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A Conveyancers view of Grant Shapps' New Housing Scheme

David Cameron has promised to “get Britain building again” with the help of his new housing strategy, the details of which were published last Monday.

But with shocking new figures on affordable home construction released just one day later, the timing of the new scheme has been rather controversial.

Any Conveyancing specialist should welcome a move towards more homes, and thus more property sales, but this PR hiccup raises serious questions as to the government’s ability to organise and deliver on their promises.

“Laying the Foundations: A Housing Strategy for England”

The report details the government’s plans to invest £400m in the housing sector, offering a mortgage guarantee scheme to make affordable 95% mortgages available to first time buyers; and investing in developments which have been stalled for financial reasons.

The government hopes that the scheme will not only help the housing market, but also boost associated service sectors such as conveyancing and plumbing and support the economy as a whole.

But on Tuesday the latest figures of the Homes and Communities Agency revealed that building began on only 454 affordable houses between April and September – 97% fewer than in the same period in 2010.

The unspoken allegation that the government had used the new report to distract from the bad news led to a heated debate between editor John Humphrys and housing minister Grant Shapps on Friday’s BBC4 Today programme.

Grant Shapps on Radio 4’s Today Show

Before they even came to discuss the scheme itself, Shapps took the opportunity to criticise Thursday’s Today programme’s allegation that he had pulled out of that show. He denied that he had ever agreed to the booking, stating that he was unable to attend because he was on a train to Stoke-on-Trent at the time, and that he had not been informed of the request until late he previous evening.

While Shapps insisted that the programme gave “the wrong impression to the listeners”, Humphrys insisted that there was a booking with Shapps’s staff.  

The timing of the report then came under Humphrys’s criticism. He established that Shapps knew about the publication date of the figures and suggested that it would have been better to delay the report until after their release. Shapps rejected this, arguing that “we should not be moving our programme around because of a set of official statistics. ” He claimed that this would be “an abuse of power”.

When asked to explain the 97% drop, Shapps downplayed the significance of the numbers. He insisted that they were “very internal” and had never received wide news coverage before. Humphrys countered out that they had been sharply criticized by housing charity Shelter.

Shapps also claimed that the statistics were merely due to the transition period between the previous Labour government’s Pathfinder programme and the new Get Britain Building scheme, arguing that building starts would pick up again in the next six months period.

The Housing Minister claimed,

“On what really matters, how many homes are going to get built, rather than being clever and playing with statistics, the truth is we are going to build a lot more homes than were built, the net increase, under the previous administration. “

A gloomy future for affordable housing, and for Conveyancing Solicitors?

The state of the market certainly indicates that reinvigoration schemes are desperately needed.  The number of houses built in 2010 was at its lowest since the 1920s, at just 134, 000, while approximately 230, 000 new households are created each year. This gap prices many potential buyers out of the market, with the average house price of £240, 033 now more than 11 times the annual average income of £21, 398.

But for those who disagree with Shapps that “what really matters” is not just the sum total of houses built, but how many of those are affordable, it is questionable whether the new housing scheme is good news. While Shapps is convinced that the scheme will lead to 16, 000 new houses built, critics fear that only 20% of these will be affordable.

And the opposition points out that the £400m scheme is small consolation compared to the £4bn cut made to the housing budget in last year’s spending review. Part of this reduction was the benefit cap which limits benefits for unemployed couple and single parent households to £500 a week.

The new rules, which will take effect from 2013, will price many families out of the rental market, particularly in south east England. The London Councils report warns that 133, 000 London families will no longer be able to pay their rent, putting thousands at the risk of homelessness.

But even disregarding affordable housing worries, it is by no means certain that the new programme will take off. Previous similar schemes, such as the 2009 Kickstart Housing Delivery plan which also aimed to invest £400m in stalled developments, had barely any impact on the market.

“Historically, channelling subsidies to house-builders has not delivered”, says Matt Griffiths of PricedOut, a campaign group for first time buyers.

So with pessimistic prognoses by the National Housing Federation and doubt about the efficiency of government schemes, the immediate future of the housing and Conveyancing market remains bleak.


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