Ahead of the Budget next week, Chris Timmins, managing director of SH Partnerships, sets out three practical ways the Chancellor could help affordable homes get built sooner.
I’m a builder. For more than 20 years, I’ve developed affordable homes in partnership with registered providers and local authorities. So, I’m not going to wade into fiscal policy or tell those providers what they already know.
But what I do understand is what takes a scheme from planning consent to a start on-site and what can stall it along the way. Mr Healey’s first Budget as Chancellor has a real bearing on both.
Much of the framework for affordable housing needs is already in place. Through the Social and Affordable Homes Programme, registered providers and councils have ten years of grant to plan against, albeit the programme will be delivered in five-year tranches. Then the funding looks to be restricted into further financial years, and the ten-year rent settlement fixes the limit on rent increases until 2036.
Across providers, local authorities and developers, there’s a genuine appetite to build, but we all know the frustrations do and will still exist.
At SH Partnerships, we’re already working with, or looking to work with, registered providers and councils across Shropshire, Cheshire, Staffordshire and the wider east and west Midlands. A long-term horizon means we can now plan multi-phase programmes with our partners and that changes the nature of those conversations.
Which means my message to Mr Healey is straightforward: protect what has been put in place and help it go further. We’re not asking for a new pot of money (that would be nice, but we all know the reality).
Three targeted measures would make a material difference to how quickly homes get built.
The first is to protect the value of the funding. Building costs move. Materials and labour can go up a long way over the life of a long-term programme and funding agreed today might not stretch as far by the time a scheme starts on-site. It exposes the sector to long-term build-cost inflation and there’s no published mechanism to increase it if costs rise before a scheme reaches site.
The first Social and Affordable Homes Programme allocations have only just been made and they’re a welcome start. Index-linking Homes England grants to build-cost inflation would protect those allocations and providers could commit to sites now with more confidence.
The second is certainty on rents. In my experience, uncertainty does more to slow development than almost anything else. I’ve seen good schemes stall for no reason other than uncertainty over funding. Registered Providers borrow and plan over decades and rental income is what services the debt that funds new homes. When rent policy changes part way through, business plans have to be rerun and schemes are paused while they are.
The ten-year rent settlement gave boards and lenders something solid to plan against. The sector has seen rents cut and capped at short notice before, so the Budget could reinforce that confidence by making clear the settlement will hold, with no in-year caps if inflation rises.
The third is a faster route through planning for schemes where every home is affordable. Much of the planning debate centres on market-led sites and how much affordable housing they can carry through Section 106. Schemes where every home is affordable are a different proposition, and they deserve to be treated as one.
When we bring a site forward, we engage with planning officers early to understand what the area needs: the mix and tenure of homes, the number of bungalows and the accessibility standards. When a scheme is designed around those answers and every home is affordable, there’s a strong case for it to move through the system more quickly, but there is currently no dedicated national route for that. A fast track for 100% affordable schemes, with decisions still made locally and following the introduction of the new delegated powers available to the local authority planning teams, would bring homes forward sooner in the places that need them and turn grant into homes people can move into more quickly.
Of course, getting sites moving matters beyond the homes themselves. When an affordable scheme starts on-site, it creates work for groundworkers, bricklayers, joiners and the supply chain.
A live site is also where the next generation of the construction workforce gets its start, through apprenticeships and placements that lead into skilled trades. On our schemes, we’re committed to a 100% local workforce, so the jobs and the training stay in the communities where we build.
That’s why the Budget’s decisions on affordable housing carry weight well beyond housing policy.
Each scheme that starts is an investment in regional employers and in a skilled local workforce that will outlast any single development.
In the Budget, there’s an opportunity for the government to back not only the households waiting for a home, but also the businesses and people who will build them, through further investment in skills and training and support for employers taking on apprentices. Most of what’s needed to build more affordable homes is already there, and Mr Healey has the chance to protect it and help it go further. If he does, housing associations, councils and their partners, like SH Partnerships, will get on with the rest.
