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Tory housing policy challenges the future of housing associations

Anastasia Zawierucha | Moat

4 min read Partner content

Labour MPs have criticised Conservative housing policies as unrealistic and threatening to the future of ‘scarce’ housing stock. 

Housing associations and MPs came together to discuss housing in the UK at a Labour fringe event yesterday.

Clive Betts, MP for Sheffield South East and chair of the Communities and Local Government select committee, was not impressed with the recent house building commitment by the Conservatives, saying:

“We have a housing minister who has just committed to building 200,000 houses a year, not enough, but in fact is remarkable that this commitment has come from someone who has no policy and no resources. I am not sure how he is going to deliver it. It’s a big piece of magic that Brandon Lewis has just come up with, because the only policy commitment since the election has been to reduce the rental income of housing associations so that the development programmes have been shot to pieces overnight.”

Mr Betts added that if the UK is to build 300,000 homes a year it could not rely just on the private sector.

“Even in the heyday of house building, the private sector could not fill the demand and this gap was filled by social housing built by local councils – who regularly in the 50s, 60s and 70s built 100,000 homes a year,” this is compared to roughly 2000 in 2014, he said.

Mr Betts commended housing associations for their continued expansion, but expressed concern that the Government’s changes in rent would ‘undermine’ their commitment to build homes or that houses would be built at rents people could not afford.

The CLG committee chair called for local subsides for social housing, saying it would allow Labour “to make a distinction” between its policies and those of the conservatives.

“If you build houses at social rents, as opposed to market rents, and then rent them off, the savings on the housing benefits bill, over a 17 year period, will actually cost the public purse less.”

Mr Betts also called for the Government to do more to help small builders who got “decimated” during the recession as well as address the skills shortage in the construction industry.

Shadow housing minister Roberta Blackman-Woods MP said when addressing the “huge housing crisis,” Labour would “be starting a conversation with lots of local authorities and local communities to commit to tackling the housing crisis and calling the Government to account for their lack of actions that are not delivering enough houses, and some of their policies that are putting very scarce resources into supporting some people to get on the housing ladder but are not delivering the quantity of housing that we need.”

Of those policies, many of the audience were particularly concerned about the Government’s policy to let housing association tenants buy their homes at a discount under the Right to Buy scheme.

David Montague of L&Q said housing associations were faced with a choice of either a voluntary or a statutory Right to Buy.

‘It was our view that a voluntary Right to Buy was better in the long term,” because a statutory scheme would threaten their classification as independent bodies, he said.

The panellists expressed concern that the new policy would force the sale of housing associations’ housing stocks while not giving them the financial ability to replenish it.

Paula Khan of Metropolitan warned that finding the funds would be a challenge because they would have to come from local councils.

Housing associations have until Friday to decide whether they will sign up for the voluntary agreement.

At the event, Moat released the preliminary findings of a research study, written by Andrew Heywood. Titled ‘A Tale of Two Sectors’, the paper offers strategic perspectives on the housing sector’s current challenges as well as new opportunities.

A Tale of Two Sectors ’ looks at recent housing policy changes in the context of the impact on housing associations and local authority business plans. It involved over 24 interviews involving senior professionals from within the housing, local government and finance sectors, analysing their views and making projections on likely operational responses.

The  study has so far found a divergence of views on the path ahead – a tale of two sectors. But it has also found a determination among housing providers to be a part of the solution; the housing crisis will continue to worsen without new development and providers are actively looking at a range of options for making this happen, including altering the tenure mix.

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