New research reveals that UK workers are concerned that a lack of quality family housing in the North could derail the Government’s Northern Powerhouse plans.
Despite the Government’s ambitions to create an additional 850,000 jobs in the North through the Northern Powerhouse scheme, Avant Homes says that such growth is unrealistic given the severity of the region’s current housing shortage.
This view is supported by the findings of an independent survey of 2,000 UK residents in full-time employment, which found that 77% of Northern workers believe the region urgently needs more quality, family housing. Almost half (46%) of younger workers based outside the region (aged 25-34) said that the current lack of quality housing was deterring them from moving to the North for work.
Separate analysis from Avant Homes also shows that the changes to Stamp Duty announced in the Autumn Budget (to exempt first time buyers from paying the duty up to £300,000), will disproportionately benefit buyers in the South of England compared to those based in the North.
The biggest beneficiaries of the change are first time buyers in London who will save almost £5,000 on average and those in the South East, who will save close to £4,000. By comparison, first time buyers across the North of England will see a far smaller benefit, saving as little as £12 in the North East and £260 in Yorkshire from the policy change.
In response to the Autumn Budget and these research findings, Avant Homes has launched its Northern Powerhouse Building Manifesto, calling on Chancellor Philip Hammond to rethink his proposals in four key housing areas to ensure the Government’s Northern Powerhouse agenda continues to move forward.
Colin Lewis, CEO of Avant Homes, commented:
“The Autumn Budget was a real missed opportunity and big disappointment for the North of England. Yet again, we saw misguided Government policies slanted in favour of the South and an outright failure to address several key elements that could be make or break for the success of its Northern Powerhouse project.
“Our research of workers across the UK highlights that the chronic and expanding undersupply of housing in the North of England is a key element missing from the Government’s housing strategy, which needs specific policies targeted at the region, rather than the Chancellor’s current ‘one-size-fits-all’ approach.
“As our Northern Powerhouse Building Manifesto sets out, if the Government can fix the North’s broken housing market, this will play a huge part in ensuring fairer housing provision for all and, ultimately, a lasting legacy for the project.”
Avant Homes’ Northern Powerhouse Building Manifesto
1. Regionalise Stamp Duty
“Stamp Duty reform for first time buyers was the Chancellor’s main headline grabber in the Budget. However, yet again, it underlined the Government’s misguided belief that a "one size fits all" approach to housing policy will benefit the whole country. This is simply not the case.
“While we welcome a Stamp Duty cut for first time buyers in principle, our analysis shows that home buyers in the South of England will see far greater savings from the change than those in the North. We would like to see the Government recognise this disparity and make further stamp duty cuts for all buyers in the North. This would go some way to balance out the level of funds the Government is effectively committing to the housing markets in each region.
“To further address this glaring discrepancy, we’d like to see stamp duty levels calculated on the relative wages that home buyers receive, which we all know is closely linked to where in the country they live.”
2. Increase Northern housing supply through regional green belt planning reform
“If the Government really expects its Northern Powerhouse plans to create an additional 850,000 jobs in the North, it is going to have to drive a significant uplift in residential development in the region to house this sizeable future workforce. Regional planning reform in the North is the key to unlocking this, and taking a new approach to the greenbelt in the North would make a huge difference.
“While the planning process is still tortuous across many areas of the country, local authorities in the North in particular have been dragging their heels for too long. Over the past decade, housebuilding in the region has declined 28% while the volume of homes built in London has increased by the same amount. The Government needs to intervene now, by speeding up planning times and freeing up new areas of both brownfield and greenfield land in the North to urgently boost the supply of homes in the region.”
3. Reduce the Help to Buy cap and link Government subsidies to housebuilder volume growth
“Help to Buy was conspicuous by its absence from the Autumn Budget. The continuation of the scheme in its current form is symptomatic of Government policy too focused on boosting demand, while offering little to address the supply side - and this is where the problem lies.
"Although the housebuilding sector has benefited significantly from the stimulus offered by Help to Buy (HTB), it is not being driven to build more new homes. Indeed, HTB supported an average of 39% of the new homes sales of the top five national housebuilders last year. But the same housebuilders increased their volumes on average by only 6% over the same period. This has to change.
“To fix it, housebuilder access to Help to Buy subsidies should be linked to increased volumes, regional build quotas, and fixed volume targets of realistically priced properties for first-time buyers. If a housebuilder does not increase its output by a given percentage, reduce the access they have to using the Help to Buy scheme the following year.”
“The current Help to Buy limit of £400K for areas outside of London captures far too wide a demographic, with many prospective buyers accessing the scheme even though they are able to finance their new home purchase without it. Cutting the cap to £250,000 would better refocus Help to Buy on growing families and first-time buyers in the North of England, who need more targeted support to take their first step onto and up the housing ladder. This strategy has already proved successful in Scotland where the cap is even lower at £200,000.
4. Overhaul technical education to drive the Northern housing supply
“For too long, the UK housebuilding industry has been focused on building new homes in the South of England, while development in the North has steadily declined. If the industry is ever going to successfully respond to this need and deliver more new homes in the North, what is certain is that a much larger pool of specialist skills will be required in the region.
“While we were pleased to see £34 million committed to developing construction skills across the country, it significantly underestimates how much is really needed to address this problem, while remaining unclear how this money is going to be proportioned by region. What is certain is that the North and Midlands need to receive by far the largest proportion of these funds to make up for lost ground given the region’s deterioration of specialist skills over the past decade.
“In particular we’d like to see the Government investing in Regional Training Academies in the Midlands and North to support this, putting more time and energy into training the greater number of technicians, quantity surveyors, bricklayers, plasterers and other expert tradespeople needed to make the Northern Powerhouse and Midlands Machine dream a reality.”