Govt has ‘no illusions’ on housing crisis – but details still lacking on solutions

The property industry will have to wait until spring to get answers regarding the deployment of the £5bn promised by government to support housing delivery.

At the inaugural Homes England Investment Symposium on Monday, the Ministry for Housing, Communities, and Local Government pointed to the Spending Review as a date when answers regarding gap funding would be shared.

MHCLG representatives were keen to point out that the department understood the problems regarding building homes and was working on presenting solutions.

“There are no illusions about the scale of the challenge,” Baroness Sharon Taylor of Stevenage, parliamentary under-secretary of state with MHCLG, told the audience of developers, investors, and consultants – including the likes of Capital&Centric, Muse, Glenbrook, Arlington Real Estate, Caddick, Picture This, Onward Homes, Great Places Housing Group, and FEC.

Taylor reiterated promises made during and in the lead-up to the Budget last week: £500m more for the affordable homes programme, £3bn in loan guarantees for SME housebuilders, and £46m to increase capacity in local planning departments.

“We are putting the full weight of government behind these plans,” she assured the crowd.

The event’s chair, Joanna Gosling, asked Office for Investment’s Tim Newns, MHCLG’s Joannna Key, and Homes England’s Peter Denton about their plans to address a lack of homes in the UK. Credit: Place North

Joanna Key, director general for regeneration, housing, and planning at MHCLG, promised more information would come from the spring Spending Review – particularly around the government’s plans for gap funding.

“That will definitely be a focus of the Spending Review in the spring,” she said. “There is a lot of Homes England funding going into precisely that at the moment, but obviously that will at some point run out. We need a proper programme.”

Key acknowledged that some in the room may be frustrated by a perceived lack of delivery on housing and planning reform from the government.

“I take a little bit of issue with ‘nothing sort-of happened since fourth of July’,” she said, responding to a question about the slow deployment of change.

“It has actually been in that time a whole new planning policy has been announced. There’s been new housing targets for every single local authority across Britain,” she pointed out.

“I feel like some progress has definitely been made. It’s probably not anything as much as you would like and it certainly isn’t as much as we had in mind. But you can’t do some of these things overnight. They require a lot of consultation, discussion, and development… that’s why next spring’s Spending Review, which will set the budgets for the next five years, will be super, super important.”

Key described the housing situation as an oil tanker, one that takes time to change its course. That change needs to be done thoughtfully too, with Key saying that “you can’t just chuck some money” at the problem.

“People are looking at the system and making sure every bit of it is delivering,” she said.

Peter Denton, chief executive of Homes England, said that while detail may be limited there was a clear intent.

“You do not need to know the detail of what’s coming next year for me to make the plea: for goodness sake, do not stop,” he said.

“For goodness sake, have the confidence to build your pipeline, to keep going, to empower your teams,” he continued “Do not stop because that’s self-harming when the government has been clear – not on detail, but on the direction of travel and ambition.”

Denton also stated that Homes England will be looking beyond simply handing out grants to help ensure that the 1.5m homes promised by the government are delivered.

“It’s going to be incumbent on us to look at capturing land value, incumbent on us looking at densification – and really being challenging about densification so it’s not just in the urban areas,” he said.

Denton added that chancellor Rachel Reeves’ announcement regarding changing fiscal rules to prioritise regeneration for its long-term investment potential could have big implications.

“I think there is more to be done in that area that stretches the money we do have and stretches the ambition.”