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Budget 2020: what the housing sector wants from the chancellor
James Wilmore sifts through the submissions from the sector’s biggest players to find out what they want from the Budget on 11 March. Pictures by Alamy and Getty
In just under two weeks’ time, cabinet newcomer Rishi Sunak will deliver the government’s Budget. With promises of a spending spree on a scale the country has not seen since the pre-austerity era, sectors are furiously lobbying to get a slice of the much-anticipated government giveaway.
The housing sector is no different. Trade bodies and charities have spent recent weeks drawing up Budget submissions for the Treasury, which include calls for funds to fix the housing supply crisis, improve building safety and tackle regional inequality.
Here Inside Housing sifts through the submissions from the sector’s biggest players to find out what they want from the Budget on 11 March.
Building safety
Building safety remains high up on the agenda as the sector continues to grapple with the wide-ranging implications of the Grenfell Tower tragedy.
The National Housing Federation (NHF) calls on the government to launch a ‘building safety fund’ to help fix all dangerous forms of cladding – not just Grenfell-style aluminium composite material (ACM) cladding – and fire doors.
“This commitment to fund all remedial works upfront would mean building owners of all types can carry them out quickly,” its submission states.
“The fund would increase the speed of these works and would provide assurance to people whose homes are affected.”
The G15 group, whose London-based members own around 10% of England’s tall buildings, has demanded three key actions from government.
First, it wants “suitable guidance” to ensure its members are “prioritising action on the least safe buildings”.
It also calls for better government advice on interim fire safety measures and instructions on how long they should be in place for, and a realistic timeline for the remediation of buildings.
Its final demand is for a return to a “functioning” mortgage market for leaseholders in buildings with dangerous cladding through government action. It argues that this could be achieved through a “government-guaranteed insurance product” to protect leaseholders from unexpected future costs or a government buyback fund to enable households who need to move to do so.
The group also argues for the government to provide loans to help leaseholders and landlords of buildings not covered by the current ACM fund.
It warns the “uncertainty” over “very large bills” for housing associations is affecting investment plans and will lead to “fewer affordable homes being built”.
The submission states: “All G15 members have examples of real schemes delivering thousands of affordable homes which have been postponed or cancelled due to the current uncertainty.”
Environment
With the government targeting net zero carbon emissions by 2050, industry bodies have raised questions over the current approach to housing.
Under the proposed Future Homes Standard, fossil fuels will be banned from heating new homes from 2025. Trade groups have tentatively welcomed this but warned ministers that more focus should be put on retrofitting existing homes.
The Northern Housing Consortium (NHC) says current properties “will remain by far the biggest residential polluters”, with 80% of the homes in use in 2050 already built.
The group says a Conservative manifesto pledge for a ‘social housing decarbonisation fund’, amounting to £710m over the next four years, is a “welcome first step”.
“[Current properties] will remain by far the biggest residential polluters”
However, it calls for investment specifically in Northern communities “through retrofitting houses and regeneration by using decarbonisation as the catalyst for wider improvement”.
The Local Government Association points to the forthcoming National Infrastructure Strategy as “an opportunity to provide capital funding for the delivery of environmentally friendly homes and commercial buildings”.
It also echoes the calls for retrofitting existing homes.
The Royal Institution of Chartered Surveyors warns that an “overhaul” of the approach to cutting carbon in existing homes is needed. It adds that the government must commit to sustained funding and financial incentive mechanisms for retrofitting for low-income and ‘able to pay’ households.
The Home Builders Federation is in support of “industry collaboration” towards net zero but argues that “consumers remain sceptical about many of the changes to dwellings that will need to occur in a relatively short space of time”.
Affordable homes funding
Uncertainty, again, is the word that crops up when it comes to the sector’s feelings over investment in affordable homes.
With the government’s current Affordable Homes Programme due to end in March next year, many housing associations have been forced to put the brakes on development plans, the NHF explains.
“As a priority in this Budget we ask the government to confirm additional funding in the existing Affordable Homes Programme beyond 2021,” the NHF’s submission states.
Housing secretary Robert Jenrick has promised a more generous Affordable Homes Programme, but there is a question mark over whether it will hit the levels demanded by housing bodies.
