Theresa May Is Right to Target the Housing Crisis

18/07/2016 13:39 | Updated 18 July 2016

There is a new occupant in Number 10 Downing Street. Theresa May is now the Prime Minister, and has inherited a fairly daunting to-do list.

Brexit has inevitably taken many of the headlines, but it is heartening to see that Mrs May has already zeroed in on another issue that will impact our lives for generations to come: the UK housing crisis.

In Mrs May's speech setting out her vision for what her Government's priorities will be, the new Prime Minister argued that "housing matters so much" and pledged to do more to ramp up the production of new housing.

She added: "Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don't will become more pronounced."

The Prime Minister is absolutely right. The UK has stumbled along for decades, allowing the structural undersupply of housing to get worse - as a result, house prices have grown at extraordinary rates, locking many young people out of the housing market.

But home ownership can not be allowed to become a pipedream for millennials. Tackling that undersupply has to be one of most important items on Mrs May's agenda. This isn't an issue that can be kicked into the long grass, to be dealt with another day.

For a long time one of the issues holding back development has been access to land. To its credit, the Government under David Cameron took welcome steps to try to address that, opening up public land for housing development. Last winter the Department for Communities & Local Government (DCLG) pledged to release enough land to build 160,000 homes by 2020.

But a new report from the National Audit Office (NAO) this week says that it has only managed to sell land with the capacity for 8,580 homes so far. Radical improvement is needed here in order to get over this slow start, and the impetus for that must come from the top. We are falling dramatically short of what is required to address the housing crisis.

It is also important that the Prime Minister does not concentrate all of her efforts simply on homes for sale. The property market is changing in the UK, with many actively choosing to rent rather than buy. Producing more homes with the private rented sector specifically in mind, and introducing measures to support the build to rent market, would be an important step.

While Mrs May has been clear about her intentions to ramp up housing production, the nation's largest housebuilders may not be quite so keen to do more. Barratt Developments has said that it will "reassess" its land acquisition strategy following the Brexit vote, and others are said to be taking a similarly cautious approach, which may result in their output actually falling.

This need not be the setback it appears - it presents the Government with a terrific opportunity to rebalance the emphasis we put on the largest housebuilders being the ones to get us out of this crisis. We have long been over-reliant on the biggest housebuilders, but there are thousands of small- and medium-sized developers up and down the county who, with the right backing, are nimble and enthusiastic about getting the homes built that we so desperately need.

That means helping them access the land that normally goes to the big housebuilders and making it easier for them to finance those smaller developments that the high street banks cannot or will not fund.

Thankfully, there is momentum already building on this front. The Government through the DCLG Select Committee last week launched an Inquiry into the capacity of the homebuilding industry to meet the demand for new homes, and will specifically look at the role of small- and medium-sized developers in tackling the housing crisis. It's precisely the sort of forum needed to address the barriers which currently impede us from delivering the homes we need up and down the country.

It is vital that this momentum is sustained. The intricacies of installing a new Government cannot be allowed to overshadow or impede progress.