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Last edited 05 Apr 2017
Diversity and the housing crisis
Everyone is talking about a housing crisis, but is that really true? For some, the housing market is delivering well and others really badly, the agenda that needs to be addressed is really a problem of equality. Responding to the need of all, with the right quality and affordable solution. Here are some thoughts on February 2017’s Housing white paper.
Over the last 30 years, the Conservative party’s main pillar of housing policy has been to increase the amount of home ownership. In this time, home ownership has gone up significantly but we are still in the midst of a housing crisis. Too many people live in substandard accommodation and have little hope to move somewhere else, let alone be able to buy a home themselves. While net new additions to the housing sector continue to rise, achieving the 2020 challenge of 1 million new homes is not a certainty.
The government is trying to encourage more institutional investment, to create more private rented developments. Institutional investors take a long term view, much less interested in the short term rise and fall of sale prices than dependable rental income. This should give families more long term security about their rented home, not having to face annual rent hikes as short term landlords try to cash in while they can.
With a longer-term view, institutional investors are keen to ensure that the homes they build remain a good investment throughout the home's life. This means homes are built to a higher quality and that are resilient to future climatic conditions.
Many large institutional investors are already investing in high-quality sustainable homes; Aviva investors are part of a joint venture with Blueprint at Nottingham Trent basin using Home Quality Mark as the tool to ensure a higher level of quality. In Manchester, Legal and General have recently bought into the BREEAM Communities development by PEEL at Media City, Salford, Greater Manchester.
The diversity in housing policy is not just about tenure, but also who is building the new homes. Gavin Barwell MP, the housing minister said we are “too dependent on a small number of large developers”. Encouraging smaller developers is a key part delivering the million homes by 2020.
46% of people surveyed by the Home Builders Federation said they were unlikely to consider buying a new home. The perception around new homes is still one of poor quality design and workmanship. While this is still the case too often, there are an increasing number of smaller builders who are trying to attract the '46%' into new homes with features and performance that is beyond their expectation.
Egg Homes and Lumiere are both using Home Quality Mark to help them communicate the benefits of their new homes to what is essentially a new audience. Homes that are more sustainable, better for our health and wellbeing and have low running costs become key factors to 2nd, 3rd and 4th time house buyers.
The government also believes that more diverse homes will encourage people whose children have left home and no longer need large family homes to downsize to a home that works better for the later years of life. Places for People are using Home Quality Mark to ensure homes built for people later in life are really being built for their needs.
How homes are being built is also likely to diversify with talk of developments reserved for homes built offsite. Offsite or factory built homes, should have the same or better performance than traditionally built homes. In a factory, quality control is usually more easily scrutinised, costs and waste can also be controlled ensuring a product that could well be better value for money.
Offsite construction could also tackle other issues such as construction dust, noise and traffic (particularly positive to the local communities of urban sites) but also help with labour shortages. However, as Stephen Stone (CEO, Crest Nicholson) recently pointed out, some factories currently are 90% EU labour, which is higher than most traditionally built London sites. It may well be the case that many of these jobs are done by machines, leaving a need for different skills in the sector. Skills to improve design, efficiency and overall quality.
In order to get acceptance from local communities, a more diverse housing policy must ensure that homes that are delivered to householders (and their existing communities) are of high quality and low environmental impact to ensure everyone’s health and wellbeing is improved. The White Paper suggests that homes built near railway stations is to be encouraged, something that not only means that the new homes are automatically well connected, but could limit the impact upon existing roads (as people may not need a car).
It is a balance though, without additional sound insulation from external noises (currently there is limited regulations in this sector), and the correct ventilation strategies (both of which the Home Quality Mark outlines) homes near railway lines could well become a nightmare to live in.
The government wants consumers and communities to help drive up quality and improve the character of design. Without ensuring consumers and consumers are on board, public opinion regarding the quality of new homes could undermine all of government’s good intentions. One top 10 house builder has a 'Victim’s Group' on Facebook with over 1,200 members, current customers share stories of things gone wrong with their home, and potential customers may well be put off from buying a home from this particular house builder.
10 years ago customers were not as powerful as social media has helped them become today. It isn’t only the housebuilders as now the traditional organisations that provide warranties are becoming drawn into the debate leaving a 'trust shortfall' amongst consumers. As the Home Quality Mark evolves, trust from consumers is something that we will increase and build upon.
As Javid says, there is no silver bullet but a combination of diverse homes, with different tenures, built in efficient ways that are in locations that people want, to high standards of quality and sustainability is the only way to achieve the housing targets that have been set.
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