Last Tuesday’s publication of national housing statistics provided a phenomenal vindication of the coalition government’s housing strategy. It must be true, Housing Minister Grant Shapps said so.
“Far from the predictions of the doom merchants, today’s figures show work has started on over 15,000 new affordable homes since last September – a massive increase on the previous six month period. This is clear evidence that our efforts to get Britain building are starting to yield impressive results.”
Now he is right that 15,000 new starts is a massive increase on the previous six months. Yet it doesn’t seem to be the most intelligent of things to say for Mr Shapps to compare this figure with the previous 6 months when that period marked a decline from 13,630 the first six months of the previous year, to a miserable 429.
How does the 15,269 compare with the same period in previous years? October-March 2010/2011 saw 35,737 starts, and the year before that there were 41,821. By any standards the 15,000 marks a “massive” decline and it’s certainly not an “impressive” result.
Of course, it is completions that the government will be judged on. They are what matter. Here the picture was more presentable for them though not exactly impressive. Total “affordable housing” completions for 2011/12 were 51,665. Rather than a great leap forward in tackling the housing crisis it was a lower figure than the previous two years: 53,155 in 2009/10, and 55,860 in 2010/11.
If you look at the make up of this “affordable” housing, the best you can say is that they are so to speak treading water. For 2011/12 there were 33,227 completions for ‘social rent’ (council housing and housing association homes). This marked a fall on the previous year when 36,662 were completed. £2009/10 saw 30,921 completed. “Affordable home ownership” completions were roughly 25% down on 2009/10: 15,126 compared to 20,299.
When you look at the make up of the new starts the situation looks even worse. “Affordable” home ownership starts for 2011/12 were 3,448 as compared with 11,220 in 2009/10 and 12,151 in 2010/11. More worryingly we see a truly massive decline (no hyperbole required) when it comes to social rent, with only 1,048 starts in 2011/12 as compared with 39,501 in 2009/10 and 35,690 in 2010/11.
Let’s be charitable and add the new “affordable rent” (up to 80% of market rent) starts which have kicked off their new programme – 11,130 – to the social rent. Even then you still only have one third of the number of social rent homes completed in 2010/11. Of course, the new “affordable” rents will be unaffordable to most people on the housing waiting lists, in any case.
Shapps has said that the government will succeed in having built 170,000 “affordable” homes by 2015. There is, however, considerable scope for doubt. Inside Housing, in investigating the 68% fall in affordable house starts has discovered that the top 50 developing Housing Associations have lined up only enough land to build 49,978 homes by 2015 out of the 99,604 they have said they will deliver. Sites have yet to be found for 16% of the 29,931 homes they plan to build next year.
Inside Housing has also revealed that 74 Councils have accepted £67 million of ‘commuted sums’ paid in lieu of development sites in 2011/12. This compares with 51 Councils accepting £28.9 million in 2010/11 and 39 Councils accepting £23.4 million in 2009/10. Essentially these Councils are increasingly accepting developers’ arguments that it is not ‘viable’ for them to include affordable housing schemes in the “current economic environment”.
None of this bodes well for the predicted 170,000 “affordable houses” by 2015. However, even if this number were built, such a figure is completely insufficient to address the housing crisis. The government’s own estimates suggests that new household formation adds around 230,000 households each year requiring accommodation. The previous government in 2007 estimated that 240,000 new homes were needed each year to take account of demographic changes. Neither they nor this government have got anywhere near this figure. Just over 109,000 homes were built in 2011, very slightly up on the previous year.
There has also been a 41% reduction in new construction orders for public sector housing. There was just £78.9 million of new work ordered in the first three months of the year compared to £132.8 million in the first quarter of last year.
Mr Shapps can continue to paint up failure as success but the more he does it the more absurd he will look. The private building market will not address the crisis because their concern is not housing need but profit. The longer the government refuses to face up to the need for a large scale Council house building programme then the housing crisis in Britain will continue to get worse.