Prime Minister Theresa May has pledged £2bn-worth of funding to provide a ‘new generation’ of council housing.
Speaking at the Conservative Party conference in Manchester yesterday (4 October), the prime minister revealed councils and housing associations will be encouraged to bid for the extra money, which will take the government’s total affordable housing spend to nearly £9bn.
She said that in the parts of the country where the need is greatest, homes will be able to be constructed for social rent at well below market level.
The additional money comes on top of £10bn already pledged for an extension of the government’s Help to Buy: Equity Loan scheme and the announcement of greater protection for tenants in the private rented sector.
Mrs May said the party had “listened and learned” in the aftermath of the general election, and had realised that housebuilding initiatives had not gone far enough.
She said: “It won’t be quick or easy, but as prime minister I am going to make it my mission to solve this problem.
"I will take personal charge of the government’s response, and make the British dream a reality by reigniting home ownership in Britain once again.”
The prime minister added that she wanted to deliver the “clearest possible” message to housebuilders that the government would make land available for the construction of new homes – but that in return, they must “do [their] duty to Britain and build the homes our country needs”.
Despite the government’s pledge to build one million homes by 2020, house prices have continued to increase across most of the UK and left many would-be homeowners struggling to afford a deposit.
Recent research by Savills showed only a fifth of households could afford to buy the average new home in London and the south east, where the housing shortfall is most acute.
The estate agent’s report, ‘On track to solving the housing crisis?’, called for more land to be released in the areas of greatest need in order to boost volumes and improve affordability.
Richard Lambert, chief executive of the National Landlords Association, said: “The majority of landlords would agree that more social housing should be built, and it’s about time that the prime minister set aside a significant pot of money to do so.
“[This] announcement should not only provide more available housing for those most in need at rents they can afford, it should also relieve the pressure on the private sector, and choke off the breeding-ground for the minority of rogues and criminals who get away with providing substandard housing and neglecting their tenants”.
But Henry Pryor, buying agent and market commentator, described Mrs May’s housing pledge, and her whole speech, as "woeful".
He said: “It does not go far enough. She clearly understands something to be done, but completely misjudges the scale.
“They had been talking about something to rival Harold MacMillan and his foray into social housebuilding. There may be more to come, but I have not read anything subsequently about a relaxation of help towards local authorities’ purchase of land to build on.
“I do think it is compounded by the fact that developers will all be blamed for the situation. ‘We will provide, now go on and deliver’ is absurd.
“As someone who spends so much time in the housing sector, I know the endeavours being made to deliver products at a profit, and private sector housebuilders are only going to be a tiny part of the solution.
"They can’t be deputised to provide a solution to current problems and make amends for past problems.”
simon.allin@ft.com
