Three Treasury reviews will have a bearing on social housing. First out will be Sir John Egan's report on the construction skills shortage, due in February. Hot on its heels will be Professor David Miles' review of the market for long-term, fixed-rate mortgages, to be published with the Budget in March.
But the most significant of the three is economist Kate Barker's investigation into housing supply in the UK, a final version of which is also due with the Budget. Barker, a member of the Bank of England's monetary policy committee, may not call directly for more investment but her work will show that the government must invest much more in housebuilding – the £1.5bn it has invested for 2003/04 is still £500m below that of the Conservatives' early 1990s peak.
Meanwhile chancellor Gordon Brown can expect to face calls for homeownership to be taxed to boost social housing. Clearly, this would be political suicide, so he will refuse this and instead make more homebuyers pay stamp duty at the higher rate, in order to capture some of the growth in house prices (see graph on house prices, page 27).
In July, Brown will unveil the 2005-2008 comprehensive spending review. In December's pre-Budget statement, he said the NHS would be the big winner, so everyone else will have to tighten their belts.
Development
Despite the government's spending spree in the 10 months since the Communities Plan, fewer than 20,000 social homes will be built in England in 2004 – that's 25,000 short of the Barker report's estimate of the bare minimum necessary.
There will no doubt be some harsh words from deputy prime minister John Prescott after his department gets an ear-bashing from the Treasury.
The Housing Corporation's new approach to development will begin in earnest when the new financial year starts in April. Expect to see many more joint ventures as small and medium-sized registered social landlords either get together to boost the overall size of their combined development programme to a value large enough to become one of the corporation's development partners, or simply badger the bigger players to let them into their group structures.
Off-site manufacturing will start to catch on in a big way in 2004, but probably not quite as the government had hoped. Instead of a growing UK manufacturing base in response to rising demand, expect costs to be kept down through imports from countries where the technology is established and labour is cheaper. Polish and Swedish firms will be laughing; Prescott, prefab's biggest British fan, won't be so amused.
Rent restructuring
Rent restructuring may not be coming into force until April 2012, but those expecting to be worst affected will need to start their preparations this year.
Black and minority-ethnic housing associations, which traditionally have higher rents, will be hardest hit and the ODPM has given the Housing Corporation £15m to help those that expect to lose more than 10% of their rental income. They will hear if their bids have been successful by the end of March, and can then reduce costs by repaying loans or boost income by taking on new stock.
Source
Housing Today
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