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Solving the housing crisis

PlaceShapers have responded to the CLG inquiry into the viability and sustainability of housing associations, setting out how its homes and services support the Government’s delivery of its housing priorities.

PlaceShapers incoming chair John Giesen said: “As Placeshapers we want to play our part in delivering the Government’s commitment to end the housing crisis. We welcome the Committee’s inquiry as this provides an opportunity for the sector’s true value and diversity to be understood.”

Around 34,000 new homes will have been added by PlaceShapers in the four years to 2015/16 with projections of at least 30,000 more new homes between 2015-20, equivalent to more than 7% growth.  Around 20% of recent new developments are low-cost home-ownership products.

But the response warns that Right to Buy, with rent cuts and welfare reform, could seriously jeopardise PlaceShapers capacity to support the government’s ambition on the supply of new homes of all types if replacement costs are not funded effectively and in full and if homes that would be the most difficult to replace are not excluded from the scheme.

The funding gap would be anything from £20k - £80k in the North.  In the Midlands it will create gaps of £30 - £50k.  In the South, replacement costs are higher but valuations of existing stock are higher too meaning sales may improve cash positions in the short-term. Over time, sales would degrade viability unless full value and rent income is recovered through replacements. Higher replacement costs suggest funding gaps of up to £40k per unit. Perhaps the biggest issue in high demand areas will be the inability to re-provide in the same locations given the limited availability, cost and competition for land.

The response gives proposals on how the effects can be mitigated allowing the Government to still deliver on its housing supply plans.

John Giesen said: “Britain’s housing crisis can only be solved with a massive housebuilding programme.  We share the Government’s commitment to offer home ownership.  However there remains a very real requirement for social housing for those on very low and variable incomes where home ownership is not a reality in any circumstance.

“PlaceShapers are key providers with more than 90% of us actively developing and providing new homes. We have the development expertise and local relationships to unlock sites, to negotiate agreement with those who may initially oppose new homes and to ensure the necessary investment in the wider community.  Our financial capacity to add to supply is constrained by the current market and funding environment and is at risk as a result of the proposed Right to Buy and reductions in rental income and our response sets out proposals to mitigate these factors and play our full role in ending the housing crisis.”

The PlaceShapers “Localism that works” report provides excellent examples of added-value work with 16 inspirational case studies and a foreword by the Rt Hon Greg Clark MP in which he said: "This report is a vivid illustration of how PlaceShapers engage with the future of their estates and communities. Across the country they have helped people return to work, reduce crime, create jobs and transform local neighbourhoods. These case studies are a testament to what local initiative and local innovation can do for local communities.”

The response covers

Proposals on the Right to Buy
Proposals in the Budget
Welfare reform proposals
The role of the Regulation Committee of the HCA
The accounting consequences for the national debt of the government’s proposals
Sector consolidation

To read the full response click here.


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