National Housing Federation - September 2016
Gavin Barwell speaks to the National Housing Federation, Birmingham.
Introduction
It’s a pleasure to be with you today.
I am very conscious, from my work as a constituency MP, of the vital role housing associations play in meeting housing need.
Whether it’s large associations like Amicus Horizon, who are based in my constituency; smaller local ones like Croydon Churches; or specialist ones like Evolve, who house some of the most vulnerable people in our borough and are working with others to try to end street homelessness in Croydon.
In my time in this job, I hope to build as close a relationship with all of you as I have with them during the six years when I have had the privilege of serving as an MP.
The Right to Buy
Talking of relationships: a year ago Greg Clark stood here and set out proposals for a different kind of relationship between the government, housing associations and your tenants.
A relationship that puts the aspirations of your tenants first.
Many people were surprised - perhaps disappointed - that the government and National Housing Federation (NHF) members were able to find common cause and do it so quickly.
It wasn’t part of their script.
The one that says the housing market is all about the conflict:
- public versus private
- renting versus buying
- demand versus supply
You’ve shown this doesn’t need to be the case.
I saw the results for myself in Croydon earlier this month.
Until a few weeks ago, Sasha Dudley and her partner Peter Taylor were tenants of L&Q.
Now they are homeowners.
They told me buying their home had given them a sense of security that wasn’t there before.
Even though they have lived in their home for nearly 20 years, things feel different now it is their home.
And they said they would never have been able to realise their dream if it wasn’t for the voluntary Right to Buy.
There are thousands of housing association tenants like Sasha and Peter around the country.
On their behalf, I want take this opportunity to thank David Orr for his leadership, the 5 housing associations who are piloting the scheme and the whole sector for rising to the challenge.
I know you’re waiting for the details of when and how the deal will be rolled out.
You’re not the only ones - I am inundated in emails from your tenants asking the same questions. You’ll have to bear with me just a little longer, but rest assured that we remain 100% committed to working with you to implement the deal.
And when we do, it is not just people like Sasha and Peter who will benefit from this policy.
Because I hope all of you are going to use the receipts from those sales to build new properties for rent.
That way the sale of properties to your tenants won’t just help some people realise their dreams, it will also provide secure, affordable homes for some of the poorest people in our society.
Changing people’s lives for the better, particularly those most in need of help.
That’s what housing associations are for and it’s also why I got into politics.
The case for building more homes
And it’s why I was delighted when the Prime Minister asked me to be her Housing and Planning Minister.
Because housing is one of those rare issues that affects everyone.
Not just in the obvious sense that everyone needs a home, but also because we’re all passionate about the places where we live, the derelict sites we’d like to see brought back into active use, the eyesores we’d like to see redeveloped and the beautiful buildings and precious open spaces we want protected.
I’m very conscious about the scale of the challenge.
We haven’t built enough homes in this country for a very, very long time.
As a London MP, I see the consequences of that failure every week in my surgeries.
Young people forced to live in their parent’s home until well into their 30s - a phenomenon that, as a parent of a teenager, I have a personal interest in ending.
People renting in the private sector, trying to save for a deposit on a home of their own but unable to do so because their rent swallows up such a big proportion of their monthly income.
People living in overcrowded conditions who have been stuck on a waiting list for a transfer for years.
And people who can’t find anywhere to live, are accepted as homeless by their local council and face an extended stay in emergency accommodation.
When the Coalition government came to power in May 2010, we inherited the lowest peacetime rates of house building since the 1920s.
In the last 6 years, we have made significant progress.
The number of new homes being built has doubled.
We’ve helped over 300,000 households onto the housing ladder.
And - with your help - we were the first government since the 1980s to finish their term with a higher stock of affordable homes than when they started.
But there is absolutely no room for complacency.
In this country we expect our children’s lives to be better than ours.
And in most regards they will be. They’ll live longer than us. They’ll see more of the world. They’ll have access to technologies we can’t even dream of.
And in the words of the wonderful Louis Armstrong, they will “know more than we’ll ever know”.
Indeed my 13 year-old seems to think he already does.
But because for many years now we haven’t built enough homes and prices have therefore risen faster than incomes, our children’s generation are less likely than our generation to own their own homes.
50% of today’s 45-year-olds were homeowners by the time they were 30, but for those born 10 years later the figure is just 35%.
And only 26% of those who are 25 today are projected to be homeowners in 5 years’ time.
As the Prime Minister said here in Birmingham on 11th July:
Unless we deal with the housing deficit … young people will find it even harder to afford their own home [and] the divide between those who inherit wealth and those who don’t will become even more pronounced.
That is not the kind of country she or I - or I am sure any of you - want to live in.
This isn’t just a problem for aspirational members of generation Y who want to own their own home.
It has consequences for all of us. If more and more people can’t get on the housing ladder, competition for tenancies in the private and social rented sectors will become more and more intense.
Rents will continue to increase and more and more working people will need help from Housing Benefit to pay their bills.
So if our job in the last Parliament was to rescue the housing market, now we must make it work for everyone.
This is one of the defining challenges of our generation.
Our strategy
So how are we going to meet it?
