An overview of theGovernment’s Housing Strategy
East Midlands Councils8th December 2011
Nick Stripe – DCLG
A Vision for Housing
“A thriving, active but
stable housing market that
offers choice, flexibility and affordable housing is
critical to our economic and
social well-being.”
“Getting house building
moving again is crucial
for economic growth.”
“We will not achieve this by
attempting to control the
market from Whitehall.”
The Housing Strategy
Sets out a package of reforms to:
• get the housing market moving again
• lay the foundations for a more responsive, effective and stable housing market in the future
• support choice and quality for tenants
• improve environmental standards and design quality
Underpinning objectives:
• affordability
• stability
• quality
Context – Government Priorities
• Deficit reduction
• Economic growth
• Social mobility
• Localism & decentralisation
• Reforming public services
• Transparency
For housing, this already means change and reform …..
Smarter regulation
A new approach to
growth
Planning
reform
Social housing
reform
Powerful
incentives Affordable housing
investment
Local market
place
&
housing offer
Decentralisation
Challenges
• Supply
• Demand
• Lending
• Affordability
• Price volatility
• Demographics
• Community views
• Wider economy
House building rates have fallen
40000
60000
80000
100000
120000
140000
160000
180000
200000
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Starts
Completions
0
House Building Starts and CompletionsHousehold projections average 232,000 per year to 2033
Land supply and planning permissions granted are often lowest in the areas of highest demand
Recovering from recessions
THE RECOVERY IN COMPLETIONS, RECESSIONS PAST
(ANNUAL, ENGLAND)
0
50,000
100,000
150,000
200,000
250,000
300,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Years after the peak
Ne
w h
om
es
1980s 1990s 2010s
Tightened lending conditions
-
200
400
600
800
1,000
1,200
1,400
Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
£bn
-2
-
2
4
6
8
10
12
£bn
Stock of Mortgages outstanding (LHS) Net Lending (RHS)
Deposit (%) paid on mortgage completions for house purchase (UK)
0
5
10
15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
%
All
FTBs
Source: CML
Affordability remains a major issue…
2010Affordability Ratios 2000
Affordability ratio England
2010 = 7.0144% of LAs had
affordability ratios >7.7
Affordability ratio England
2000= 4.21
6% of LAs had affordability
ratios >7.7
2000
House price volatility
-10
-5
0
5
10
15
20
25
30
35
40
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
%
Annual house price change in England 1970 – 2010
• Impact on owners,
buyers, sellers,
builders and lenders
• knock on impact to
wider economy
• Upturns vs
downturns
Changing demographics
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500
Under 25
25-34
35-44
45-54
55-64
65-74
75-84
85+
Ag
e o
f h
ou
seh
old
refe
ren
ce p
ers
on
Households (England)
2033
2008
+154%
+45%
+46%
+9%
+19%
+16%
+16%
+10%
Rising waiting lists
Households on LA housing waiting lists
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
1,700,000
1,800,000
1,900,000
2,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
England
East Midlands
Community views
W ould you support m ore house s be ing built in your
loca l a re a ?
0
10
20
30
40
50
60
Homeowner Non-homeowner
% o
f re
sp
on
de
nts
No I wouldn't
Yes I would
Don't know
Source: YouGov survey for National Housing and Planning Advice Unit (NHPAU)
Housing and the economy
Housing and the economy
Housing and
the housing market
Direct effects on
the economy
House building/construction(contributes directly to GDP)
Repairs and maintenance
(contributes directly to GDP)
Expenditure associated
with housing market
transactions
Impacts on wider consumption
through: confidence,
expectations, wealth and collateral effects, and the
characteristics of mortgage debt
Geographical labour mobility/ labour market flexibility
Impacts on work incentives,
e.g. from sub-market rents
Indirect effects on the economy
Capital
investment,
competition and
innovation
Level of
human capital
Long-term
Economic Growth
Macro-
economic
stability and
management
Skills
and
skill
matching
Enterprise formation
Housing Strategy
£30m support for custom home builders
Reconsideration of agreed planning
obligations
Support for locally planned large scale
developments
£400m Get Britain Building fund to unlock
stalled sites.
Additional £50m for
tackling worst areas of empty homes
Indemnity scheme to
provide accessible mortgages for new build
Funding infrastructure
through £500m Growing Places Fund
Releasing public-sector
land with the capacity for 100,000 new homes
Land
Auctions
Build to Rent
Design and
Sustainability
Self
financingRight to Buy
Fraud, tenancy abuse
and high income tenants
Support and protection for the vulnerable
A new deal for older people’s housing
Encouraging more affordable housing
So what next?
• Effective delivery of current programme
• Monitoring the impact
• New models of funding
• Collaboratione.g. Local Authorities and Housing Associations
• Innovation- following HRA Reform- design- business models
• The next Spending Review