Theresa May Says She Wants to Build More Houses
Last November, in his Spending Review, former Chancellor George Osborne told us he was doubling the housing budget and was about to start the country’s biggest building programme since the 1970s.
This doesn’t mean a great deal, though, as there’s been no big projects since the late 1970s anyway and Osborne’s programme involved some clever subsidies to private construction companies, as well as more financial help for first-time buyers. There was also a small amount of public funding earmarked for land remediation.
The doubling of the housing budget sounded impressive, but in reality it would go from £1 billion to £2 billion – the government spends more than ten times that on housing benefit alone!
The truth is that the UK’s local councils built almost 176,000 new houses in 1970 and just 1,480 in 2016! David Cameron had the worst record for house building of any PM since the 1920s.
So, what can this new broom do for the housing market?
- Theresa May and Chancellor Philip Hammond can remove the cap on local authority borrowing for construction so LAs can invest directly more;
- they can allow the LAs to use state-owned land for housing projects and also commission builders to construct more affordable homes there;
- let the Treasury give capital grants to housing associations (especially now the cost of government borrowing is low). There are many projects just waiting for funding;
- they can dissolve Osborne’s policy of offering the right-to-buy to housing association tenants as this removes the revenue-base from HAs and prevents them building more properties;
- they can allow ministers to just get on with building more properties without worrying about whether they’re for sale or rent – a big hindrance in obtaining funding and planning permission;
- let them stop worrying about the cost – remember the £21 billion housing benefit budget? Allowing people to own their own homes or pay less rent will cost the state less in the future, and
- let them seize the day, because the construction sector is contracting already and more state-funded projects, leading to more jobs, will be a huge shot in the arm for the economy all by itself.
Come on, Theresa, you can do it!