I don’t pretend to have all the answers two months into the job. But I do know this: we need to reject the false choices that have mired the housing debate for years.
I have spent my first 2 months talking to as many people as possible. I’ve asked everyone one simple question: why don’t we build enough homes in this country?
Some people tell me it’s all the planners fault. Government isn’t releasing enough land and the planning system is too slow and too uncertain.
Others tell me it’s all the developers fault. There’s plenty of land in the system, but they’re banking it and only building homes at a trickle to keep prices high.
The truth is we need to release more land, speed up the planning system and get homes built quicker once planning permission is granted.
Some people tell me I should concentrate on building more homes for people to buy. Most people want to own their own home so that should be my focus.
Others tell me we just have to accept that many young people in certain parts of the country will never be able to afford to own their own home and I should concentrate on building homes for rent.
The truth is we need more homes for sale, more homes for private rent and more sub-market homes for rent.
And while we’re at it, we need a wider range of people building those homes and more innovation in how we build to speed up construction.
If I have learnt two things from all those conversations over the last 2 months, they are that there is no silver bullet and to distrust anyone who walks through my door claiming to have found one.
Housing associations’ role
Ultimately it is the government’s responsibility - and my personal responsibility as Housing Minister - to meet this challenge.
We’re reforming the planning system to make sure it releases enough land, provides greater certainty and takes timely decisions.
We’re releasing surplus public land - enough in this Parliament for 160,000 homes. We’re calling on local government to do the same.
And we have doubled the housing budget. We now have the largest affordable housing programme for 40 years - £8 billion to help build 400,000 affordable homes over the next 5 years.
But we can only do so much. As I said to the private developers at RESI 16 last week, we need everyone involved in the housing market to step up.
Housing associations already deliver around a third of all new homes every year, including the majority of affordable homes. You bring the skills, investment and strong private and public sector partnerships that make things happen.
But I know you can do more.
You know you can too. Your Ambition to Deliver report says you want to build 120,000 homes per year by 2033.
Analysis published by the Regulator this year showed that while some housing associations are making the best use of resources and assets, much of the sector could do more.
And with more than 1,500 housing associations in the sector, that may include more mergers and partnerships.
I want you to explore every avenue for building more homes.
For a start, I want to see a wider range of quality bids for our affordable housing programme.
We’re currently considering bids through to 2021.
Our Shared Ownership programme will help bridge the yawning gap that has opened up between renting and homeownership because of the requirement for large deposits.
And our Rent to Buy programme will give working households a springboard onto the property ladder after 5 years of renting and saving.
Some of you have said to me that you’d welcome the flexibility to bid for a wider mix of affordable housing.
We’re happy to look at that – we remain committed to helping people onto the housing ladder, but not at the expense of reducing the number of homes our programme delivers.
Supported housing
And I will consider any other suggestions that you come forward with that could help you deliver more homes.
We’ve listened to what you had to say about supported housing. You warned that our welfare reforms risked the closure of existing provision and was choking off investment in new provision.
Last week, we announced changes that will protect the vulnerable people who rely on this sector and ensure a smooth transition to the new system.
We’re exempting supported housing from the Local Housing Allowance rates until 2019/20.
At this point, we will bring in a new funding model which continues to fund the sector at current levels, with core housing costs funded through Housing Benefit/Universal Credit at the Local Housing Allowance level topped up by local councils who will receive a ring-fenced grant.
It is vital we get the detail right so we’ll shortly be publishing a consultation paper to get your feedback.
Estate regeneration
As well as our affordable housing programme, I’d also like you to think about estate regeneration.
Since February, a team at my department has been looking at potential schemes and many of the strong proposals we’ve received involve housing associations.
I want to see housing associations at the heart of more of these schemes.
Rebuilding these estates will restore pride to communities, with new homes that are the best-designed and built with the latest construction methods.
You have an opportunity to improve the life chances of people in deprived communities across the country, and be at the cutting edge of housing supply.
Conclusion
I hope I’ve given you a sense of my personal commitment - and the new government’s commitment - to increase to number of homes we build, and a broad outline of how we’re going to do it.
We’ll be filling in the details over the next few months, and both listening to you, and challenging you as we do so.
Listening to any ideas you have about what more the government can do to drive supply.
And challenging you to build more - more homes for outright sale, more homes for shared ownership and more homes for rent.
Challenging you to think not just about quantity but about the quality of the schemes you develop.
And challenging you to drive innovation in the sector.
In the past, housing associations have not always been associated with efforts to increase homeownership - or even to build more homes.
No one can say that anymore.
We have not forgotten the way housing associations maintained supply through the darkest days of the recession when house building in other sectors fell away.
And today you are on the verge of extending the opportunity of homeownership to hundreds of thousands of your tenants.
Many never dreamed they would be facing that prospect.
As I face the challenges of this job, I look to you as key allies.
Allies in the fight to build more homes.
Allies in the fight to spread ownership.
Allies in the fight to provide secure homes for the most vulnerable in our society.
Allies in the fight to ensure the housing market in this country works for everyone.
People are looking to us for help and I look forward to working with you to ensure we don’t let them down.