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Coughing Up £2Billion Shows May Has The Housing Crisis In Her Crosshairs

05/10/2017 11:10
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A couple of weeks ago I wrote a blog for HuffPost which compared housing professionals' discussions with Government to Tom Cruise in Jerry Maguire. Our message to Government was absolutely clear and, in our eyes, totally compelling. "Show us the money and we will build the houses that this country desperately needs".

When Theresa May stood up in Manchester to give her speech to the party faithful (and, let's face it, the party not-so-faithful) she did just that. She showed us the money.

There had been the usual trails beforehand that housing would feature, as we hoped it would. There had also been a few broad hints from the Secretary of State in recent weeks that Government had been persuaded that part of the offer had to be truly affordable homes for people to rent. So across the housing sector there was cautious optimism. As the PM took the stage we still all watched with bated breath to see exactly what government's response to the housing crisis would be.

Someone wittier than I on Twitter pointed out that if Martin Luther King is remembered for 'I had a dream' then the Prime Minister's speech will possibly be remembered as the 'I had a cough' speech. But it will be remembered for something else too. By the end of her speech she had coughed up an extra £2billion for affordable housing.

She had a clear message for the housing sector and the public: not everyone's housing needs can be met by the market and Government is back in the business of providing money to help meet those needs.

It was clear the PM has the housing crisis in her crosshairs as she made a clear statement that she would dedicate her Premiership to fixing our broken housing market.

We have consistently asked for political commitment and political leadership to help solve the housing crisis. A sitting PM making housing the main focus of one of the most critical speeches of her career is unarguably that.

The extra money is important, not just because of the amount, but because of what it is for. Since 2010, there has not been any money to build homes for social rent - the lowest rents for those who are most in need. Construction of these homes ground to a halt - down from 36,000 in 2010/11 to just 3,000 the year after. Prior to today's announcement, we were spending less as a nation on building homes than we did in the nineties.

That is not to say we weren't spending money on housing - we were. It was just sometimes misdirected. Over the last 20 years, we spent more than ever supporting people to live in costly rental properties through housing benefit. This rose from £16.6billion to £25.1billion - with a huge growth in housing benefit being paid to those in work. Building more homes that are genuinely affordable will therefore make work pay and help bring down the housing benefit bill by moving people into homes they can actually afford.

And just as important as the new money was a much less heralded, yet in some ways equally vital announcement, later in the day - when Government provided long term certainty to housing providers about the rent that they can set from 2020. A new rent formula may not have provided the political fireworks of announcing £2billion of new money. But what it does mean is that housing associations are confident about their future income streams and can plan the new homes that we all want to see built.

As always the devil will be in the detail but Wednesday's speech was a welcome recognition that Government sees housing associations as a key partner in delivering a new generation of genuinely affordable, high quality homes for rent.

This statement of intent is important. What we spend our money on says something about us as a nation. The tragic fire at Grenfell Tower triggered a wider debate about how we house people who the market does not provide for. As my boss has said elsewhere on HuffPost UK, the right way to pay tribute to those who lost their lives is to make social housing better, to make social housing a national badge of honour.

The important policy shift is that there are now some resources to provide homes that are genuinely affordable for people on the lowest incomes. Of course, it would be Pollyannaish to pretend that this new money will solve every problem, or provide a home for every family that needs one - but it is a very welcome start and to pretend otherwise is the very definition of seeing the glass half empty.

Rob Warm is the Head of Member Relations at the National Housing Federation

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