We must all by now have become accustomed to grand announcements from the government about the importance of house building and the economic benefits that flow from this activity. Indeed, new loan assurances have now been issued to improve access to the housing market in a bid to ensure access to 95% mortgages by guaranteeing 20% of the debt. So that it doesn't have to spend money on housing supply, the government is shifting the lending to us, the citizens.
Unfortunately, this government inspired (and underwritten) subprime mortgage is threatening the economic benefits of house building by injecting an additional dose of risk into the transaction. When did we decide that high loan to value mortgages had become less risky? Was it not the arrival of this type of loan product that created an unsustainable housing bubble in the first place?
It also misses the point.
Economic benefits do not arise from the building of houses but from the building of homes.
Instead of managing a market to entice people to take on ill-advised borrowing simply to fuel the construction industry, the government should be seeking to meet existing needs via a stable financial structure. Yes, I am referring to my old favourite: social housing for rent.
Try if you can to forget about broken washing machines in overgrown gardens. Today's social housing is on mixed tenure sites; desirable housing with far higher standards that people want to live in. More importantly, they can afford to do so.
It is the building of homes that people want to live in and, more importantly, can afford to stay in that brings greater prosperity to an area. Of course there are short term benefits in terms of job creation for builders, but the creation of a home roots people in an area and increases demands for local shops, other amenities and service industries in the longer term.
Local shops will get more customers, the window cleaner's weekly round will increase, the local chip shop will sell more pies, the local child minders will be able to hire more staff to care for more children, local garages will get more cars to repair and so the story goes. The list is long and the impact is significant. Not in the shape of an economic tsunami but by representing sustainable gains for an area.
The key is the supply of new affordable social housing; an issue which I have been campaigning to achieve for some time now, and which myself and my team are investing both time and money to achieve.
I recently made an offer to the Prime Minister to increase the supply of affordable social housing through my company, Houses4Homes. I offered to fund and develop social housing in the most challenging areas of housing provision. My offer would even help the implementation of the principles behind the bedroom tax: building more 2-bedroom houses.
The response was that 'all is well' and that the government doesn't need help from anyone to meet its staggering social housing demand. Of course, this is as far from the truth as the north pole is from the south pole. I know this because our order book has reached £200 million of urgent demand, with as much again for more general demand. In fact, we have been inundated with calls from people waiting for funding before much-needed building schemes can go ahead.
I was reassured to know that, in this regard, Nick Clegg and I see eye to eye.
The Deputy Prime Minister and I met the other week in connection with our housing strategy and, although I won't divulge the details of our conversation, suffice to say that he agreed with me in that more had to be done to meet social housing demand. With just two years left in government, time to make a real impact on Britain's social housing need is now at a premium.
Tick Tock Nick... the clock is ticking and time is running out.Suggest a correction