Affordable Housing Programmes Ease Price Pressures - 13th February 2009
The Government has vowed to spend £8b over the next three years on affordable housing. But is anyone buying it? Tailored Home looks at whether the price is right.
Britain's over heated housing market is about to get a dousing – from a multi billion pound price reduction programme.
Affordable housing and shared ownership schemes are being lined up to rescue the UK housing market, while easing the pressure on council housing lists. Latest Government figures show one person in 20 is now waiting for social housing. Many are professional, key sector workers such as school teachers and nurses. Gordon Brown has promised a £2.7bn investment into affordable homes this year, a move he claims will save thousands of construction jobs. More importantly perhaps, it will get young professionals off housing lists and onto the housing ladder.
The newly formed Home and Community Agency has started talks with housing associations and developers to accelerate its National Affordable Housing Programme. Its multi billion pound budget has already been increased, with plans to take over unsold housing developments from builders, so they can be used for affordable and shared ownership schemes.
Part sale
The part sale programme offers new buyers an opportunity to buy a stake in property, while paying rent on the remaining portion. Further shares may be bought at a later stage, although there is generally no requirement to do so.
Housing Minister Margaret Becket revealed in January that the Government had earmarked around £200 million to spend on good quality unsold homes from private developers.
She said about £160 million has already been allocated. The cash is being used to buy up almost 5,000 homes, 1,600 for the affordable and part share offer, to solve what Mrs Becket described as ‘substantial unmet housing need’.
More than 1.8million households, or 4.5million people, are on housing association or council waiting lists – and the numbers are growing.
The scale of the problem was highlighted by Government figures released on Tuesday February 11, which showed the biggest annual jump in empty homes in England in 17 years. The figures rose from 672,000 to 697,000.
The Empty Homes Agency calculated that empty properties across the whole of the UK stood at almost one million (943,000) in 2008.
Stalling regeneration schemes
Agency chief executive, David Ireland, said the rise was due to stalling regeneration schemes and abandoned half-finished housing developments.
He added: "With the housing market seemingly unable to deal with the problem it is more important than ever that councils use their powers to help, housing associations redirect their investment towards purchasing and repairing empty homes, and owners make their property available for short-term use.” The levels of public cash being invested could mean there has never been a better time to buy a new home.
Regenda Homes, a non profit making organisation, has properties available from one and two bedroom apartments in the heart of Liverpool city centre and Sandbach, as well as three and four bedroom houses in Fleetwood, Birkenhead and Oldham.
Homes are available from as little as £25,750 for 25% shared ownership. And even churches are looking to make capital out of the push for cheaper, new homes. A website was launched on February 12, 2009, featuring church land that is available for sale.
Have faith
Faith in Affordable Housing www.fiah.org.uk was unveiled at Church House, in Westminster, as a resource to help churches offer their land or property for affordable housing.
“Converting existing church buildings into affordable housing provides a win-win situation,” said a church spokesman.
“The supply of affordable housing needs to be increased dramatically. Not only does it provide a much needed resource for the local community but also brings in an often urgently needed revenue stream to the church.”
The guide presents nine case studies from different denominations in both urban and rural areas of England.
There is St James's Church Centre in Northumberland (United Reformed) that was in desperate need of renovation. It now hosts nine affordable homes plus a 21st century church, including facilities that meet the needs of diverse groups within the town. The worship area is adaptable and can be used for conferences and concerts.
Cardinal Cormac Murphy-O'Connor, President of Housing Justice, said: "I am delighted to commend this initiative to all faith communities who are seeking to respond to the needs of the homeless or poorly housed. In both urban and rural areas there is evidence of spiralling hardship which can lead to the loss of a basic requisite of human dignity shelter." But for the affordable home programme to succeed, it needs more than divine approval. A housing regulator on the ground, The Tenant Services Authority, was created in December 2008.
Shared ownership sales
Speaking at the British Property Federation conference in January, chief executive, Peter Marsh, described how the UK needed adapt to provide for future housing need.
“The biggest threat to business plans remains the slow down in shared ownership sales,” he warned.
“What we must now build is a new model of development and management which can sustain itself through a vibrant construction and management market. “And that means, I believe, we will see new relationships between investors, builders, local authorities and housing associations where each plays a part in creating mixed income mixed tenure communities underpinned by long term income streams.”
The Tenant Services Authority will develop the new standards framework and intends to ‘switch on’ its new powers for Housing Associations in December 2009 and across the Local Authority sector in April 2010. The Government’s £8bn programme of investment for the next three years, is a 50% increase on the previous period.
No illusions
Ministers are under no illusions. Market conditions until now have made it harder for some housing associations to sell homes for shared ownership. They just weren’t cheap enough. A £550m programme to build 7,500 new social homes has been brought forward 18 months ahead of schedule. The Homes and Communities Agency, created alongside The Tenant Services Authority in December 2009, has been approved ‘flexibility over grants’ to developers to ensure ‘affordable homes’ are exactly that: affordable.
Watch out for better deals coming to a development near you over the coming weeks.
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