Category Archives: Housebuilding

Coming soon: Two major London housing communities

Newly built homes

Following a few housing-related bits and pieces announced in yesterday’s Spring Statement, the government has today revealed some more housebuilding news.

According to communities secretary James Brokenshire, two major housing communities will be built in London alongside new railway stations.

The good old government has pledged £250 million to put towards the construction of up to 13,000 homes near the new HS2 railway station at Old Oak Common, East Acton.

And another £320m is to be spent on a new community of 7,500 properties next to Brent Cross West Thameslink station, MP Brokenshire reckons.

Talking of which, the communities secretary said: ‘We are working to create homes, opportunities and thriving communities, especially in London which faces the most severe and unique housing pressures in the country.

‘The HS2 station at Old Oak Common will offer a new gateway to London, while a new station in Brent Cross can be the catalyst to build thousands more much-needed homes.

‘Together, this £570m package of investments will allow thousands of families the opportunity to realise their dreams of home ownership. It will provide up to 20,000 new homes, support new jobs and benefit from new transport infrastructure.’

The government believes Old Oak Common’s new station will ‘transform the area into a vibrant community, supporting up to 65,000 jobs’. Beleaguered HS2 Ltd has been told to get the station open by 2026, which seems quite a challenge.

As ever, here’s the link to the government’s press release concerning these revelations.

Spring Statement: Housing Overview

Yellow Toy House Sitting On Top Of Coin Stack: Real Estate and Savings Concept

Yesterday, central government fiscal announcement fans, was Spring Statement Day – though it’s hard to tell if anyone noticed/cared as it was also Brexit Day, which it is everyday, of course.

So, would you like to know what was revealed? Why not!

According to chancellor Phillip Hammond, the ‘UK economy continues to grow, with wages increasing and unemployment at historic lows, providing a solid foundation on which to build Britain’s economic future’.

There followed a load more stuff about how well Hammond/the government is doing – which seems particularly remarkable coming from a regime that has somehow managed to achieve less than nothing in two years of absurd Brexit negotiations, but there you go.

Anyway, onto housing, which was promised in the headline.

The government says it is ‘determined to fix the broken housing market,’ and that ‘building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable’.

Apparently, the regime is on track to deliver 300,000 new homes a year, as promised. Hmm.

Moving on, £717 million is to be taken from the £5.5 billion Housing Infrastructure Fund and used to ‘unlock up to 37,000 homes at sites including Old Oak Common in London, the Oxford-Cambridge Arc and Cheshire’.

Meanwhile, via the Affordable Homes Guarantee Scheme, the government says it will guarantee up to £3bn of borrowing by housing associations in England to support delivery of around 30,000 affordable homes.

And another £445 million from the Housing Infrastructure Fund will be deployed to unlock over 22,000 homes over on, again, the Oxford-Cambridge Arc project.

The chancellor also said that the government will hold a spending review, concluding alongside the Budget, which will set departmental budgets, including three-year budgets for resource spending, if an EU exit deal is agreed – so better not hold your breath on that one, then.

Here’s the press release covering everything else that happened. 

Now that’s over you can resume your normal position: staring blankly at Brexit.

 

‘Help to buy’ housebuilder leaves home with 700 faults

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A housebuilder managed to complete a home with 700 faults, the property’s unlucky buyers have revealed.

Within days of moving into their newly-built £280,000 ‘dream home’ in Kippax, West Yorkshire, Nicola and Phil Bentley began to uncover a shocking amount of faults left behind by developer, and Help to Buy beneficiary, Persimmon.

According to the couple, they immediately reported the issues but, 10 months on, and despite complaining weekly, the housebuilder has only addressed 10% of them.

And what a list of horrors the unlucky Bentleys discovered – view this absolutely absurd gallery of incompetence and unacceptability.

Nicola said: ‘We are living in a building site, we haven’t been able to put any photos up on the walls and there is just a TV and sofa in the living room.

‘We don’t like to wallow in self-pity but this has dragged us down so much, it has nearly broken us as a family. It’s been horrendous and the worst year of our lives. We wish we had never done it.

‘This is our life savings, we have put everything into the house. I thought we had a dream home but it’s turned into a nightmare from hell.’

Interestingly, though the Bentley’s were shown around a show home, they claim the developer wouldn’t allow them to inspect the actual  property they bought, being told that it was ‘against Persimmon policy’.

However, there is some good news, for Persimmon anyway: the firm’s pre-tax profits rose 13% to £1.091 billion last year.

It developed 16,449 homes in 2018 – of which 7,970, were sold to people using the Help to Buy scheme! The system works! But maybe not for much longer: housing minister James Brokenshire is currently reviewing Persimmon’s participation in the scheme, so watch this space.

 

Towards a housing finance system that works

By Alistair McIntosh, CEO HQN

It’s baffling, isn’t it? You go to see a housing association and they tell you how hard it is to get social rents to stack up. And they’re right. Then you read the new Shelter report which says social housing pays for itself. And they’re right too. How can this be?

It’s because we are looking at everything the wrong way. Shelter is bringing in the savings to benefit bills from charging social rents instead of private rents. They are saying that this is how the Treasury should do its sums.

That’s how to get to the true costs and benefits. But this is not part and parcel of the viability appraisals done by individual associations. And for a very good reason. As things stand it doesn’t matter a jot. They stand or fall based on their own accounts, not those of the UK. This is what is leading to short-term every-man-for-himself thinking. It’s got to change. We must take the blinkers off. And we are not the only ones.

