Comment On The Autumn Statement From eMoov CEO Russell Quirk

It would appear that the government have finally woken up to the fact that wishing Britain’s housing crisis away, isn’t going to work.

On the face of it they have made a considerable effort towards addressing the housing crisis, particularly at the affordable end of the market, which in principle is great news. But eMoov founder and CEO, Russell Quirk, believes Mr Osborne has failed to scratch the service of Britain’s housing crisis, having already promised the world and delivered almost none of it.

Founder and CEO of eMoov.co.uk, Russell Quirk, comments: 

400,000 New Affordable Homes 

Osborne’s big news today was the announcement that the government “choose to build” and will double the housing budget to £2bn and reform the housing system, pumping £7bn into building 400,000 more affordable homes, coined as ‘the biggest affordable housebuilding programme since the 1970s’. Great news for those in desperate need of affordable housing, however when this talk amounts to little else than rhetoric, as it so often does, it will come as little comfort to the British public.

Mr Osborne will have to forgive them for taking such a view, but who can blame them when this government is responsible for the lowest level of house building in the last six years. Talk is cheap at the facts don’t lie, yes 400,000 affordable homes is a good start, but over what time period? If they’re eked out over the next decade, what good is that?

The average UK house price has already increased by 15 per cent since 2010 and if the government hadn’t overseen such a hike in house prices in the first place, then the burden of getting on the property ladder would not be quite so heavy for first time buyers today.

£2,3bn Paid To Developers 

Today George Osborne announced £2.3bn will be paid directly to developers to build so-called “starter homes”, aimed at first-time buyers, offering discounts on the asking price.

The news that un-used commercial land will be re-designated for starter homes is obviously a welcome one, but as always the devil will be in the detail.

I’ve been shouting it from the roof tops that in order to get homes built, we must make the proposition more attractive for the developers actually constructing the houses themselves.

Whilst this will certainly get them on the hook, I don’t see it as a long term, sustainable method of getting Britain building again. Yes it’s a start but what happens when the money is spent and we are back to square one?

Instead of throwing money at developers, we need to explore more realistic long term options such as long term tax breaks, to encourage them not to land bank.

Help 2 Buy 

The government announced today that they would continue flogging the dead horse of ‘Help 2 Buy’, promising £4bn to build 135,000 shared ownership homes for households under £80,000 (£90,000 in London).

Again I would be pessimistic as to how much good this will do and in fact, how many of these transactions will actually materialise. So far the scheme has helped just 70,000 homeowners in the last two years, not even 4 per cent of the 2.4 million property transactions by British home-buyers in the same time period.

Mr Osborne has also announced a new ‘London Help 2 Buy’ scheme, offering help for those with a 5 per cent mortgage deposit. Given that this translates to a deposit of £25,000 on the average London house price, I can’t imagine it will help too many who are struggling to get on the ladder in the first place.
Green Belt & Brownfield Re-classification

The use of Greenbelt land is, understandably, a delicate issue and I wouldn’t condone its use to build, as I believe preserving our countryside is as important as providing sufficient housing.

However there are a high number of areas such as former scrap yards and old industrial sites in the green belt, which if re-visited, would be re-classified as brownfield land. The government must be more intelligent in approaching it as a viable source of land for housing and, think realistically when classifying an area as Greenbelt in the first place.

Government Owned Land 

The government and local government seems to be clinging to over 180,000 publicly owned sites like a child that doesn’t want to share their sweets at a playground. Allocating a few derelict prison buildings is like only sharing the odd piece of liquorice, out of a full bag of pick and mix.

It’s as if they’ve been holding onto them for a rainy day, whilst Britain’s housing problems continue to build around them. This latest announcement to allow councils to keep 100 per cent of the sale proceeds for land they own, in order to pump it back into improving better local services, should help to improve local services and potentially housing supply at a council level.

By re-generating these sites and insisting that they are put to developable use, the government could make a real step towards addressing the housing deficit.