The Queen’s speech: What the industry is saying

// HA News

The Queen’s speech has now been given, and it looks like there is some cause for concern within the industry. With the Right-to-Buy scheme set to be extended to housing associations and EU referendum uncertainty looming, what is the industry response? HAmag gathers opinions from those affected by the latest housing bill.

Real estate

The British Property Federation (BPF) has commented on the impact that the European Union Referendum Bill, announced in today’s Queen’s Speech, could have on the real estate industry.

Melanie Leech, Chief Executive of the British Property Federation, commented “The prospect of an EU Referendum will bring a lot of uncertainty and, as we saw ahead of the Referendum in Scotland, this can cause a significant slowdown in investment activity, which could impact negatively on the built environment.”

“We urge the government to provide clarity about its parameters and timetable as soon as possible to reduce this risk.”

Social housing

Jenny Brown, Head of Social Housing, Grant Thornton UK LLP says “The Right to Buy Bill, extends the right for housing association tenants to purchase their property at a significant discount so it becomes applicable to a much wider tenant base.  It will create challenges for housing associations. It will impact on their financial resilience and ability to borrow to build more housing stock and fundamentally challenges their position as independent entities (many of which are charitable), able to protect and maximise the value from their asset base.”

“There is also a risk that this may create additional financial pressures on tenants, those who take advantage of a great opportunity but who are financially overstretched as a result, especially at a time of changes to the welfare system. An alternative approach would be to look at housing in the context of devolution, and for government to empower local authorities and housing associations to work together to take local measures to increase the supply of social rent and affordable homes for key workers and families.”

House building

The Government must succeed in its aim to create millions of apprenticeships over the lifetime of this Parliament if it is to solve the housing crisis, according to the Federation of Master Builders (FMB).

Commenting on the legislation announced in today’s Queen’s Speech, Sarah McMonagle, Head of External Affairs at the Federation of Master Builders (FMB), said “The new Government is right to bring forward legislation on both apprenticeships and housing in its first Queen’s Speech as one cannot succeed without the other. The 200,000 Starter Homes the Government wants built over the next five years quite simply won’t get off the ground unless we tackle the construction skills crisis. Our latest research shows that 50% of small local builders are struggling to hire bricklayers and this is a stark reminder of how the Government’s ambitions to build more new homes could be scuppered by a lack of skilled workers.”

“We are pleased to see that the Full Employment and Welfare Bill will allow for fuller scrutiny of how the Government is performing against its ambitious target of creating three million apprenticeships over the next five years. As the construction industry accounts for around 7% of GDP, it means our sector should conceivably be delivering 210,000 of these apprenticeships – or 42,000 a year which is a big ask, especially given that we only achieved 16,000 apprenticeship starts in our sector in 2013/2014. At the end of the last Parliament, the Government announced a new voucher model for apprenticeship funding and we’re keen to make sure this is suitable for small construction firms – if it’s not developed with small firms in mind, it could threaten their desire and ability to train apprentices.”

“From a construction SME perspective, we’re also keen to ensure the Enterprise Bill succeeds where others have failed and finally puts a nail in the coffin of late payment. Poor payment practices have plagued the construction industry for too long and we’re hopeful that widening the powers for representative bodies to act on behalf of their members to challenge grossly unfair payment terms will go some way to address this.”

Housing Associations

Commenting on plans to allow housing associations to buy their homes under the right to buy which was announced in the Queen’s Speech today, Jonathan Hulley, partner and head of Clarke Willmott’s Housing and Asset Management team, said: “Providing the number of homes that people need is a vitally important issue for the UK economy and local communities. Many housing association tenants already have a right to acquire their homes, but these proposals would help them buy their homes at much bigger discounts.

“This creates a complex issue for social housing providers, who have long-term investments which are based on rental income generated by the homes that they own. The impact that the right to buy policy has on levels of affordable housing is well known, and is one of the reasons why the Welsh Assembly Government is proposing to restrict it in Wales. Housing providers are concerned at the impact this proposal may have on affordable housing numbers and may even consider taking legal action to protect their assets.

“Housing associations have played such a key role in providing affordable housing and have had to remodel their business plans in the absence of grant funding. These proposals could put further pressure on their ability to deliver the homes that are badly needed. ”

Apprenticeships

Mark Robinson, Chief Executive of the Scape Group, comments on today’s Queen’s speech: “Today marks the start of five years of majority government and the construction industry, as well as the politicians, should see this stability as a call to action to create a long-term sustainable plan for infrastructure. Large scale construction projects do not just improve direct communications, but they create a ripple effect that benefits local economies.

“The UK needs a strong construction sector with a healthy stream of new talent and resources to address the dual challenge of providing sustainable infrastructure and housing for a fast growing population.

“The construction industry needs around 45,000 new recruits a year to keep up with demand, so a centralised drive for more apprentices is vital to keep Britain building. As an industry the burden of creating and retaining skilled labour falls on all our shoulders and we collectively need to ensure we are attracting the best and brightest.  By showcasing what the industry has to offer to the widest cross-section of young people, the sector can dispel the false stereotypes about careers in construction.”

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