After some considerable delay communities secretary Sajid Javid unveiled the Housing White Paper last month. And it is fair to say that the initial reaction to the document could best be described as lukewarm. Some, in fact, were scathing, describing it as a “surrender to the nimbys”, “a missed opportunity”, “feeble beyond belief” and “a damp squib”. Others were more supportive. But few seemed genuinely excited. On the day after the launch the industry’s view was perhaps summed up by Redrow chief executive John Tutte when he said: “What did people expect? Massive changes?” He welcomed the wide ranging nature of the proposals which seek to improve the situation in all areas and among all parties.Fair point
And this is a fair point. The delay in the release of the White Paper meant that there was a void to fill which generated too much hype so expectations were too high. The truth is we know that there is no quick fix, no silver bullet. So initiatives applied across the board making incremental improvements in all areas are probably the best way forward – and this is what the White Paper seeks to do. David Cowans, ceo at Places for People which builds all tenures everywhere, was one of the earliest supporters of the document calling it “the most balanced policy paper” he has ever seen which “for the first time covered every tenure”.
And on page 17 of this edition of Housebuilder HBF executive chairman Stewart Baseley takes a similar line. “Whilst maybe not the spectacular that some had built it up to be, the White Paper is a massive package of change, “ he says. “Each element of it could make a small difference and, building on the reforms of recent years, go on to make a fundamental difference.”
At a conference in London earlier this year, ahead of the release of the White Paper, housing minister Gavin Barwell said that he is constantly lobbied from all sides with people saying: “The answer is in the rented sector, the answer is to build high, the answer is in Garden Cities, the answer is local authority building, the answer is the private sector.” “The truth is,” said Barwell, “that they are all right. We need all these things to work to solve the housing crisis.” And I guess that is what the Housing White Paper is looking to do – it probably just did not need the hype.
So what of the private sector? By and large the reports coming from the bigger players are pretty positive and as the market continues to be steady then completions are increasing. On the day the Housing White Paper was launched, Redrow revealed its results for the half year to December 31 2016 and among some nice figures on turnover, profit and margin was the revelation that completions in the period were up 13% on last year. And that by 2019 the firm is expecting to be building more than 6,000 homes a year compared with just over 2,000 in 2009.
The medium term looks sound for the big players. But what about the SMEs that we promised to keep our eye on this year? They are one of the key cohorts that needs to grow and thrive to increase output and this is recognised in the White Paper which includes plans to simplify the planning and regulatory system and assist with financing while helping to allocate more smaller sites. The Home Building Fund was launched last year to help SMEs, and it will be interesting to see how successful that is in helping the smaller firms.
I mentioned last month that a number of smaller builders have been telling us that it is hard in reality to secure government funding despite the announcements. This prompted us to do a Freedom of Information search to see how the most recent fund – the Builders Finance Fund – had fared. The results can be found on Page 13, but by and large they show it takes a long time to get any money and, in a fund running for more than two years, less than half of the money allocated was released.
The HCA says it has streamlined its systems to improve its performance with the new Home Building Fund which has absorbed the BFF – we will continue to monitor performance to see if that happens so that SMEs can get the stimulus promised to help increase the housing supply we need.