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Chartered Institute of Housing Annual Conference 2008

Date of speech	17 June 2008
Location	Harrogate International Centre
Event summary	The Chartered Institute of Housing (CIH) Conference and Exhibition 2008

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Transcript of the speech as delivered.

Introduction

Thank you very much for inviting me to be with you today - and to Paul for that kind introduction.

I'm pleased to have the chance to talk to people with a crucial role to play at an important time for the housing market - when housing is never far from the front pages or people's minds.

In recent months, I've been meeting with Chief Execs and representative organisations; people working at the front-line of housing services and in the housebuilding industry; and tenants and homeowners themselves.

"It's housing which gives people the sense of security and stability, the confidence that they need in other areas."

All concerned about the implications of the state of the housing market; all with valid ideas about what needs to be done; and all very keen to hear from government about what we are doing to tackle the challenges ahead.

People are raising a whole serious of really important questions.

People who are finding it tough at present: tough to raise a mortgage or to meet rising housing costs. Housebuilders facing very challenging business conditions, which affects the work of many of you in the affordable housing sector.

And longer-term challenges. Homeowners are asking me how their children will ever be able to afford their own home. Renters are asking me where they can find a fair and flexible deal. Social tenants are asking me what they can expect from their landlords in the future.

Today, I want to address some of those questions, and talk about how across Government, we are working to support the housing market through these challenging times.

But I also want to talk about our long-term programme of investment, building and reform.

State of the market and government response

A responsible government has to be ready to adapt to changing circumstances. Since coming into this role, it is clear to me that an effective government is one that not only has the policies and vision for the long term but one that is also capable of being responsive and flexible enough to meet the challenges of unforeseen events - which in the case of the current credit crunch are international and unpredictable in nature.

And this is precisely what our Government is doing. I am working day in day out with colleagues across Whitehall to ensure that we are proactively responding to the short-term challenges, yet at the same time not being distracted from our long-term priorities.

You are all well aware of the impact the global credit crunch is having:

• Very tight lending conditions with mortgage approvals down 49 per cent on last year
• House prices falling
• Housing starts and completions down in the latest quarter.

Many of you are saying conditions are their toughest since the early 1990s. But what you are also telling me is that this remains a very different situation from that period.

Back then we faced high unemployment and interest rates, with the economy as a whole in deep recession.

Today our economic fundamentals are strong: with low interest rates and high levels of employment.

In reality, there is barely an industry or a country around the world which is untouched by the impact of the credit crunch. But it's housing where much of the attention has been focused.

And rightly so, because it's housing which gives people the sense of security and stability, the confidence that they need in other areas.

Everyone working in housing, even outside the private market, is affected by these short-term conditions.

For instance, local authorities rely, in part, on private development to help meet local need for affordable housing.

We've put in place a comprehensive and robust package of measures to help minimise the short-term turbulence, and continue to promote fairness and stability in the housing market.

First, to keep the financial markets working smoothly, the Bank of England has injected £50 billion worth of liquidity, making sure that there is a sufficient supply of credit working its way around the system.

Second, to support those worried about their finances, we've strengthened debt advice services - with £9 million funding for face-to-face debt advice from trusted third sector partners like the Citizens Advice Bureau.

Third, to increase the supply of affordable housing while helping the housebuilding industry, the Housing Corporation will be able to spend £200 million buying homes on the open market.

Homes which will then be made available for social rent or affordable housing schemes.

Fourth, to help more first-time buyers onto the property ladder, we've announced a expansion of our shared equity schemes.

And we have modified the eligibility criteria, so that all households with an income below £60,000 who could not otherwise afford to buy can now apply for one of our low cost home ownership products.

This will make homeownership a realistic prospect for many more people. In fact, we expect to help 75,000 households with a shared equity product or low cost home ownership scheme over the next three years.

The Prime Minister and I recently met a nurse who had just bought her first house thanks to one of these products.

She told us that without that help, she would have been struggling for years to get her first foot on the property ladder.

And with this expanded scheme, we can now reach out to more people like her - hard-working individuals and families who just need a little extra help and a more creative approach.

We need to build on this work so we are able to respond as flexibly and creatively as possible to housing market conditions.

And so I am announcing today that I have asked my officials, working with English Partnerships, the Housing Corporation and Sir Bob Kerslake's Homes and Communities Agency (HCA) transition team, to urgently provide me with proposals on where we can do more across our programmes to work with RSLs, housebuilders and others to minimise the problems we currently face and create the right conditions for rapid recovery.

Rest assured, if there are ways that we can use our affordable housing programme or land assets to maintain housing numbers, prepare for a speedy recovery, and support families facing difficulties, we will use them.

We will not be straight-jacketed by our forward plans. Responsiveness, flexibility and pro-activity will be our watch-words.

In the meantime I want to stress that many of you have a crucial role to play. We will all benefit the more you focus on taking up the existing programme and getting firm commitments in place.

National intervention, local implementation

But Government action alone won't help us to successfully navigate these short-term difficulties.

I think there are a couple of really simple ways that all those working in housing could help to maximise the benefits of these measures.

The first is particularly easy. Help make sure that people know about the support that's on offer.

When people come asking about social housing, are we doing enough to tell them about other options like shared ownership?

Are we telling them about the advice lines they can call when they are worried about their finances?

