Budget Comment: What does the 2009 UK Budget foretell for recovery in the housing sector?
Media
28/04/2009
Mace Group's Steve Dawson comments on what the 2009 UK Budget might indicate in terms of recovery in the housing sector.
Presenting a difficult combination of high borrowing and promises of future spending cuts, Alistair Darling's 2009 budget drew fire from many quarters, with a general feeling among those in the housing industry that it didn't go far enough. The big question is, what does the budget tell us about potential recovery in the housing sector?
To look at the specifics in Wednesday's announcement, a further £1bn has been allocated for the housing market, including:
- £400m to help kick start stalled housing schemes
- £100m to support council house building
- £100m to make homes more energy efficient
- £80m for Homebuy Direct (the Homes and Communities Agency's shared equity scheme)
In addition, extra cash was earmarked for the mortgage rescue scheme and the stamp duty holiday on properties worth up to £175k was extended until the end of the calendar year. This is on top of significant additional funding allocations made as part of Hazel Blears' £1bn package announcement on 2nd September 2008. Taken together these measures should help shore up what remains of the property market after many months of price decline and slowed sales.
But it is unrealistic to expect government action to solve all of the country's housing market issues. In essence, if government has propped the door open it's up to private sector housing professionals to help its public sector clients walk through. We need to develop creative new models for getting developments underway, not rely on or wait for the public purse. The old delivery models based on increased property values and massive land receipts now have to be replaced with sustainable alternatives that do not forsake affordability, design and quality.
We have to help public sector bodies to prioritise projects that represent the best use of resources, and most successfully meet social needs. We need to work with developers, financial institutions, public agencies and communities to share the project risk if it means helping to get a project off the ground. New delivery vehicles for housing and other public services are needed, and are already being developed, so that the private and public sector can continue to deliver projects in an era of decreased certainty. Mace has a great track record of such innovative approaches, working as part of joint ventures, with urban regeneration vehicles, as part of PFI schemes, with local asset backed vehicles, in public-private partnerships, and with local housing companies.
Recovery will come eventually but no one can accurately predict on what model the housing market will be based on in future. In the meantime, it's up to experienced private sector firms to help the public sector housing community to solve these problems in partnership.
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