Housing the North

November 30, 2012 2:11 pm

By Ann Pittard

The minister charged with planning, Nick Boles, this week joined the chorus of those looking for more English land to build upon with his claim that we should find 2-3% more land to build on. This chimes well with the Northern Economic Futures Commission’s call for a ‘Mapping the Futures’ programme to drive national spatial planning for the next 20 years.

But he need look no further. Rich in land, home to vast construction supply chain and boasting world-leading specialist expertise, the North presents the ideal location to restock the English housing market, to rebalance the economy, and to develop innovation in housing and neighbourhoods. It is time that these Northern assets were used to their full effect.

All too often, comment on the malaise of our national housing market centres on London and the South East. There is little doubt that the problems in the capital’s housing market are wide, and run deep, with rents extortionate and prices prohibitive. As valid as these comments are, often they ignore the persistent problems to the north of the M25.

In fact, housing in the north is in a state of crisis; a crisis stemming from two problems. The first we share with other parts of the UK – not enough good quality homes. The widening gap between supply and demand has left increasing numbers of Northern families dislocated from the housing market. Unlike comparable areas further South, many Northern towns and cities face continuing stagnation in new housing supply.  In London last year, net completions were only 8% short of the levels achieved at the height of the boom in 2006/07.  Southern unitary districts were not far behind.  In contrast, new housing delivery in Northern Mets lagged at less than half the 2006/07 level.  And in Greater Manchester, that powerhouse of the Northern economy, completions were 70% below 2006/07 levels (NHF 2012).

This growing shortfall in housing increases pressures on house prices, which despite recession have risen in the North more than in any other region outside of the capital.  Between 2001-2011, house prices rose by 106% across the North East, North West, and Yorkshire and Humber, but earnings rose by only 31%. (NHF, 2012). The lack of affordable homes and available mortgages increases pressure on the rented sector, which are set to rise in the North by 29% over the next six years (NHF, 2012), while earnings continue to stagnate.  The result of the combined pressures is that more people are forced onto the housing waiting lists (already disproportionately high in Northern England).

The second problem Northern England has is very large numbers on Housing Benefit. There are 1.35 million Housing Benefit claimants in the three Northern regions of England, costing the country around £100million pounds a week in rent subsidies, and the numbers continue to rise (DWP, 2012). In the current spending round, Housing Benefit expenditure is projected to be £94.5 billion up to 2015 for the UK, against only £4.5 billion in grants and capital expenditure to build new homes.(Cooke and Hull, 2012) This significant mismatch between capital and revenue expenditure is doing little to resolve chronic under-supply.

A revival of Northern, and national economic fortunes would play a significant part reducing undersupply, and reversing Housing Benefit expenditure; equally, a revival of house building would have significant positive effects on the state of the Northern economy and the size of the benefit bill. But Northern councils have legal responsibilities but little power to deliver meaningful change for the people of their area.

This is a why a fresh approach is needed. Building upon the work of the Together at Home review (Cooke and Hull, 2012), the Northern Economic Futures Commission has argued that the expenditure on Housing Benefit would be better invested in solving the housing supply problem.

We recommend a Sub-regional Housing Fund, radically devolving funding to groups of local authorities, channeling capital expenditure on house building with Housing Benefit expenditure into one local block grant. Based on current expenditure, Manchester would be allocated up to £681million over a three year period, and £663million in Leeds. This level of devolved financing would allow communities to plan and decide on their own housing arrangements, from the houses they build, to their own model for replacing Housing Benefit. For instance, the grant could be used to commission long-term deals with housing developers to build new affordable housing; to purchase existing properties not in residential use, or to release rented housing for those who need it most by facilitating mortgages for those who want to get a foot on the housing ladder. Such proposals are not without challenges but the case is too compelling to ignore, and we are confident that Northern cities will look seriously at the concept in the next iterations of City Deals.

Ann Pittard is Large Business Development Lead for Leeds City Region and a member of IPPR North’s Northern Economic Future Commission. The final report was launched in Leeds today

Latest

  • Comment We should have high expectations of all fathers

    We should have high expectations of all fathers

    Three months ago, on Father’s Day, ICM released a poll showing that two out of three British adults think the role of fathers is undervalued. I find this deeply worrying, but sadly unsurprising. There is no doubt that some progress has been made in recent years: many fathers are spending more time with their children, while the ability to balance work and parenthood is an option for an increasing number of mothers. But, while of course welcome, these trends should […]

    Read more →
  • News Deliver on devolution, say LabourList readers

    Deliver on devolution, say LabourList readers

    Given that there are a multitude of different issues facing local authorities, particularly in the midst of significant cuts to local budgets, we asked LabourList leaders what they they would like to see the next Government prioritise in their area. We asked people to rank what they thought was most important. In terms of average rankings, most people thought that creating more and better jobs was the most important priority for Government. This is, perhaps, unsurprising – although the number […]

    Read more →
  • Comment Change starts now

    Change starts now

    The outcome of the Scottish referendum answers decisively the question on independence. But the issues unleashed and feelings exposed in the campaign will mean further important action for Labour, action to address the economic disaffection and political alienation which was laid bare on the doorsteps in Glasgow just as they are in towns across England. While we campaigned for a No vote, too many of the poorest, most deprived, who we are in politics to empower and to represent, voted […]

    Read more →
  • Featured Miliband calls for UK Constitutional Convention – and the whole country will have a say, not just politicians

    Miliband calls for UK Constitutional Convention – and the whole country will have a say, not just politicians

    This morning David Cameron called for a rushed through, Westminster-based, top-down, politician-led approach to solving the questions around UK-wide devolution. I wasn’t impressed. I said that: This is an unprecedented chance to extend similar powers down from the centre to the whole of the UK. The Labour Party – in every corner of this land – has an important role to play in the renewal of our society and democracy that must take place. We must end top down Westminster […]

    Read more →
  • News Make this Conference about the NHS, LabourList readers tell Miliband

    Make this Conference about the NHS, LabourList readers tell Miliband

      Ed Miliband should make the NHS the focus of his Labour Conference speech, say LabourList readers. 52% said that setting out Labour’s offer on the health service should be the central offer of Miliband’s address to delegates on Tuesday. It has been rumoured that Labour will attempt to make the NHS the defining issue of the 2015 election, and a poll earlier this week suggested it was the only “big” issue that we hold a lead on, beating the […]

    Read more →