Are we looking beyond their immediate housing needs to help them realise their wider aspirations - perhaps pointing them in the direction of advice about training or jobs?

When they know all the options, people are more confident they are making informed decisions that are right for their family.

I would also like to see a closer relationship between those building homes and those providing the finance - helping to develop new financial products and mortgages that work for people like the nurse I met.

I know that some housebuilders are already thinking about getting involved in shared equity schemes, and even the rental market. I want to work with you to exploit your creativity and to discover if out of adversity we can find new ways of doing things in the future.

And I think that's very encouraging. There's clearly an appetite for these kinds of products. Since the Prime Minister and I announced these shared equity schemes, more than 7000 people have applied for them.

And where there is consumer demand, there is commercial opportunity. So I'm keen to hear from those looking to work in this way.

But as I said at the start, getting the short-term package of measures right is only part of the story.

We still face long-term challenges of a lack of housing that people can afford.

Driving to Harrogate yesterday, I was reminded of some of these challenges.

Places nearby like Leeds, York, Bradford - ten years ago, you wouldn't have thought there would have been a housing shortage in some of these areas.

In Harrogate itself, ten years ago, on average first time buyers here would be looking at properties worth around four and a half times their income.

Today, they are lucky to find properties worth less than ten times their income.

Whatever the short-term fluctuations, the fact is that over the past five years, prices have gone up by around 39 per cent.

These prices are far beyond the reach of many first time buyers.

Population trends and household projections are the same today as they were when we set out our ambitions last year in the green paper.

Therefore, we need to continue with our long-term programme to deliver the housing the country needs.

Speaking up for local people

I think that despite the debate we have had in the last year since the Green Paper was published, there is still a general perception that development is a bad thing.

And there are those who will utilise all their resources and energy into opposing it in their area.

It is true that there is some bad development and there are some places where any development would be completely inappropriate but that doesn't make all development bad.

Now, I understand the concerns of those who live in areas where more housing is planned, including the suggested locations for eco-towns. That local infrastructure can't cope. That existing communities will suffer. That rural life will be ruined. I am listening. In fact yesterday I met with a group who are campaigning against the eco-town in Marston in Bedfordshire.

But what I say to them, and to others who oppose these plans and housing growth in general is - don't just say 'no' but tell me the ways in which developments could be modified and improved, to see if the proposal could go ahead in a way that meets their concerns.

"Housing supply remains my number one priority, and the only realistic solution to the long-term challenges this country faces."

When I was out in Lincolnshire recently, I met a family of three generations crammed into one house, with some family members having to sleep in the conservatory. And yesterday in Bedfordshire I met a family overcrowded in their two bedroom house, in desperate need of a third bedroom. Who speaks up for these families?

I want to make sure that all those on waiting lists, sleeping on friends' sofas, or relying on their parents to scrape together a deposit, also have a chance to be heard.

Local government and housing associations have an important role to play in championing these interests. You can speak up for the people who really need those homes.

In Lincolnshire, that's very much what East Lindsey district council was trying to do with their eco-town bid, making sure that they are working to deliver the affordable housing their residents desperately needed.

That's what we need to see more of.

Housing reform - consolidating recent changes

Housing supply remains my number one priority, and the only realistic solution to the long-term challenges this country faces.

But there is also work to be done on implementing and consolidating some of the very big changes already introduced - through the Housing and Regeneration Bill and the Hills and Cave reviews.

That means getting the HCA up and off the ground. We anticipate that over the first five years, this body will save around a billion pounds - enough for 15,000 social homes.

Making sure that the Tenant Services Authority - previously Oftenant - gets off to a successful start. By the way, I would like to thank Richard Smith, an employee at the Housing Corporation, who suggested the new name.

I know many of you are keen to make progress on extending the remit of this body to cover local authorities too. Me too!

Local authority tenants want good services, the chance to be heard, and their problems resolved quickly.

So I just want to restate our commitment to making that happen at the earliest opportunity - in the legislation which will follow the Community Empowerment White Paper.

Green paper

But there is more. As the Prime Minister announced in the draft legislative programme, we plan to publish a Housing Reform green paper by the end of the year.

We will set out proposals to provide housing services and options which help and encourage people towards greater economic independence and social mobility; matching responsibility with opportunity so that they can realise their potential and best meet their housing aspirations in the future. We will deliver greater fairness and make best use of our resources.

Over, the coming weeks and months, building on the work in hand on improving employment opportunities for social tenants we will explore with you and others the future of social housing. But also, how the private rented sector can play more of a role to ensure the offer of housing can be more in tune with the diversity of needs in our communities.

I want to hear directly from all those who might benefit from housing reform. Social tenants with good ideas about improving their estates. Working families who find it a struggle in the private sector and would like more support. Aspiring homeowners who can't find the help they are looking for.

Many of these people may not come into contact with Housing Services and if they do the discussion and the offer is limited. To help reach more of these people, the CIH is today launching an e-forum where people can log on and have their say about housing.

This is just the start of three days in which you'll be discussing all the hot topics in housing. I hope you are prepared to come out of your comfort zones and acknowledge the sometimes collectively our best intentions don't always result in the best outcomes. Identify Government policies that hold you back but be candid about where it isn't central control but lack of good local practice which is part of the problem.

Be clear what it is you can't do as opposed to what you won't do.

And, more than anything else don't be held hostage by the way things have been done in the past.

Thank you very much.