Latest Public Sector News

16.11.17

Housing associations classified as private in bid to fix market’s ‘many faults’

The government will reclassify housing associations as private organisations in an attempt to encourage further borrowing and increase housebuilding in the country.

Debt related to these bodies – which could be as high as £70bn – will therefore be removed from the government’s balance sheet.

Announced today by prime minister Theresa May and communities secretary Sajid Javid, the move is a response to multiple calls from the public sector for action to combat the housing crisis.

Critics say the move will not solve the issues at the root of the crisis and will fail to provide the 100,000 new affordable homes needed in the UK.

But Javid argued the move would help to ease pressures on the market and solve the problem of future generations being “rootless” and unable to settle and add value to a community.

The majority of the UK’s housebuilding last year was completed by private companies, so the secretary of state hopes that making housing associations private will free them up to borrow and build the 300,000 new homes needed in the country every year.

In a speech at the Temple Meads Quarter in Bristol, he is expected to say: “The generation crying out for help with housing is not over-entitled. They do not want the world handed to them on a plate. They want simple fairness, moral justice, the opportunity to play by the same rules enjoyed by those who came before them.

Our Housing White Paper in February set out our broad vision. It described the scale of the challenge and the need for action on many fronts. Since then we have been putting it into action, laying the foundations for hundreds of thousands more homes.

“But there are many, many faults in our housing market, dating back many, many years. If you only fix one you will make some progress, but not enough. This is a big problem and we have to think big.”

In response to the announcement, shadow secretary for housing John Healey claimed the government still had no plan to fix the crisis and that things would continue to get worse.

“The number of newly-built homes is still far below what is needed,” he added. “Just as importantly, the number of new genuinely affordable social rented homes is at the lowest level since records began and the number of new low-cost homes to buy has halved since 2010.

“The public must have confidence that new homes being built will be affordable to them and their families. If the prime minister wants to help families on ordinary incomes, she should back Labour’s plan to build 100,000 new genuinely affordable homes a year, help first-time buyers and give renters new consumer rights including control on rents.”

May also addressed the proposals yesterday whilst visiting a housing development in Barnet. She acknowledged that the country was not doing enough to keep up with housing demand for the “people who need it most.”

“Today I am seeing the work now underway to put this right and, in coming weeks and months, my government will be going further to ensure that we build more homes, more quickly,” continued the PM. “This will be a long journey and it will take time for us to fix the broken housing market - but I am determined to build a Britain fit for the future.”

The Conservative Party’s other housing plans have come under scrutiny this year, with critics describing an additional £10bn offered for the Help to Buy as akin to “throwing petrol on a bonfire.”

However, the government claims the scheme has already helped 130,000 people to get on the property ladder this year and will continue to use it to provide support.

Top image: Duncan Andison

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Comments

David Starling   16/11/2017 at 12:06

So will they then not be required to participate in "Right to Buy" or Public Sector Procurement Requirements?

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