Queen’s speech leaves many questions over affordable housing
Yesterday’s Queen’s speech included an announcement that the new Government will help build more homes, promote housing market fairness and bring forward proposals to ban unfair tenant fees.
All are welcome announcements, especially the idea of affordable housing. However, the tragic fire at Grenfell Tower has highlighted concerns over the quality of construction and the suitability of materials used. Tighter legislation is needed to avoid another disaster, and developers and builder will have to rethink how they can deliver affordable housing without compromising build quality and safety.
The other issue is that new homes need to be made available in places where people want to live and work, which is usually within the cities. This is highlighted by the large increase in the conversion of offices to flats, especially compared to the number of traditional new-build properties.
An independent report commissioned by the shadow secretary of state for housing indicated that if housebuilding hit 300,000 new homes a year, it would only reduce prices by 0.6%. The total number of new builds currently remains far short of the 200,000 units a year the government has pledged to meet its “million homes by 2020”, in fact, we haven’t built more than 200,000 a year for over 30 years.
Those who struggle to buy a property will look to the rental market and a ban on unfair tenant fees will go a long way to make this more affordable. However, if landlords are not generating the income they need through additional fees, the most likely impact will be an increase in base rent. In a market where affordable housing may not be viable, an increase in demand for rented accommodation may well justify the hike in rental prices.
While the measures being introduced are welcome, the government has a long way to go to achieving its end goal – getting more people onto the property ladder.
For more information please contact Alex Chrysaphiades, Senior Manager at MHA MacIntyre Hudson.