Cuts Threaten Huge Slump In Affordable New Homes, Housing Associations Warn

[interestrateripoff]

http://www.guardian.co.uk/politics/2010/jun/13/cuts-threaten-affordable-new-homes

Housebuilding in Britain will "fall off a cliff" this year due to a "catastrophic" combination of financial cutbacks and changes to the planning system, the government was warned last night.

The National Housing Federation, which represents England's housing associations, predicted the most vulnerable in society will be the hardest hit, with the number of affordable homes built this year in England slumping by as much as 65%, to 20,390. This would be the lowest number of affordable homes built since 1990, with profound consequences for the 4.5 million people on waiting lists across the country.

The federation said the private sector would also be affected and expressed fears the total number of homes that will be built this year in England would fall below the 100,000 mark, the lowest level for almost a century. Similar problems are predicted for Wales and Scotland.

The previous government estimated there was a need to build a minimum 250,000 homes a year to reach a target of 3m new properties by 2020 if an acute housing crisis is to be alleviated.

"The prime minister and deputy prime minister have repeatedly said public spending cuts will not disproportionately hit the most vulnerable, but if these measures go ahead the impact on housebuilding will be catastrophic," warned the federation's chief executive, David Orr.

Any failure to tackle the housing crisis would threaten a major rift between the coalition partners. Simon Hughes, the Liberal Democrat deputy chairman, has made the issue a top priority, asking Cameron for assurances that the new government "would do better than Labour in building affordable housing".

But the federation said the crisis would worsen if the government did not urgently reconsider its policies. It claimed the decision to scrap regional housebuilding targets, without replacing them with an alternative system, would leave councils free to reject all new social housing developments.

Strange that this VI has no answers to where the money is going to come from to fund it all.

I assume that these are all affordable homes to "buy" rather than rent?

[Mikhail Liebenstein]

http://www.guardian....dable-new-homes

Strange that this VI has no answers to where the money is going to come from to fund it all.

I assume that these are all affordable homes to "buy" rather than rent?

Yet again the UK tries it hardest to prevent people being able to afford a home.  Clearly a lack of new build will ultimately keep prices higher than they should be. 

[non frog]

The Tories will do whatever they can to prop up prices any way they can. The economy depends upon it.

At risk of repeating myself to the point of being boring, I think they will fail.

[Laura]

http://www.guardian.co.uk/politics/2010/jun/13/cuts-threaten-affordable-new-homes

Strange that this VI has no answers to where the money is going to come from to fund it all.

I have my finger on the pulse here:-

From the savings made when housing benefit is reduced to the same level as council housing rents; (this is when BTLers may apply for their 'public service' badges, & not before!)

This should address the 'shortage' of affordable homes

Thus billions will be freed-up to spend on... err, mortgage provision?

The real issue is maintaining interest when a cloud of collective greed & stupidity is always at the forefront

[Frank Hovis]

I don't have a lot of time for David Orr (the ego has landed) but he's right on this one.

There isn't a great deal of point of pouring money into health and education because if people are living in squalor then they and their kids have little chance of bettering themsleves.

[porca misèria]

Yet again the UK tries it hardest to prevent people being able to afford a home.  Clearly a lack of new build will ultimately keep prices higher than they should be. 

Whereas pouring taxpayers' money into things like "part ownership" so they can double the price-to-wage ratio for ever more (not-just-)FTBs, is a sustainable way to keep prices down. Yeah, right.

[jcpricewatcher]

I have my finger on the pulse here:-

From the savings made when housing benefit is reduced to the same level as council housing rents; (this is when BTLers may apply for their 'public service' badges, & not before!)

This should address the 'shortage' of affordable homes

Thus billions will be freed-up to spend on... err, mortgage provision?

The real issue is maintaining interest when a cloud of collective greed & stupidity is always at the forefront

Reducing housing benefit to same level as council housing rents would be a good, fair idea. However, will this government be radical enough to do this?

[ElmbridgeChap]

http://www.guardian.co.uk/politics/2010/jun/13/cuts-threaten-affordable-new-homes

Strange that this VI has no answers to where the money is going to come from to fund it all.

I assume that these are all affordable homes to "buy" rather than rent?

http://www.smartnewhomes.com/Content/Press-release/16791/Number_of_new_homes_soars_by_74.aspx

[Si1]

the National Housing Federation are such a VI - all they care about is more govt money to keep them in jobs - they have zero intellectual authority. zip all.

[Timm]

http://www.smartnewh...oars_by_74.aspx

Yes indeed! The link reads:

The number of new homes being built soared by 74% during the three months to the end of April as the housebuilding industry continued to recover, figures have shown.

A total of 31,038 new homes were registered during the period, up from just 17,859 during the same three months of 2009, according to the National House-Building Council (NHBC).

Private developers led the recovery, with the sector registering a 113% jump in registrations year-on-year to 20,538.

[jareth]

If they want affordable housing costs have to decrease - for everyone. Housing association houses aren't affordable they are subsidsed. Treat the disease not the symptom.

[boynamedsue]

If they want affordable housing costs have to decrease - for everyone. Housing association houses aren't affordable they are subsidsed. Treat the disease not the symptom.

Their construction is subsidised, their rents are affordable. They also help suppress private rents, which the tories don't want, as they are the party of the BTL landlord.

[Timm]

Their construction is subsidised, their rents are affordable. They also help suppress private rents, which the tories don't want, as they are the party of the BTL landlord.

