Getting the housebuilders back to work

By Michael Burton | 21 April 2020
  • Michael Burton

One less publicised consequence of the coronavirus crisis is its disastrous impact on the Government’s ambitious plans to build 300,000 homes a year.

With most builders in lockdown and the housing market at standstill we have already lost two to three months worth of construction time. Savills reckons the disruption will delay the completion of some 200,000 houses. Even if the builders get back to work the longer-term hit to the wallets of potential buyers from the lockdown means demand will be muted.

Supposedly the Government has been in talks with the Home Builders Federation about extending the Help to Buy equity loan scheme. The current scheme is set to end next April and be replaced for two years by an amended version limited to first-time buyers and based on regional price caps but some industry heads have called for it to be extended at least another year.

This would also help boost construction jobs and tick the Treasury box marked ‘infrastructure’ in classic Keynesian mould. The MJ readers might recall that in 2009 at the depth of the recession the then Labour housing minister John Healey shovelled cash into more housing projects which lifted GDP into the next year.

The irony is that recent figures show that new build was heading in the right direction. Latest figures for new housing completions from the Ministry of Housing, Communities and Local Government show the last quarter of 2019 was the most of any quarter in 30 years at 49,590 completed with 169,020 built for the whole of 2018/19, compared to 108,000 in 2010/11, soon after the end of the recession. The number of council completions also edged up, albeit from a low base, to 2,540 last year compared to under half that figure in 2010/11.

The numbers however are puny compared to the glory days of municipal housing. In 1969/70 a total of 307,000 homes were completed of which 136,000 were local authority. Housing associations of course barely existed then. In 1979/80, the start of the Thatcher Government, the number of completed council homes dropped to 75,000 and by 1990/91 after she had gone, the figure was 13,000 (the lowest years ironically were both under the Labour government in 1999/2000 and 2001/02 when the number of council house completions was just 60). We are unlikely to see these highs again even with the lifting of the HRA cap but as ministers plan how to get the nation’s housing completions back on target they might just consider how much local authorities could contribute.

• My book, The Politics of Austerity: A Recent History, is out in paperback now, published by Palgrave Macmillan

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