements.
  • In addition, we can expect announcements on measures to speed up the planning process and reduce post approval conditions. This could include a review on substantial changes within the current planning system, for example around assumed development rights and revised guidance on height, tenure mix, affordable housing definitions or density.

All of this will need a lot more money. The adjustment of housing associations out of the public accounts again gives a one-shot multi-billion pound room for manoeuvre for housing. The big question: will it see large central borrowing for a national housing & infrastructure fund to underpin the new muscular state or a huge extension of existing programmes delivered by housebuilders, councils and housing associations.

The runes say that this will be a ‘something for everyone’ budget – that could either be a crowd pleaser or fail to meet expectations that have seen the stakes raised around the £50 billion mark. Certainly, significant new funding in housing and related infrastructure is expected.

Councils

The Councils have made their strongest play for serious investment and a loosening of controls than for many years. In recent days, one reading of Lord Gary Porter’s media rounds suggests that the battle has been in full cry right up to the final clang of the Budget Red Box. Will councils be the victors – with off balance sheet treatment of council funding, billions of pounds of extra investment and extended borrowing and other powers?

What to look out for:

  • More help for those councils who can and are delivering homes and growth with individual deals and extended powers and money for the councils that have housing growth opportunities and that can deliver homes. Perhaps an extended role for Local Enterprise Partnerships too. However, with the tragedy of Grenfell looming large, social care and welfare changes, supported housing, housing market based deprivation and new homelessness laws coming into force, councils may see a more dominant focus on financial support for those areas within their ‘Care & Repair’ responsibilities.
  • The one area where councils may well see a greater housing delivery focus is around new obligations to meet local housing demand. It remains to be seen whether that will be matched by new housing and infrastructure investment and additional powers to allow councils, regions and others to plan, finance and delivery their own local homes and local infrastructure.

Housebuilders

For the housebuilders, this may be a budget of sticks as well as carrots. The Communities Secretary has land banking firmly in his sights.

What to look out for:

  • First and foremost we should expect to see the Government more fully utilising public sector body land. The Land Value capture approach has been tempting Government for many months, but these are not easy ideas to put into practice without causing other market distortions. Even so, it should be expected that a preferred option for capturing more value from the development of public sector land will be announced soon. The thrust of policy is likely to be one of collaborative working across public, private and third sectors together with community engagement for planning, local building trusts and regeneration.
  • In the private sector there are a range of possible policy measures. Some of these include build out directions, planning powers and forms of compulsory acquisition.
  • One effective way to encourage land into use is incentivising the market to use the land more quickly and gain earlier profits from it. This could include tax breaks for purchasers (such as stamp duty holidays), tax breaks for business (such as REITS or large landlords/ investors), short dated additional funding support for infrastructure and off take guarantees for sales or rent.
  • With an industrial strategy focus there is a sharp need to increase skills, Small and Medium Sized (SME) builders, so something around skills, innovation hubs, innovation funds and a step-change in support for manufactured housing are all areas to look out for.

Housing Associations

Housing Associations have had so much praise in recent days from the Government that either there is a great big deal about to be announced or the warmth of the words reflects a view that Housing Associations have what they need to deliver more homes.

Recent days have seen a change in emphasis in the role of the Housing Association not simply as a good manager of homes but as a substantial builder and developer of new homes for rent and for sale. This does indeed go back to the very re-birth of the Housing Associations under Sir Keith Joseph where Housing Associations built housing for low cost ownership as well as houses for rent.

What to look out for:

    • A number of the settlements for Housing Associations have already been announced: rent certainty, extra freedoms and flexibilities, extra affordable housing programme funding. Is there more to come? Probably around supported housing, perhaps on low cost home ownership, shared ownership and rent to buy, perhaps on social rent.
    • But from a Treasury perspective the advantage that the Housing Associations have is that they can leverage their balance sheets using private finance. With the new freedoms and rent certainty, perhaps together with changes of treatment for historic grants, the Housing Associations have a tremendous opportunity to unlock billions extra from their own balance sheets. Perhaps that will be some of the £50 Billion that the Communities Secretary is looking for.

Commenting in advance of the Budget, HFI chief executive Natalie Elphicke said “Housing is a political hot topic. There is an opportunity to capture the public mood and deliver the housing that the public want and need. We can therefore expect housing to dominate the budget, but the tone is vitally important. This budget needs to address ‘care & repair’ issues for housing, such as tower block safety and homelessness, as well as simply building more homes.

“The Chancellor can choose one of six options, or a mix of them. What is clear is that this is an opportunity for the Chancellor to be radical.

“The expectation is that this will be a ‘something for everyone’ housing budget – that could either be a crowd pleaser or fail to meet expectations. The stakes have been raised for housing commitments to be at an all-time high at around the £50 billion mark. With more than £20 billion already committed to housing over this Parliament, it is certain that we should see significant funding commitments for housing and related infrastructure.”

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