If their rents are affordable, why are so many of them occupied by people who can't afford to pay their rent?

[Frank Hovis]

If their rents are affordable, why are so many of them occupied by people who can't afford to pay their rent?

People who can't afford to pay any rent you mean.

[Darkman]

This would be the lowest number of affordable homes built since 1990, with profound consequences for the 4.5 million people on waiting lists across the country.

Well this is bad news for the crash. We might see a reduction in the short term, but prices rising back in the long term? That's a question not a statement.

 Clearly a lack of new build will ultimately keep prices higher than they should be. 

Yes. But careful, the shortage deniers will have you for that!

However, nothing is that simple is it. What kind of "affordable housing" are we really talking about here? Personally I think it's a myth anyway. If we're talking about 50% ownership, then good riddance to it. It's a CON. A fake, designed to maintain prices while vindicating Govt. of responsibility.

What other "affordable housing" was there? I didn't see any. The plots set aside for social housing were still vastly over-priced anyway. Good riddance to those too.

If those in need of cheap housing can't obtain it en masse, then we reach boiling point and that leads to huge pressure for all house prices to come down.

[Second Time Around]

The Tories will do whatever they can to prop up prices any way they can. The economy depends upon it.

At risk of repeating myself to the point of being boring, I think they will fail.

Agree with you that attempts to prop up prices will fail. What is your evidence that the Tories will do whatever they can to prop up prices? They didn't in 1989-96 and I can recall no stated commitment, pledge or promise to that effect from the Coalition to which we have been ConDemed.

[Si1]

Agree with you that attempts to prop up prices will fail. What is your evidence that the Tories will do whatever they can to prop up prices? They didn't in 1989-96 and I can recall no stated commitment, pledge or promise to that effect from the Coalition to which we have been ConDemed.

agreed

they would rather see the worst of the falls over the coming few years giving chance for a REAL economic bounce before the next election

[Dave Spart]

http://news.bbc.co.uk/1/hi/business/10304456.stm

If only property prices would fall 65%.

[interestrateripoff]

Are they predicting the wrong type of snow?

[Liquid Goldfish]

agreed

they would rather see the worst of the falls over the coming few years giving chance for a REAL economic bounce before the next election

Obviously I hope you're right

But I'm sure DC made a speech where he comitted to keeping house prices up

And he's always going on about keeping interest rates low

[Kazuya]

Obviously I hope you're right

But I'm sure DC made a speech where he comitted to keeping house prices up

And he's always going on about keeping interest rates low

Well DC also acknowledged bubbles in assets like housing in one of his recent speeches.

[hilltop]

Well DC also acknowledged bubbles in assets like housing in one of his recent speeches.

As suspected, he either doesn't know what he is saying or says just what a particular audience wants to hear.

Also, is it wasteful to build houses? If not, why not generate some economic activity, there is plenty of our money locked inside the banks to pay for them.

[non frog]

...

But I'm sure DC made a speech where he comitted to keeping house prices up

And he's always going on about keeping interest rates low

Yes. And please do not confuse the current government with the bunch of halfwits that were in power in the 1990 crash. Apart from the totally different situations between now and then the last crash was driven by the credit boom the Tories started. This time Cameron has the last laugh - it was the Bliar boom. Cameron is nothing whatsoever like Thatcher (for which we must be eternally grateful)

"New" Labour is dead (good) the Third Way quasi-thatcherite drivel didn't work. Thatcherism didn't work. Cameron is something new, whatever rises from the ashes of Labour will be something new. The utter stupidity of the let's pretend free market has blown the whole system to sh1t. This, IMHO, is a good thing.

Cameron is fire-fighting and while he will favour his rich mates at the expense of the poor he wants to be the hero of the hour. Much as I dislike the Tories I have no wish to see financial Armageddon. With the Lib Dems to tone down the right wing nutjobs like Fox and IDS I think, I hope, we might just get through this without a total meltdown.

[Confounded]

Yes. But careful, the shortage deniers will have you for that!

I am one of those who are very sceptical we have a structural shortage of housing in this country. The very fact we have the BBC and mainstream media pumping this message out on weekly basis since 2004 (coincidently when the lending standards got so poor house prices enter the mega bubble phase) makes me even more sceptical.

If you can provide some data that shows we have a shortage of houses (not affordable homes because the current average price of £168k makes it unaffordable to virtually all of the population without help from parents) I would be keen to see it.

From my research to date it shows we have seen a 10% population growth over the last 40 years while housing stocks have increased 30%. This ignores the whole empty house issue.

I genuinely want to be enlightened on this issue (everyone I talk to share the shortage view) it is just facts in this debate are very hard to come by.

[bendy]

Agree with you that attempts to prop up prices will fail. What is your evidence that the Tories will do whatever they can to prop up prices? They didn't in 1989-96 and I can recall no stated commitment, pledge or promise to that effect from the Coalition to which we have been ConDemed.

i have to agree with this - people have seemingly intertwined 'the party of the rich' with 'owning property'. while i think that the tories were after this (property empire building) from early 90's legislation, they then lost to labour in 97 who let it become a free for all. condems will weed out all the middle class and let it crash, probably change a few laws and then the upper class will sweep the property board.

up until the 90's, when britain had some semblance of exporting, the rich could not give a ****** about house prices, shares and dividends mattered, not houses. i'm not sure that this can become the situation again in the global market, but i do think that the blues will smile at seeing a lot of amateur btl landlords go bankrupt, picking up their scraps, especially those only ever in housing.