The National Residential Landlords Association has given a frosty reception to the government’s spending review.
Association chief executive Ben Beadle comments: “The spending review does nothing to tackle the immediate pressures in the private rented market.
“It does nothing to support the delivery of the one million new private rented homes needed by 2031 to meet growing demand. It does nothing to support and encourage investments in energy efficiency works to rental properties. And it does nothing to support all those renters struggling to find a home as a result of the Government’s freeze on housing benefit rates.”
Letting agents’ trade body Propertymark is more supportive, with Timothy Douglas – head of policy and campaigns – stating: “Investment in rejuvenating places up and down the country is welcome and ensures that people live, work and want to move into vibrant communities. Propertymark also welcomes additional funding for affordable and social homes as we know this will help meet the UK Government’s ambitious housing target and have the knock-on effect of bringing down the cost of renting in the private rented sector.”
Other parts of the property world have been broadly supportive of the government’s proposals to spend some £39 billion over 10 years local authorities, private developers and housing associations to create social housing. This average of £3.9 billion a year is a significant increase on the £2.5 billion allocated annually under the 2021-26 programme.
Reeves told MPs in the Commons that social housing had been “neglected for too long – but not by this Labour government … A new Affordable Homes Programme – in which I am investing £39bn over the next decade. Direct government funding that will support housebuilding especially for social rent, and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield, and Swindon already have plans to bring forward bids to build new houses.”
Social landlords to raise rents annually by 1% above the consumer price index rate of inflation, for the next 10 years: this doubles the five year rent rise period announced by Reeves last year.
The government is also reported to be consulting on how to implement the return of rent convergence, which allows cheaper social rents to rise more quickly to ensure alignment between rents on different properties. It had been scrapped in 2015 by a former Conservative government.
Alex Slater of Rightmove says: “Today’s news is a really positive boost for the housebuilding industry and a step in the right direction. There aren’t enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market.
“What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest. Hopefully this is one of many steps to come to support the delivery of much needed homes across the country.”
Goodlord chief executive William Reeve comments: “This £40bn commitment could not come a moment too soon. The myriad pressures on the housing market – from rising rents and retreating landlords, to crumbling social properties and escalating numbers living in temporary accommodation – all of it stems back to a historic failure to ensure our housing stock keeps up with population growth. We need to focus all efforts on driving up the number of homes available and close a gap that’s been rising year-on-year.
“Today’s funding commitment is a key announcement for the market and includes other much needed reforms such as a sensible step forward on social rents and £10 billion for financial investments. The big hope is that this money, combined with planning reforms, will see the OBR’s forecast – that house building will hit its highest level in over 40 years by 2029/30 – come to fruition.”
And Richard Donnell, executive director of research at Zoopla, adds: “Increased investment in affordable housing is vital to support the ambitions to build 1.5m homes. The nation can’t spend its way out of the housing crisis and while more money is going in, the costs of development are rising faster than sales values which is reducing the viability of building homes.
“Building the homes the nation needs requires the implementation of the full spectrum of planning reforms, more investment in affordable homes and further demand side support for new home buyers.”
Meanwhile David Campbell – chief operating officer at the National Home Building Council – says: “The target of 1.5m new homes by the end of this parliament is an ambitious one, which is why it’s important the potential of all tenures and all types of housing is maximised. The demand for affordable homes across the UK is acute, and it’s encouraging to see long-term targeted funding for this sector.’
This article is taken from Landlord Today