The NHF says that £12.8bn of annual government investment is needed in real terms over the next 10 years to build 145,000 affordable homes a year.
“[Grant allocation] virtually eliminates the use of social rent funding in the North”
This would avoid a “cliff-edge” where development would stop, it says.
The CIH echoes the £12.8bn call. While it admits that it is a “considerable” sum, the group argues it is not out of kilter with investment in private market initiatives, such as the Help to Buy or the Home Building Fund. Three-quarters of government spend on housing currently supports the private market, the CIH says.
The NHC supports the £12.8bn figure but has urged a re-think on the formula to calculate how money is distributed geographically. It brands the current formula, which concentrates funding to areas of “high affordability pressure”, as a “blunt tool”. “This virtually eliminates the use of social rent funding in Northern areas, despite a stark need,” the NHC says.
More funds would enable government to demonstrate early results of its commitment to levelling up, its submission states.
Shelter also picks up on this theme. The charity notes that only 10 councils across the North have been able to bid for capital grant to build social rent homes since 2018.
Homelessness and welfare
In one of prime minister Boris Johnson’s eye-catching pronouncements, he has branded homelessness a “scourge” on society.
This was backed up by a manifesto promise to end rough sleeping by 2025.
Crisis calls for “long-term funding” to ensure the “full potential” of legislation, such as the Homelessness Reduction Act, can be realised. This would allow councils to “commission and implement evidence-based interventions” to address homelessness, it says.
The charity flags that the ‘new burdens’ fund, which helps councils to implement the act – is due to end in April.
The NHF calls for a “revised rough sleeping strategy, with a focus on ensuring funding is joined-up and secure”.
“Long-term funding [would allow councils to] implement interventions”
Several groups urge more funds for supported housing in areas where supply is falling. In particular, the NHF says support costs should be ringfenced and councils should be allocated £1.4bn a year.
On welfare policies, the Chartered Institute of Housing (CIH) wants Local Housing Allowance rates to return to covering 30% of local rents. Shelter says this is “the only solution that will immediately relieve the pressure on families”.
Turning to the widely condemned Universal Credit system, the CIH says there is a “strong case” to shorten the first assessment period for claimants with no other income to 15 days. This would cost around £125m annually, the group estimates.
The NHF says that new claimants for Universal Credit should be given an initial payment earlier.
The CIH also makes a fresh plea for the bedroom tax to be abolished as it has “not met its stated objective” of saving public money and is “pushing many households into hardship”.
The £20,000 benefit cap should be abolished too, as it is putting households at risk of homelessness, the CIH argues.
Levelling up
The city of Liverpool – the NHC wants a high-speed rail link between Manchester and Leeds, which will eventually link Liverpool and Hull (picture: Getty)
After “getting Brexit done”, Mr Johnson has another favourite slogan: “levelling up”.
Following years of Conservative promises centred around the Northern Powerhouse, the prime minister has vowed to finally tackle regional inequalities.
Sector trade groups are keen to keep his feet to the fire. The NHF urges the government to “kick-start its commitment” by investing at least £1bn annually to renew towns, cities and communities.
The NHC urges a “sustained real-terms increase in local government funding”.
It points to research showing a North-South divide, as average net spend on housing services among Northern councils has plummeted 54% since 2010/11, compared with a 34% fall across the rest of England.
“[Levelling up funding] would build at least a million more homes”
The NHC also calls for a “national centre of specialist housing and planning expertise” to be established in the North and be open to all councils.
Levelling up, the group concludes, would help councils in the North build “at least a million more homes, including hundreds of thousands of affordable homes”.
The G15 also trumpets the benefits of a more equitable spread of funding to ensure the “future success of the United Kingdom”.
It calls for a high-speed rail link between Manchester and Leeds – and eventually linking Liverpool to Hull – to be prioritised over “all other large-scale infrastructure investments”, including Crossrail 2 in London.
The G15 proposes that a hub for homes to be manufactured offsite should be built “where it will have the greatest economic impact”. The group also suggests that the government’s ‘First Homes’ initiative should be “targeted at the places where they can be most effective”.
