Housing figures urge new PM Sunak to make ‘quick decisions’ to bring clarity
Sector figures have urged new prime minister Rishi Sunak to make “quick decisions” to give clarity to social landlords in working out their business plans.
Rishi Sunak is the UK’s new prime minister (picture: Alamy)
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Mr Sunak has today formally taken over as prime minster after winning the Conservative leadership race. He takes over from Liz Truss, who spent 45 days in office before resigning after her economic plans caused market chaos.
In his first speech today, Mr Sunak vowed to fix the mistakes made by Ms Truss as he warned of a “profound economic crisis” facing the UK.
“Quick clarity”
Elizabeth Froude, chief executive of 47,000-home Platform Housing Group, said that “quick clarity” is needed to ensure stability for the housing sector, including a decision on rent policy.
The sector is still awaiting a decision on a new temporary rent ceiling for the 2023-24 financial year, after the government completed a six-week consultation.
Ms Froude said: “We’ve lost so much time with all this political debate and all the changes. We need some quick decisions. We only have a very short window of time before we have to give clarity to our residents about what’s happening next year.
“It’s a really big-time pressure for us because we’re now at the end of October with no more certainty about which version of next year’s business plan we should be delivering.
“Our finance departments are all constantly re-planning and we have about five versions of our business plan at the moment. We don’t know which one will be the real one.
“Certainty on the government’s view and approach to ensuring the stability of the housing sector is critical and quick clarity is needed, not least of all the stability of our income through rents and grants to ensure delivery of homes is feasible.”
Phil Elvy, executive director of finance at Great Places Housing Group, echoed this, saying that swift decisions are needed, but only after proper consideration of the implications.
He said: “We would normally start our preparation work for the April rent increase immediately after the CPI figure is announced, giving our board context and detailed analysis, and providing options for what we decide to do.
“We can’t start doing any of that until we know the rent settlement outcome.”
Nicholas Harris, chief executive at Stonewater, also called for stability and clarity on next year’s rent settlement.
“In order to ensure the stability of the housing sector, the government should be clear on its approach and view on the subject as soon as possible," he said. "This includes providing clarity on the stability of our income through rents and grants to ensure the delivery of the affordable homes needed is possible.”
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Kate Henderson, chief executive of the National Housing Federation, said that housing associations are “ready to work with” Mr Sunak’s government.
In a tweet, she said: “Housing associations are ready to work with your government to support the country through the cost of living crisis providing vital new affordable homes and supporting local communities.”
“Significant” relief in the markets
Former chancellor Kwasi Kwarteng’s Mini Budget contained £45bn of unfunded tax cuts that spurred a fall in the pound and saw a surge in the cost of borrowing on the bond markets.
As a result, it has become more expensive for housing associations to raise finance via this method and they have been tipped to turn to private placements and shorter-term bank facilities in the meantime.
Last week, new chancellor Jeremy Hunt announced several U-turns of the tax cuts in an attempt to calm the markets.
Among the changes was scaling back the energy price guarantee from two years to six months, which housing trade bodies voiced their concerns about.
Piers Williamson, chief executive of bond aggregator The Housing Finance Corporation, said that after Mr Sunak was announced as PM, there had been “significant” relief as the markets rallied.
He suggested that Mr Sunak and Mr Hunt together would be good for the country.
“The rally in the markets has been significant so if we get a combination of Mr Sunak and Mr Hunt, I think that they are going to be fiscally robust – and the consequences of that might be tougher in the short term, but they’re probably good for the standing of UK plc,” he said.
“I think it’s quite important we do have a fiscally prudent regime the market believes in and that may help to mitigate some of the bad news such as the cost of the government’s debt.
“I think [Mr Sunak] has got very strong economic credentials and a combination of him and Mr Hunt is going to be pretty robust.”
Mr Elvy added that he believes Mr Sunak will see “restoring the confidence” of the markets as one of his “highest priorities”.
He said: “I’d hope that he will see that balancing the books cannot be driven simply by another damaging dose of austerity and will find a way to push up tax revenues in a way that is more fairly distributed than we typically see from a Conservative government.”
Levelling up
Bjorn Howard, group chief executive at Aster, said that Mr Sunak must ensure that housing remains at the top of the policy agenda. He said that more investment in community-led development is “essential” to levelling up housing in the UK.
Mr Howard said: “Mr Sunak has some very pressing and immediate economic challenges to focus on, but he must ensure that housing remains at the top of the policy agenda.
“The ambitions set out through the Conservatives’ levelling-up agenda were moving us in the right direction by recognising the need for focused adjustments, rather than wholesale changes. Community land trusts, where development projects are borne out of the demands of local residents, seem to align perfectly with this aim but are currently an underused method of housing delivery.
“I believe more investment in community-led development, by expanding the Community Housing Fund, is essential to levelling up housing in the UK.”
Cost of living crisis
Speaking before Mr Sunak was announced as the new PM, Fiona Fletcher-Smith, chief executive of L&Q, said that the new government should help residents with the cost of living crisis and put in place the policies and funding needed to reach net zero by 2050.
She said: “As the scale of the economic shock becomes clearer, we know our support can only go so far. Since the start of April, the rate at which we issue food bank vouchers has nearly doubled, and we are facing the prospect of a difficult and expensive winter. There is no easy answer, but it is clear more assistance is needed.”
Councils
James Jamieson, chair of the Local Government Association, said: “In these difficult times, we all need to come together and work in the best interests of our residents.
“The government needs to ensure councils have the funding to meet ongoing pressures and protect the services that will be vital to achieve its ambitions for growth and to produce a more balanced economy, level up communities and help residents through this cost of living crisis.”
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