Boris Johnson’s New Deal is ‘bad deal’ for housebuilding, says Shelter chief

There will be 84,000 fewer homes delivered this year thanks to the disruption of Covid-19, says housing charity Shelter, in a plea for urgent Government action to prevent a deepening housing crisis.

But instead Prime Minister Boris Johnson announcement said that the Government’s £12.2bn Affordable Homes Programme will not be fast-tracked as the charity requested. It also appeared to say that the programme will be spread over eight years, not five as originally promised in March’s Budget. The Ministry of Housing Communities later tweeted to say that the funding is “over five years with additional funding to support long-term partnerships with the sector over eight years”.

Today further details on how the Affordable Homes Programme will be spent have been announced. As set out at Budget the funding is over 5 years, with additional funding to support long-term partnerships with the sector over 8 years

— Department for Levelling Up, Housing & Communities (@luhc) June 30, 2020

An MHCLG spokesperson stressed that today’s announcement was “not a cut” and told The Big Issue that the money invested in the programme will be spent in the first five years with delivery completed in eight years.

The statistics, from research carried out by estate agent Savills on Shelter’s behalf, warn that overall output will drop from 255,000 new homes in England last year to just 171,000 this year as the pandemic forced building sites to close during the lockdown.

Stalling housebuilding could also see 116,000 construction jobs lost across the sector with the worst-case scenario estimate showing that as many as 318,000 new homes could be lost over the next five years.

As well as the disruption from the lockdown, normality is still some time away on building sites with necessary social distancing reducing capacity while the possibility of a protracted recession could also trigger reduced demand for market sale homes and a heavy reliance on private instead of social homes.

The Shelter research warns that this could be the lowest number of social homes built any year since World War II with a paltry 4,300 social rent homes delivered in this financial year – a yearly drop of 30 per cent. The charity insist that number would not even be enough to satisfy demand on waiting lists in a town like Wakefield in West Yorkshire, let alone the rest of the country.

Facing the prospect of rising unemployment and homelessness and the Government’s commitment to ending rough sleeping, Shelter wants the Government to bring forward the £12.2 billion they have promised to fund their affordable homes programme over the next five years. They believe that fast-tracking the cash over the next two years could plug gaps and save tens of thousands of jobs.

So now we discover this 'FDR' speech cuts money for affordable housing—£12bn over 5 years in Budget 2020, now £12bn over 8 years. What an absolute fraud. https://t.co/8gI0ohWsXU

— Ed Miliband (@Ed_Miliband) June 30, 2020

It was against this backdrop that the Prime Minister had promised to “build, build, build” as he set out the Government’s plan for the Covid-19 economy in a speech in Dudley this morning. Part of his multi-billion pound New Deal was a promise to bring “the most radical reforms of our planning system since the end of the second world war”.

He also revealed that the £12bn programme would now build 180,000 new affordable homes for ownership and rent over the next eight years.

Johnson vowed: “To build the homes, to fix the NHS, to tackle the skills crisis, to mend the indefensible gap in opportunity and productivity and connectivity between the regions of the UK.

“To unite and level up. To that end we will build, build, build. Build back better, build back greener, build back faster and to do that at the pace that this moment requires.”

But Polly Neate, chief executive of Shelter, has slammed the Prime Minister’s annoucement. She said: “Despite all the bluster about building new homes, the Prime Minister has today cut his government’s housebuilding budget by a third each year. It’s quite incredible that the he thinks he can build more homes with less money.

“With the housebuilding sector teetering on the brink, we need rapid investment but instead the government has slowed the Affordable Homes Programme for three years. This isn’t a new deal, this is a bad deal. Hundreds of thousands of new homes and jobs are at risk.

“No planning reform of any size or shape is a substitute for a funding cut, let alone reforms that will only result in a small amount of bad quality housing. We’ve already seen what happens when you take the blockers off bad housing – families end up in dangerous, overcrowded, rabbit-hutch homes. Far from bouncing forward this is stumbling backwards.”

It’s quite incredible that the he thinks he can build more homes with less money

An MHCLG spokesperson responded to Shelter’s report by insisting that they delivered more new homes in England last year than at any point in the last 30 years.

The spokesperson said: “Building the homes the country needs is central to the mission of this government and is an important part of our plans to recover from the impact of the coronavirus.”

In Scotland, The Scottish Federation of Housing Associations, Shelter Scotland and the Chartered Institute of Housing Scotland want parties to commit to an investment of £3.4bn in house building over the five years from 2021 to 2026 to “kickstart the economy”.

The Scottish Government has previously announced a delay in meeting their target of building 50,000 new affordable homes.