current & future opportunities and threats for housing support/wm resources/w mids...

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Current & Future opportunities and threats for housing Gavin Smart

Director of Policy & Practice, CIH


The big picture context

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It’s still the economy


Anatomy of the recession

Source:

niesr.ac.uk


Fiscal context: Govt spending cuts


Threats from abroad

• Contagion from the Euro zone

• Dependence on export markets to help kick start our economy

• Rise of the East & decline of the West


Mortgage Rationing

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gross Mortgage Lending 2001-2011

Source: CML


The supply challenge


The housing context


The political and social policy context

• Austerity for the long term – whatever the govt

• Govt closer to wider public views than we think?

• Stigmatisation of the poor/excluded?

• Opportunity or outcomes?

• Smaller state – less money, increased demands

• Markets are in - regeneration challenge

• Targeted, personal, limited & smaller interventions

• Further residualisation of social & affordable housing?

• No let-up in pressure on supported & specialist housing

• Housing & health – sealing the deal

• Labour future would be different, but how different…?


Direct investment

• £1.8bn for 170,000 sub-market rent

• £300m for 15,000 affordable homes & 5,000 empties

• £200m for 5,000 private rented homes

• £570m for 16,000 stalled homes through Get Britain Building

• £30m for self build

• £60m for travellers sites

Supporting investment

• Debt guarantees up to £10bn

• Planning reform

• Public sector land release / Build Now Pay Later

• New Buy

• £730m Growing Places for infrastructure

• Support for REITs and Build to Let

• Experts to help councils

• Community Right to Build

Actions on supply


Progress on supply

• Starts down 30% since May 2010

• 114,160 homes in 2011 (7% up on 2010)

• Affordable supply slowly increasing

– 928 affordable rent (at March)

• Planning applications flat

– But % approvals up


Development stats


Mobility

• Flat, but what’s coming?

Affordability

• Concerns about ≤80% rent

• Private rents

• Ownership – Depends who you are

Progress on access


So what will the future feel like?


Uncertain future prospects


Headwinds restricting growth

• “Demographic dividend” in reverse

• Rising cost of education

• Rising inequality

• Interaction between globalisation and ICT

• Rising energy costs

• Household and government debt


The end of big government?


What will it feel like?

• It’s going to be tough

• Govt spending cuts and cut backs

• Welfare reform –

pressure on landlords and tenants – esp bedroom tax

increased arrears, bad debt? Increased door step lending?

evictions (and not just the ones we are used to)

how will criminal justice system respond?

• Some evidence of economic recovery taking root, but…

People and geographies that we work with suffer most & recover slowest

• Continuing pressures across whole housing market

Insufficient supply – the “sponge” effect & its limits

Poor affordability – even where house prices are dropping

• Essentially housing effectively scarcer and so more expensive

• So who gets what?

• And it will take a long time…


The professional challenge – now & in the future

• More for less

• Key skills shortages

Traditional trades & technical roles

• Skills to develop + new skills to acquire

Contract management

Risk management – more market risk?

Procurement – more than just vfm

Market analysis

Asset management – much more proactive asset and portfolio management

Debt recovery and collection

Alternative housing management? – PRS, following Welfare Reform

Market sale & other commercial activties…

• New relationship with consumers post Welfare Reform & market rent

• Greater sectorial variety & competition

• Private comparators – levelling up vs levelling down


Autumn Statement

• CIH submission – what should be in it

1. Rent (& investment) certainty

2. Planning consent changes and self-build

3. Raise LA borrowing caps

4. Universal Credit certainty & welfare reform

5. Guarantees certainty

• What actually will be in it?

Revised growth and debt figures (not good)?

Public land? – again…

Strategic sites? – following Nick Clegg speech

Further welfare cuts? – but not for U25s?


Future policy developments • Helping “strivers”

• “Nudging” stragglers – and more…

• Far greater focus on consumer choices and tailored service provision?

• Addressing “legitimate” tax payer concerns

• It’s all about growth – what’s our offer?

• How do we politically position in response to this?

• Continued focus on the PRS and desire to see significant increased supply

• Continued efficiency pressures

Possibly in-built in rent settlement

• Personal, targeted, time limited subsidy vs long term capital subsidy

• Ever greater targeting

Allocations, pay to stay, fixed term tenancies/tenancy reviews

• Value for Money for public purse – additional outcomes, no extra resource

• And in all of this continuing to do the basics…


How is CIH helping?

• Policy and influencing work

• Practice advice – the home of professional standards

• Revising and clarifying our membership offer

• Training, development and education

• Conferences & events


Thank you

[email protected]

Follow me on Twitter:

@GavinSmartCIH

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