Hitachi is telling our government that they’d get things done faster if they just bit the bullet and nationalised big projects. Of course, they are talking about nuclear power stations. But there is something in this for us, too. If we are building new towns or doing a complex regeneration, it could be a good idea to get government to hold the ring. The risk is just too big for associations, councils or companies to take on by themselves. Something is bound to go wrong. It usually does. You will always hit technical problems that you didn’t foresee. That’s just the way it is. And if you are relying on profits from sales, that will come back to bite you at the worst time.

A few years ago, I was talking to some tenants on an estate that was going to be flattened. And, boy oh boy, did it have issues. Something needed to be done. The developers were promising to replace it with the New Jerusalem.

Yes, every tenant would get a splendid new home. It did look very exciting. What did I say? Don’t bother listening to these promises. The people making them will not be the ones delivering them down the line. There will be some type of cock-up and the plans will change.

It won’t be for the better. The risk would be a lot less if the state was in charge from the get-go. And of course it would bring in investors and experts to do the day to day lifting. If we gave tenants firm promises at the start we could break some logjams, couldn’t we?

So, for the really big stuff I think we do need to look to government. But most of the time councils and associations are the right answer. The Green Paper needs to make them more accountable. But how do we put them on a better financial footing? We need a new financial regime for housing.

At the moment we have a clash. Housing associations and councils struggle to put the money in place to build homes at social rents. It doesn’t stack up. Yet the Treasury should be crying out for them to save money and boost the economy. How do we get back on track?

First things first. The Treasury should run a check on the Shelter figures. They will be right as Capital Economics put them together and they are a top-notch outfit. But there is always room for debate on these things as there are so many assumptions about what happens and when. So knock the heads together and just agree a figure on the savings and use it to boost the grants to councils and associations today. That’s a quick fix.

But we also need to change how we do accounts for social housing. These need to show the savings to the benefits bill of low rents. And landlords must be compensated for this by the government so they can stay viable. According to the Shelter figures, there should be enough money in there to keep the landlords and the Treasury sweet.

Does this sound fanciful? Well, it’s the best I can do. And it’s a hell of a lot better than going on a roller coaster ride of relying on sales. You’re bound to come off at some point. It’s time for a fresh start. We will need to save money and boost the economy under Brexit. Cutting rents and building homes is a win-win. Go for it.

Over 630,000 living in ‘hazardous conditions’, report

A major report has revealed that 631,000 people in England are living in ‘hazardous conditions’.

In response to 2017’s Grenfell Tower disaster, and commissioned by homelessness charity Shelter, ‘A Vision for Social Housing’ consulted over 31,000 people from across the country and brought together 16 commissioners from across the political spectrum.

The report reveals that 3.1 million people in England need a social home – and of the 1.27m in greatest need: 631,000 live in hazardous conditions; 240,000 live in overcrowded accommodation; 194,00 live with ill health or disability; 128,000 are rough sleeping and hidden; and 79,900 are homeless and in temporary accommodation.

Asking ‘what is the future of social housing’, the authors state that the country is ‘feeling the effects of 40 years of failure in housing policy’ and specifically blame:

  • A failure to build enough homes. Over the past five years, housebuilding has averaged 166,000 a year, yet government wants to deliver 300,000 homes a year
  • Huge waiting lists for social homes. Today, 277,000 people are homeless
  • The explosion in the numbers renting privately, unable to buy or access social housing
  • Huge rises in welfare costs to government, driven by more people renting privately at higher costs

According to the report, if the crisis is to be solved, 3m new social homes must be built over the next 20 years.

The commission warns that without a ‘radically different approach’ the country faces a future in which:

  • A generation of young families will be trapped renting privately for their whole lives, while more and more will face living in dangerous accommodation or going into debt
  • By 2040, as many as one-third of 60-year-olds could be renting privately, facing unaffordable rent increases or eviction at any point
  • £billions more in welfare costs will be paid to private landlords due to a lack of more affordable social housing
  • Over the next 20 years, hundreds of thousands more people will be forced into homelessness by insecure tenancies and sky-high housing costs

Nadine, a private renter who contributed to the report, lives with her teenage daughter and works two jobs – yet still struggles to keep up with the rent. She said: ‘My rent is over half my monthly income, so that’s where most of my money goes. It’s hard to afford other things we need. I am cutting back and doing the best I can, but there are times we can’t live on the money we’ve got.

‘We budget on our food and it’s very rare that I buy anything full price. I shop around to take advantage of all the vouchers and deals I can get.

‘No one should have to spend more than a third of their income on rent. If they are going to set a minimum wage, then there should be places you can afford to rent on that income – how can it be a living wage if you can’t find anywhere to live on it?’

One of those who contributed to the report’s recommendations on reforming social renting was Rob Gershon, Lead of the HQN Residents’ Network, who said: ‘I’ve always thought of myself as incredibly lucky to be a social housing tenant… On the two occasions I’ve come to rely on social housing, it has been there to make sure my family has had somewhere to live.’

The commission recommends:

  • Setting clearer standards
  • Ensuring speedier redress for individual complaints
  • Proactive enforcement of regulation to protect social renters
  • Giving residents a voice in landlord governance and decision-making
  • Giving residents a voice in decisions made by national, regional, and local government

Click here to download the full report.

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