‘Scrap First Homes,’ says GLA housing lead as sector bodies set out case for role in recovery

News29 Jun 2020Sarah Williams

The government’s proposed discounted homeownership model, First Homes, “needs to be scrapped”, the deputy mayor of the Greater London Authority (GLA) has said, in a week when sector bodies called on government to place housing at the heart of the country’s recovery.

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Speaking at a Digital Housing Week event chaired by Social Housing last Wednesday (24 June), Tom Copley said that the First Homes policy was “ideologically driven” and that it would be inaccessible to the “vast majority of Londoners” if rolled out in the capital.

He referred to research by the GLA which found that a household income of at least £76,000 would be required to purchase a First Home at a discount of 30 per cent. This would mean that only two per cent of households in London would have the required income and savings to afford one.

The proposed discounted homeownership product was announced in February, and several sector figures warned that the scheme could impact delivery numbers for other affordable tenures.

Addressing the Digital Housing Week event, Mr Copley said that COVID-19 was “the latest in a series of threats” facing the delivery of social housing, following Brexit and the need to fund cladding removal.

While the government’s £1bn Building Safety Fund is welcome, he said, “first of all it’s nowhere near enough, and secondly it excludes social landlords unless they are in financial difficulty”. This will mean that instead of social landlords being able to invest in new housing, they will need to direct money into cladding remediation works, he said.

The deputy mayor established a ‘housing delivery taskforce’ at the end of April in response to the pandemic, which is considering ways to enable the sector to bounce back from the crisis but also to emerge with greater resilience. The taskforce will produce a report in early July setting out its recommendations to local and national government.

Mr Copley said there is a clear case for countercyclical investment in social housing delivery as demand for private housing falls during the recession. This could include being able to “flip entire blocks” over to social housing, he said. Grant would be key to delivering social rented homes, he said, adding that modern methods of construction should also play key role in the recovery.

She pointed to forecasts that construction productivity would take around a 15 to 20 per cent hit and “probably won’t recover until the back end of 2021 or possibly even 2022”. Meanwhile some sub-sectors such as private sector housing were even worse hit, with a fall of around 45 per cent, she said.

“A market failure in the construction sector would have implications way beyond that sector,” Ms Bentley told the event. She noted that every pound spent in construction would generate almost £3 in the wider economy.

The CLC’s roadmap to recovery comprises three core stages: restart, reset and reinvent. Ms Bentley said it is important that the industry steps up with productivity if government provides financial stimulus for the construction sector.

She said that social landlords could benefit from being already “more professional” than many other construction players. “Housing, your time has come,” she added.

Another speaker, Gary Cawley, regional director at Consortium Procurement Construction – a partnership between the Northern Housing Consortium and LHC – said that the construction sector’s “notoriously adversarial culture” is an element that the roadmap to recovery needs to change, with a focus on collaboration and building trust. “We must recognise that if we work together as a supply chain we all are much more likely to survive,” he said.

Mr Cawley added that from a northern perspective, while COVID-19 has stalled the “very positive momentum that developed around levelling up after December 2019”, there have been some positive signals that it remains a priority for government.

“Build a new Britain”

Fellow panellist Chris Wood, assistant director of research, policy and public affairs at Shelter, called on the government to bring forward its £12.2bn Affordable Homes Programme (AHP) – announced in the March Budget and covering the period 2021/22 to 2025/26 – and instead make it available over the next two years, primarily for building social rented homes.

The housing and homelessness charity, which has seen a 60 per cent increase in phone calls during the coronavirus crisis, was one of 60 organisations to join a campaign led by the National Housing Federation, the Chartered Institute of Housing, the Association of Retained Council Housing, the National Federation of ALMOs and Crisis calling on government to put housing at the heart of its recovery plans for the country. The group wrote to chancellor Rishi Sunak about the campaign on Thursday last week.

Delivery of social rented homes through the last AHP was at a record low, with just 3,583 (four per cent) such homes delivered out of the 90,323 affordable homes delivered since 2016.

The Local Government Association has also published a report calling on the government to bring forward and extend the AHP to support a programme of 100,000 social homes a year.

Mr Wood said that government investment in social housing could help to prevent the downturn in the construction sector and assist economic recovery.

Elsewhere, G15 member Network Homes, which owns and manages more than 20,000 homes, has released a report calling for major reforms of the land market, including the replacement of Section 106 contributions with a “flat affordable housing tax” to support the construction of more affordable homes.

It also sets out recommendations to allow Homes England, the GLA and local councils to compulsorily purchase land at existing use value, and to put public land to better use by “considering social value as well as market value” when selling it.

The asks for government came as housing minister Christopher Pincher said in a speech delivered at the close of last week’s conference: “The mission for us all must be to build a new Britain out of this pandemic… we will build, build and build again [to deliver the homes we need].”

Mr Pincher did not set out the detail of government’s plans, but this week the prime minister and chancellor are expected to announce a series of measures to stimulate the economic recovery.