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MIPIM: ‘Affordable Homes Programme needs a complete reset,’ government MMC champion tells delegates
The UK government’s champion for modern methods of construction (MMC) told delegates that the flagship Affordable Homes Programme (AHP) needs to be completely reset.
Mark Farmer, chief executive of Cast Consultancy, made the remarks as part of a panel discussion called ‘Making UK housing more affordable’ at the MIPIM conference in Cannes, France.
At the UK Stage in the Verrière Grand Audi during the international property event, Mr Farmer explained why the first thing he would do if he was a new housing minister would be to “push for a complete reset of the Affordable Homes Programme”.
He said: “Rob [Perrins, chief executive of brownfield specialist Berkeley Group] mentioned grant. I think we’ve just got a fundamentally out of kilter grant regime in the UK.
“The gradual reduction over the years in grant has pushed most housing associations into the need to do cross-subsidy and effectively become developers to prop up their core business model.
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MIPIM: we need to move beyond looking at housing in isolation, says chair of Southampton City Region“And that’s got unintended consequences, naturally then creates a synchronised downturn. So we haven’t got a counter cyclical pushback from affordable housing providers.”
Mr Farmer was speaking around one month after London’s biggest social landlords revealed that affordable home starts in the current financial year are expected to have fallen by 76%, to 1,769 in the capital, compared with 7,363 the previous year.
The Farmer Review author, an influential 2016 independent government review of the UK’s construction labour model entitled Modernise or Die, also said he believes housing needs to be viewed in the context of social infrastructure in a way that includes the health and social care budget.
Mr Farmer added: “If you do that holistically and you get the Treasury to buy into that, then there is absolutely a business case for massively increasing levels of grant for affordable housing.”
Earlier in the session, Mr Perrins also called for the AHP to be dishing out billions of pounds more a year than it currently does.
He said: “I think we need every part of the market to work, we need the private house builders who do the cross-subsidy model. But the cross-subsidy model doesn’t produce as many homes as required. The grant settlement needs to be more like £4.5bn a year.”
The current AHP will distribute £11.5bn between 2021 and 2026.
Mr Perrins added: “We want housing associations and councils to build but the associations pulling out of development is a real concern at this point in the market.”
Inside Housing has also spoken to a number of senior local authority leaders and housing professionals about how the investment they are seeking in Cannes aligns with their housebuilding and development ambitions.
Cardiff Council’s assistant director of development and regeneration spoke of the challenges of spending social housing grant and why MIPIM offers a chance to create growth and jobs across the region.
Meanwhile, the chair of the Southampton City region talked about the importance of moving away from looking at housing as an isolated problem and the need to build the right type of homes in the area.
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