New National Housing Fund could deliver 40,000 new homes a year

The government should create a fund which could deliver 40,000 new homes annually and boost public finances by £3.4 billion, a new report argues.

ResPublica’s report, A National Housing Fund to Build Homes We Need, offers a radical way to tackle the current housing crisis and makes suggestions for the government to get the housing market working for many.

The report, which follows a a previous report conducted by ResPublica called Going to Scale, presents new research on the potential of a National Housing Fund. It argues that the new fund would significantly boost housing supply by utilising government’s ability to borrow money at low rates, and housing associations’ expertise in letting and managing properties.

The report finds that the new fund would ensure a minimum of 40,000 homes to be built annually, public finances would boost by £3.4 million, 180,000 new jobs in the construction sector would become available, and small and medium-sized enterprises would boost through certainty of purchase.

It also found that the fund could create a financial instrument so that debt does not contribute to the deficit, and support the wider construction industry through repeat investment.

Philip Callan, managing director of PCA and author of the report, said: “Government has confirmed that we have a broken housing market and we now have a strong political consensus to build more rented homes. Historically low borrowing costs can provide the mechanism to deliver the homes we need.

“Our report focuses on the practical steps that government can take to deliver many more homes. All of our proposed actions are in their control. What is needed now is the political will and leadership to make it happen.”

Phillip Blond, director of ResPublica and report author, said: “Successive Governments have failed to build enough homes, or enable enough homes to be built, and the election demonstrated that voters will punish parties at the ballot box if their housing offer is not credible. We must make radical changes if we are going to address a problem which is dividing our society between those who can afford to enter the property market and those who are priced out – the haves and have nots.

“Our National Housing Fund offers the Government a way to finally build the homes it acknowledges it needs. Through the notion of a guaranteed buyer we reinvent the only formula that has ever enabled the state to build at scale. Crucially this idea will dramatically expand the capacity of two relatively dormant sectors, the SME building market and Housing Associations, such that they too can build at scale and open up the market for the millions who need it to work for them.”