current & future opportunities and threats for housing support/wm resources/w mids...
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Current & Future opportunities and threats for housing Gavin Smart
Director of Policy & Practice, CIH
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The big picture context
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It’s still the economy
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Anatomy of the recession
Source:
niesr.ac.uk
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Fiscal context: Govt spending cuts
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Threats from abroad
• Contagion from the Euro zone
• Dependence on export markets to help kick start our economy
• Rise of the East & decline of the West
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Mortgage Rationing
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Gross Mortgage Lending 2001-2011
Source: CML
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The supply challenge
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The housing context
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The political and social policy context
• Austerity for the long term – whatever the govt
• Govt closer to wider public views than we think?
• Stigmatisation of the poor/excluded?
• Opportunity or outcomes?
• Smaller state – less money, increased demands
• Markets are in - regeneration challenge
• Targeted, personal, limited & smaller interventions
• Further residualisation of social & affordable housing?
• No let-up in pressure on supported & specialist housing
• Housing & health – sealing the deal
• Labour future would be different, but how different…?
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Direct investment
• £1.8bn for 170,000 sub-market rent
• £300m for 15,000 affordable homes & 5,000 empties
• £200m for 5,000 private rented homes
• £570m for 16,000 stalled homes through Get Britain Building
• £30m for self build
• £60m for travellers sites
Supporting investment
• Debt guarantees up to £10bn
• Planning reform
• Public sector land release / Build Now Pay Later
• New Buy
• £730m Growing Places for infrastructure
• Support for REITs and Build to Let
• Experts to help councils
• Community Right to Build
Actions on supply
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Progress on supply
• Starts down 30% since May 2010
• 114,160 homes in 2011 (7% up on 2010)
• Affordable supply slowly increasing
– 928 affordable rent (at March)
• Planning applications flat
– But % approvals up
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Development stats
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Mobility
• Flat, but what’s coming?
Affordability
• Concerns about ≤80% rent
• Private rents
• Ownership – Depends who you are
Progress on access
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So what will the future feel like?
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Uncertain future prospects
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Headwinds restricting growth
• “Demographic dividend” in reverse
• Rising cost of education
• Rising inequality
• Interaction between globalisation and ICT
• Rising energy costs
• Household and government debt
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The end of big government?
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What will it feel like?
• It’s going to be tough
• Govt spending cuts and cut backs
• Welfare reform –
pressure on landlords and tenants – esp bedroom tax
increased arrears, bad debt? Increased door step lending?
evictions (and not just the ones we are used to)
how will criminal justice system respond?
• Some evidence of economic recovery taking root, but…
People and geographies that we work with suffer most & recover slowest
• Continuing pressures across whole housing market
Insufficient supply – the “sponge” effect & its limits
Poor affordability – even where house prices are dropping
• Essentially housing effectively scarcer and so more expensive
• So who gets what?
• And it will take a long time…
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The professional challenge – now & in the future
• More for less
• Key skills shortages
Traditional trades & technical roles
• Skills to develop + new skills to acquire
Contract management
Risk management – more market risk?
Procurement – more than just vfm
Market analysis
Asset management – much more proactive asset and portfolio management
Debt recovery and collection
Alternative housing management? – PRS, following Welfare Reform
Market sale & other commercial activties…
• New relationship with consumers post Welfare Reform & market rent
• Greater sectorial variety & competition
• Private comparators – levelling up vs levelling down
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Autumn Statement
• CIH submission – what should be in it
1. Rent (& investment) certainty
2. Planning consent changes and self-build
3. Raise LA borrowing caps
4. Universal Credit certainty & welfare reform
5. Guarantees certainty
• What actually will be in it?
Revised growth and debt figures (not good)?
Public land? – again…
Strategic sites? – following Nick Clegg speech
Further welfare cuts? – but not for U25s?
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Future policy developments • Helping “strivers”
• “Nudging” stragglers – and more…
• Far greater focus on consumer choices and tailored service provision?
• Addressing “legitimate” tax payer concerns
• It’s all about growth – what’s our offer?
• How do we politically position in response to this?
• Continued focus on the PRS and desire to see significant increased supply
• Continued efficiency pressures
Possibly in-built in rent settlement
• Personal, targeted, time limited subsidy vs long term capital subsidy
• Ever greater targeting
Allocations, pay to stay, fixed term tenancies/tenancy reviews
• Value for Money for public purse – additional outcomes, no extra resource
• And in all of this continuing to do the basics…
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How is CIH helping?
• Policy and influencing work
• Practice advice – the home of professional standards
• Revising and clarifying our membership offer
• Training, development and education
• Conferences & events
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Thank you
Follow me on Twitter:
@GavinSmartCIH