Theresa May has revealed an extra £2bn of government cash for local authorities across the UK to build more affordable housing.
However, despite widely held expectations of a huge new council house building programme, the prime minister failed to put any figures on how many new social homes the Conservative Party would commit to.
Revealing the government’s house building plan standing in front of the slogan “building a better future that works for everyone”, May told Conservative supporters “this Conservative Party must pledge to renew the British dream once again”.
She added a major part of the British dream was home ownership, and said the government would take steps to solve the housing crisis.
“I will dedicate my premiership to fixing this problem,” said the prime minister, who faced a protest from comedian Simon Brodkin, who handed her a mock P45 during her speech. After brushing the protest aside, the prime minister struggled to keep her voice and she faltered and coughed throughout the rest of the speech.
May also apologised for her presidential-style election campaign adding: “For 30 or 40 years we simply haven’t built enough homes. And that’s been a disaster for young people in particular.
“Today I can announce an extra £2bn funding for affordable housing, taking this government total affordable housing budget to almost £9bn. We will encourage councils, as well as housing associations, to bid for this money.
“And for those areas where the housing need is most acute, we are getting government involved in housebuilding again. We will build a new generation of council houses to fix the broken housing market.”
However, the prime minister said the transformation of the housing market would not be quick, and called on commercial housebuilders to play their part in solving the housing crisis.
“It won’t be quick or easy, but as prime minister I’m going to make it my mission to solve this problem.
“To housebuilders, we the government will make sure the land is available … in return you must do your duty to Britain and build the houses we need.”
May also assured the victims of the Grenfell Tower tragedy that if any organisations were found to have been to blame for the fire they would be punished.
She said: “Grenfell should never have happened and should never be allowed to happen again. Justice must be done.”
Reacting to May’s speech, Lewis Johnston, RICS parliamentary affairs manager, said: “It is over 65 years since a Conservative conference committed the party to delivering 300,000 homes a year. With today’s housing challenge no less urgent, the prime minister’s plan to unleash the first major government housebuilding programme in decades indicates the kind of ambition we need to tackle the housing crisis.
“In 1968, councils accounted for 40% of all housebuilding and today’s plan is an acknowledgement that councils are an important part of the solution to the supply crisis, although it will be interesting to see how this announcement works with the recent expansion of Right to Buy.”
The new housing drive is considered by May as essential to meet government targets to build a million homes within five years, and is one of the prime minister’s key attempts to wrestle young voters away from Labour Party leader Jeremy Corbyn.
Under one plan, promoted by May’s chief of staff and former housing minister Gavin Barwell, the government could use publicly-owned land and order developers to hit tough new targets to build affordable homes at a faster rate. Another option includes compulsory purchase of privately-owned land for new council house sites.
During the 1970s local authorities built more than a million homes, but the figures plummeted in the 1980s after then prime minister Margaret Thatcher introduced the Right to Buy scheme, which allowed council tenants to buy their rented homes at huge discounts.
Since the government’s relaunch of Right to Buy in 2012, only one new council home has been built for every eight sold. In the past five years 38,479 homes have been sold under the scheme, but just 4,594 built or acquired by local authorities. There are around 1.2m families on local authority waiting lists for a social tenancy.
Last weekend, May announced the government will provide an extra £10bn for its Help to Buy scheme. The government claims the cash will allow another 135,000 people get on the property ladder, allowing first-time buyers to gain a mortgage with a 5% deposit on newly built homes. Details of the funding will be fleshed out in the autumn Budget.
Housebuilding collapsed after the financial crash of 2008/9, falling from more than 215,000 homes a year in 2007/8 to just 130,000 in 2012/13. While 140,660 homes were built in last year, the figure remained significantly below the government targets.
Labour’s London Assembly housing spokesperson, Tom Copley AM, said he would be looking at the small print of the announcement before assessing whether or not it will have a positive impact.
“Let’s not forget that when this policy was touted earlier this year, the prime minister was promising us social rents, only for the then housing minister to say they would be at the so-called ‘affordable rent’ which is much more expensive,” said Copley.
“If the government has now decided that they are going to deliver what we actually need, which is genuine council homes at social rent, they’ve got to get serious about supporting councils to build these new homes. This means lifting the cap on council borrowing to build, providing meaningful grants for councils and formally scrapping the postponed forced sale of high value council homes that still hangs over local authorities.
“Instead of wasting £10bn further inflating house prices with Help to Buy, the prime minister should use that money to deliver 167,000 new social houses.”
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