Why the Chancellor’s funding boost was needed


Last week Chancellor Rishi Sunak pledged to provide £2.2bn of funding for housebuilders.

Hopefully this funding can be used to start turning things around when it comes to the delivery of UK homes.

Housing completion levels across the seven largest UK housebuilders – responsible for 43% of new homes – are down 35% over the last 12 months, analysis by Close Brothers Property Finance shows.

Obviously the pandemic prevented tradespeople from being on site for months, while even when builders returned to work social distancing measures slowed things down.

These measures have only intensified with the introduction of lockdown 2.

Before starting work tradespeople have been asked to contact the household to check that no member is showing symptoms of coronavirus or self-isolating.

Meanwhile they’ve been urged to implement a buddy system and ensure that the same people work together where this is needed.

There are other measures they should adhere to, and while they are sensible, they are hardly conducive to speed.

As the UK recovers my hope is that more of the UK’s smaller housebuilders are able to get in on the action, and use cheaper government finance to develop more of their own housing projects.

Major housebuilders are often accused of releasing stock slowly into a region in order to maintain high house prices – but if there’s more competition from multiple builders then capitalistic competition should prevent this from being such an issue.

Despite the temptation to entirely focus on short-term measures designed to prop up the economy, which has been bruised by the pandemic, it’s pleasing that the Chancellor is still focusing on the long-term.

For example the £12.2bn going towards the Affordable Homes Programme should provide grant funding to develop affordable housing for six years.

It’s quite the commitment in these difficult times.

It’s positive that the government recognises that the supply of housing is key to keeping house prices in check, which is key to building a society where people have the opportunity to own the roof over their head in the years ahead.

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