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Everything happening in the housing market is highly relevant to local authorities, argues Nick Raynsford. Few if any sections of the economy have been more affected by the recession than housing. It was after all the collapse of the US sub-prime housing market, three years ago, which set in motion the chain of events which led to the credit crunch and global downturn. It would have been surprising if housing in the UK had avoided serious ‘collateral damage', and it hasn't. There have been three main factors all contributing to the housing market collapse over the past two years. First, a loss of consumer confidence, partly reflecting decline in house prices. Few homeowners are putting their homes on the market, with many staying put in the hope that prices will rise again in the reasonably-near future, so there is a shortage of homes available to buy. Second, there has been a mortgage famine as lenders have drastically revised the terms on which mortgages are made available. Generally, homeowners are now being expected to contribute sizeable deposits, and those who can't are effectively excluded from the market. While some correction for the over-generous lending patterns which prevailed before the credit crunch was necessary, the pendulum has now swung too far in the other direction. And third, the house-building market collapsed as builders found themselves with large stocks of unsold and unsellable properties. Across the country, sites were mothballed in the spring and summer of 2008. Only now, and with considerable input from the Homes and Communities Agency through the kick-start scheme, Homebuy Direct and other initiatives, are we beginning to see work resuming on some housing sites. What is all this to do with local authorities? some may ask. The answer is, everything that is happening in the housing market is highly relevant to local authorities. Increased numbers of people having their homes repossessed will impact on obligations to assist the homeless. A reduced supply of new homes available to buy or rent will inevitably increase pressure on housing allocations. Furthermore, a depressed housing market will impact on the local economy and employment opportunities for those working in construction and related fields. All of these and many more consequences of the current housing market difficulties are fundamental to local authorities' strategic housing role. Yet, as the Audit Commission highlighted recently, too many authorities are struggling to meet their strategic housing responsibilities. The commission found that three-quarters of councils inspected to date had been rated only fair or poor at strategic housing functions, and only one qualified as excellent. One-third of councils were found to lack the skills necessary to understand and address housing market issues, and few were engaging with the full range of other bodies involved in housing delivery. Together with its other key finding that councils have tended to focus attention disproportionately on new building rather than the renovation of older housing, these conclusions should act as a wake-up call to authorities which have, as yet, not fully addressed their strategic housing role. The danger, however, is that, faced with tight budgetary pressure, authorities will tend to consolidate on what many see as their ‘core' functions, and will use the absence of resources as a reason or as an excuse for not developing an effective strategic housing role. This would be a shame, not just because authorities without an effective strategic approach will miss the opportunity to influence recovery in the housing market. As the Audit Commission makes clear, the days of silo-based approaches to local service delivery should be over. The inter-relationship between housing and other public services is enormous. Bad or overcrowded housing has a serious impact on health and education, to take but two examples. Good-quality domiciliary care and adaptations in the home can make all the difference to elderly people who might otherwise require residential care. It is now almost 10 years since the case for local authorities developing their strategic housing role was forcibly articulated in the Housing Green Paper Quality and choice (April 2000). I hope that progress is rising to the challenge and will not be as slow over the next decade as it appears to have been in the last. Nick Raynsford is the former local government minister

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Homes role needs a rocket

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