Housebuilding should be a key role in government’s plans

Carol Matthews, Riverside’s Chief Executive, looks at how building more affordable homes in the North will help retain talent and rebalance the economy.

The government has rightly identified the lack of available and affordable good quality homes as potentially the biggest social policy challenge facing this country.

I understand that the much-anticipated Housing White Paper will shortly be published. The proposals have been closely guarded but one thing is certain — we will need to see major reforms to get Britain building.

Currently we need between 250,000 and 300,000 new homes every year to keep up with demand. If the government is to meet its manifesto commitment of a million new homes by 2020, Sajid Javid will need to put in place some significant changes to drive up supply. He also needs to ensure that housebuilding is not simply seen as a London issue. Demand for new homes may be greatest in the capital but new homes of different tenure could revitalise large parts of the north of England.

Research produced by Homes for the North last year highlighted how, over the past decade, over 300,000 highly qualified workers had left northern towns and cities to further their careers. While many return in their mid-thirties and forties for a better standard of living, it is clear that the government must do more to incentivise people of all ages — but especially younger and more productive workers — to move to places such as Liverpool, Leeds, Manchester and Newcastle.

If the loss of highly qualified workers had not occurred, this part of the workforce in the north would be 3.5 per cent larger today than it currently is. This loss of talented workers puts business investment at risk, with companies citing the availability of highly skilled workers as one of the main reasons when deciding on a location.

Housing could be one way to stem the flow of talent from the north. As part of our research we polled graduates on what changes could attract them: the overwhelming answer was the availability of affordable housing. Given that the average price of homes for first-time buyers in London is well over £450,000, the option of cheaper accommodation could enable northern regions to steal a march on the capital.

The government should use housing schemes to give a shot in the arm to the regions. First, there should be a specific body in the north of England to co-ordinate efforts to tackle the housing crisis outside London. A new regional housebuilding target to complement the national one would go a long way to focus minds on the challenges facing the north.

Secondly, the government – working with local and regional bodies – could establish a rapid expansion of affordable homes and regeneration schemes in specific zones of acute demand across the north, using self-financing incentives, including a stamp duty cut for homes below £350,000 and VAT reductions for the refurbishment of empty homes.

Finally, a Graduate Homes Scheme for the North should be introduced, offering flexible tenancies and shared ownership products that are portable within the region, and using unallocated funds from the Shared Ownership Affordable Homes Programme.

Housebuilding could and should play a key role in the government’s plans to rebalance the economy. With ownership increasingly becoming a pipe dream for people living in the capital, the upcoming White Paper could offer a beacon of hope to a generation of people looking to further their careers and start a family.

Carol Matthews is the co-chairwoman of Homes for the North, an alliance of the 19 biggest housing associations in the north.

This article was first published by The Times on 2 February 2017.

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