The HFI | News and Events

30 OCT 2024

More Action Needed: Budget Response from the HFI

"More action needed on housing to fix the foundations and boost growth"

Sir Steve Bullock, Chair of the Housing & Finance Institute said:

"This Autumn Budget takes place against the backdrop of huge challenges to the public finances. The scale of the challenges to the public finances cannot be underestimated but the immediacy of the challenges for housing cannot be overstated either.

"Good housing is a fundamental part of strong foundations for the country. The impact of poor housing is not only personal but also macro-economic. Bad housing can destroy children's educational outcomes and have a long term detriment to economic wellbeing in adulthood. The impact of poor housing directly results in poor health outcomes and adds to the pressure on the NHS.

"While the Budget measures for social housing are welcome, more needs to be done to invest in housing right across the board. That investment is not just good for individuals, over time it will save money for the public purse and boost the economy too."

Natalie Elphicke Ross OBE, Director of the HFI said:

"There were high hopes for housing as an engine for growth. But there was too little focus on the importance of housing to driving economic growth in the Autumn Budget.

"Housebuilding numbers have been falling and these budget measures are not enough for the government to meet its targets. More action is needed to build the homes our country needs.

"It was good news to see right to buy reform and more money for social housing, which the HFI has been calling for. But the crisis in homelessness and temporary accommodation is costing councils over £2billion a year. More radical action is needed to tackle temporary accommodation and homelessness, like the HFI's Operation Homemaker plan."

NOTES

For more information about the economic and wellbeing importance of housing: see HFI's Time for Good Homes here

For more information about the HFI's plan to tackle homelessness and temporary accommodation: see HFI's Operation Homemaker:here

For more analysis about the Budget and HFI's recommendations on Right to Buy and social housing investment: see HFI's website: www.thehfi.uk

ABOUT THE HFI - Who, What, How

Who we are

The Housing & Finance Institute was established in 2015 with the support of UK Government, businesses and councils. Its creation was a recommendation of the Elphicke-House Report 2015. The HFI is a not-for-profit organisation.

What we do

The Housing & Finance Institute acts as an accelerator hub, to increase knowledge and capacity in order to speed up and increase the number of new homes financed, built and managed across all tenures.

How we work

At the HFI, we do the following:

share best practice through workshops, networking and our landmark 'Housing Business Ready' programmes, that support capacity building in councils to explore the housing their communities want and need publish policy papers engage across a range of stakeholders.

We are not politically affiliated with a particular party or business/industry.

Contact: natalie@hfi.org.uk connect@hfi.org.uk www.thehfi.uk

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Housing Delivery Snapshot August 2024

Housing Delivery Snapshot - August 2024

• The Bank of England cut interest rates to 5% in a move expected to begin to boost confidence. The close 5-4 vote of the MPC came with a cautionary message that the Bank was not going to cut “too quickly or by too much”.

• Mortgage lender Nationwide released its latest UK house price index report, with an annual growth in house prices of 2.1% in July, its fastest pace since December 2022.

• The latest NHBC housing pipeline figures for Quarter 2 2024 show the scale of the current housebuilding slump with a 23% fall in new registrations compared to the same quarter in the previous year.

• Latest MHCLG data reported a significant fall in residential Planning Permissions over 30%, another key housing pipeline indicator.

• Following the General Election, the new Government confirmed its 1.5 million new homes target for this Parliament.

• The Housing Secretary took immediate action to impose compulsory housebuilding targets on councils, with a warning of direct intervention if housing targets are not met.

• The Housing Minister confirmed on BBC Radio 4’s Today programme on 31 July that the Government’s New Towns programme is not expected to deliver any completed homes this Parliament.

Housing Pipeline cause for concern

HFI Housing Delivery Newsletter - August 2024

The Bank of England’s rate cut was a ray of light, but the housing pipeline remains a cause for concern. At the Housing & Finance Institute, we look at the latest news and developments in housing since the election, including in the Housing Spotlight and Delivery Snapshot.

Rate Cut Boost

Amid a challenging year for housebuilding and mortgages, there was a ray of light on 1 August, with the Bank of England announcing a long-awaited interest rate cut to 5%. The close 5-4 vote of the Monetary Policy Committee came with a cautionary message that the Bank was not going to cut “too quickly or by too much”.

Ahead of the rate rise, the mortgage lender Nationwide released its latest UK house price index report, with an annual growth in house prices of 2.1% in July, its fastest pace since December 2022.

The latest Bank of England announcements will provide a little relief for some current mortgage holders and those needing to refinance. However, many first-time buyers are facing a continuing double challenge of finding money for a deposit while meeting stringent affordability criteria. So while generally mortgage market confidence may begin to rise off the back of the Bank of England interest rate cut, access to home ownership remains difficult for many, given the affordability and home deposit challenges.

Housing Pipeline Concern

However, housing pipeline figures remain a cause for concern with the latest NHBC housing pipeline figures showing the scale of the current housebuilding slump. Latest MHCLG data reported a significant fall in residential Planning Permissions, another key housing pipeline indicator.

Housing Policy Interventions

Following the General Election, the new Government has confirmed its 1.5 million new homes target for this Parliament. Immediate action has been taken by the Housing Secretary to impose compulsory housebuilding targets on councils, with a warning of direct intervention if housing targets are not met. However, the Government’s New Towns programmes is now not expected to deliver any completed homes this Parliament, the Housing Minister told Radio 4’s Today programme. This raises questions as to how the 1.5 million new homes target will be delivered, without these major new developments coming forward at pace.

Further Government intervention on the demand side to support new buyers and home deposit savers is likely to be necessary over the next period to reverse the current housebuilding slump, together with far-reaching interventions for skills and building materials to meet a housing target that hasn’t been met since mankind first landed on the moon over 50 years ago. The HFI’s purpose is to support increased housing supply, back councils and businesses working together to build more homes and promote new ways to finance housebuilding.

Do get in touch if you would like to share ideas and suggestions on building the homes our country needs.

Best regards

Natalie Elphicke Ross
Head of Housing Delivery

natalie@hfi.org.uk

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