What do the Budget announcements mean for housing in the Sheffield City Region?

In today’s Budget the Chancellor for the Exchequer, Philip Hammond, made a series of announcements outlining how the Government plans to address the housing crisis in the UK.

Prior to the announcement housing was expected to feature heavily, and the Chancellor left a raft of housing policies until the end of his speech, promising to build 300,000 new homes on average by the mid 2020’s.

The headline housing announcement from his speech was that from today the stamp duty on any property under £300,000 will be abolished for first time buyers.

Other key housing announcements included:

  • An extra £2.7 billion of funding to the housing infrastructure fund.
  • A large scale regional pilot of Right to Buy for housing association tenants in the Midlands.
  • £400 million more for estate regeneration.
  • £34 million for construction skills and training.
  • Reforms to the planning process to be headed up by Homes England, an expansion of the current Homes and Communities Agency.

Also featuring in the announcements was the establishment of a new task force to head up the Government’s commitment to half rough sleeping by 2022, and end homelessness by 2027.

A series of changes to Universal Credit were also announced, including the removal of the seven day waiting period at the start of a claim, and the outline of plans to ensure a smoother transition between those claiming housing benefit transferring to Universal Credit.

Responding to the announcements outlined in the Budget, Chair of South Yorkshire Housing Association, and Professor of Housing Studies at Sheffield Hallam University, Professor Ian Cole said: “It looks like the Government has finally got the message that we need to increase housing supply. And it was great to see that it is now front and centre of the Government’s overall economic plan.

“The stamp duty changes will definitely grab the headlines and whilst it does provide some help for those currently saving for a deposit it doesn’t help those currently in rented housing for who home ownership is still pretty much a pipe dream. It also runs the risk of increasing house prices.

“It is however a step along the way and clearly a signal from the Government that they have listened to what young people want.

“It will take some time to gear up to meet the promise of 300,000 new homes a year. The devil will be in the detail between the balance of homes for the private sector being developed as opposed to the affordable and social homes that are urgently needed. Our national housing crisis is actually a series of local housing crises, so building the right homes, of the right type, in the right areas is crucial.d

“The elephant in the room though is securing the land to build these new homes on and ensuring that developers build quickly once they have planning permission. The Chancellor promised reforms to the planning process, and we’ll be keeping a close eye on these changes as they are key to helping us build new homes in the Sheffield City Region.”

Sheffield Money Launches

Sheffield has become the first city in the country to pioneer a new approach that provides an alternative to high-cost credit and loan companies. Sheffield Money – the city’s new one-stop money shop – opened its doors to the public on Monday 10th August.

SheffMoney-01

The initiative sees South Yorkshire Housing Association working in partnership with Sheffield City Council and other city leaders to provide the people of Sheffield with a new way to access affordable credit, lower cost loans and financial services.

In its first week of operating Sheffield Money has already received applications from over 250 customers on a range of financial issues.

Operating as a broker service, Sheffield Money is a not-for-profit business and is the first of its kind in the UK. It brings together a range of responsible companies providing access to loans, credit for white goods, savings and bank accounts together with independent money and debt advice.

sheffield moneyThere are an estimated 50,000 people in Sheffield currently using high cost money lenders, borrowing on average £800 each. These loans are subject to high interest   rates that can cause debts to spiral out of control. Sheffield Money offers loans up to £7,500 at an affordable rate that is vastly cheaper than high street equivalents.

Miranda Plowden, Business Development Director at South Yorkshire Housing Association said, “Sheffield Money is the affordable alternative to pay day and doorstep lenders that the city and our customers have been waiting for.

 

 “Our customers now have access to a range of services and products that might not have otherwise been available to them. We’re delighted to have helped fund such a pioneering service for the city – it’s going to make a real difference to a lot of people.”

Rob Shearing, Chief Executive of Sheffield Money, said:

“Sheffield Money is completely different to any other affordable lender, as we act as a broker to match people to the best products for them. We’re here for everyone in Sheffield – from people who need a loan, need white goods, to those who want money advice or want to save with us.”

Sheffield City Council Leader, Councillor Julie Dore, said, “Payday and doorstep lenders have been ripping off and exploiting people most in need of credit, especially some of the most vulnerable people in our city, preying on their need for available credit and charging extortionate interest rates.

“People need a real alternative which will stop them being forced to go to these notorious lenders. That is why we have worked hard to create a new, ethical and affordable credit option by starting Sheffield Money.

To find out more about Sheffield Money visit www.sheffieldmoney.co.uk.

The Budget – the good, the bad and the ugly

Tony Stacey is Chief Executive of South Yorkshire Housing Association and Chair of national housing association body Placeshapers.

Following on from yesterday’s Budget announcement Tony has led the way in speaking out against the cuts which will affect vulnerable families the most. He said:

“So we know now what Osborne had in store for us. I will start – and finish – with the good news”.

“Firstly, what didn’t happen? Young people between 21 and 25 will not have their entitlement to housing support removed. The rumour that our tenants would have to pay the first 10% of their housing benefit has not materialised. There are no plans to claw back from housing associations the additional income generated from ‘pay to stay’”.

“The National Affordable Housing Programme (NAHP) has been protected. The rent rebasing of minus 4% comes to an end in 5 years’ time when the CPI +1% settlement will be restored. Finally, the living wage is to be introduced by 2020″.

“Now the bad news. The reduction of the overall benefits cap to £20,000/£23,000 is disastrous for the hundreds of thousands of families who will be on the receiving end of this. Much has been written about the iniquity of the OBC; there is not space to develop this here. All social landlords will now be assessing what this means for their customers”.

“For South Yorkshire Housing Association (SYHA) this means that the number of families affected goes up from 11 to 254. The average reduction for the 2 parent, 3 child household will be £40 per week. The fact that this reduction comes entirely off housing benefit and leaves landlords with nowhere to go if tenants start to fall behind, means that homelessness is bound to increase”.

“The government has stated that families evicted under these circumstances should not be considered ‘intentionally homeless’. Nevertheless, the personal distress that this will create, and the additional financial pressures on local authorities, are disastrous. 40% of affected households are BME. It is also desperate news for some of our poorest neighbourhoods where these families are clustered. The knock-on effect on local economies is severe”.

“Then there are the other benefit cuts. Vulnerable 18-21 year olds will be required to return to homes where, for many, relationship breakdown and abuse drove them out in the first place. The chancellor’s assurance that vulnerable people will be protected has to be delivered”.

“So what of the impact on associations’ business plans? A combination of the 4% rent reduction, a prospective hike in interest rates next year, the loss of control of our assets that Right to Buy 2 constitutes and the impact on cashflows of welfare cuts means many boards will see no alternative but to cut their new development programmes”.

“How easy will it be for associations to find the required efficiency savings is a question which all must now address. Many will feel that they have already driven out costs through their work on value for money [VFM] in order to compensate for reductions in grant. How much more is left? This will be tough – really tough, but it should not lead to a rash of bankruptcies”.

“Nevertheless, savings on this scale cannot be found by better process management. Jobs, services and community investment will inevitably be cut back. Some associations will feel they cannot continue in their present form, and will look to alternative structural solutions including mergers and demergers. Do not assume that the large associations will be exempt from these pressures”.

“A critical issue which is still to be decided, is whether rent rebasing will affect rents for supported housing. This will be far more difficult to accommodate as over 80% of costs relate to staffing, and commissioners impose specific requirements on staff input. The campaign on this issue begins today”.

“To finish with good news – the Budget does not constitute a declaration of war on housing associations by government as some commentators had suggested. In Greg Clark and Brandon Lewis we have politicians who value housing associations and the impact we make on our local communities.”