What would be a better use of the £1.9bn in housing funds given back to the Treasury?

We reached out to property professionals via PR platform News Page to see if there was a better use for almost £2bn in 'unneeded' cash handed back to the Treasury by Michael Gove.

Related topics:  Finance,  Housing,  Government
Property | Reporter
14th July 2023
Gove 123
"I believe the answer here is simple, provide the money to councils to build a new stock of affordable housing and social housing within their council areas"

Earlier this week, it was revealed that Michael Gove has given £1.9bn of funding back to the Treasury after reportedly struggling to find housing projects to spend it on, effectively throwing away hundreds of millions of pounds budgeted for 2022-23, including funds earmarked for new affordable housing (£255m) and £245m which was to go towards improving building safety.

Lisa Nandy, shadow housing secretary, slammed the DLUHCs decision to hand back the cash, which accounts for about a third of its entire housing budget, saying: “The Conservatives have simply given up trying to solve the housing crisis that they helped create.

“Not content with slashing housebuilding by scrapping housing targets, stalling on renters’ reform or rowing back on their promises to leaseholders, ministers are either too incompetent or too out-of-touch to consider it a priority to fix dangerous buildings or build new affordable homes in the middle of a housing crisis.”

According to the latest estimates, England currently has the lowest number of homes per 1,000 people in Western Europe and with housebuilding targets effectively scrapped, a broken planning system, and a mortgage crisis gathering momentum at a worrying pace, surely there must be some use for this nearly £2bn in unwanted money to improve housing in the UK.

We reached out to property professionals via PR platform News Page to see what they thought.

£74.80 for everyone!

Gary Bush, Financial Adviser at MortgageShop.com: "It would be lovely to see the £1.9bn of funding used on the local authorities, not private building corporates, building more low-cost housing that is all shared ownership, making them more affordable to borrowers.

"I'd love to have said as an alternative for the government to give the money back to the UK's struggling mortgage holders to help with paying their increased mortgages but with 25.4 odd million such households they would all only get £74.80."

Stephen Perkins, Managing Director at Yellow Brick Mortgages: "I believe the answer here is simple, provide the money to councils to build a new stock of affordable housing and social housing within their council areas."

Mohamed Dawood, Founder at Beyoot Ltd: "The housing market is indeed a complex issue, and allocating funds effectively can make a significant impact on addressing its challenges.

"It's important to note that comprehensive solutions require a holistic approach and involvement from various stakeholders. The limitation of understanding the motivation of all stakeholders, be they private, government or end users is unfortunately one of the reasons why the housing crisis exists.

"The allocation of these funds should be used to motivate more stakeholder developer entry and automated processes for planning (or central authority direction). Only by stimulating the sector and removing unnecessary entry barriers, will the crisis ever be resolved."

Louise Holme, Business Owner at HolmeStores: "It is surely time to change our approach to commercial housing in this country.

"Our homes define our health and need a holistic perspective that can successfully seek to resolve the problems with society, ageing populations, health, sense of community, and of course our natural environment. Many other developed countries are trialling new house-building schemes that don't saturate the land with brick and concrete with remote and soulless out-of-town estates.

"Acknowledging that multi-purpose land estates that can provide natural environments and small-scale regenerative farming in harmony with innovative and efficient community-based housing is the first step in saving our physical health, mental health, farming methods and housing problems.

"Having single-purpose departmentalised budget funding no longer works...Government departments need to stop firefighting and instead work together to collaboratively create and finance ambitious plans for the future of this country."

Replace Help to Buy and sack Gove

Samuel Mather-Holgate, Independent Financial Advisor at Mather and Murray Financial: "Michael Gove needs his P45. Use the money to incentive local authorities to want building projects in their area, and for a replacement scheme now Help to Buy is closed.

"The government is unimaginative, stale and needs replacing. Just add the to the treasury coffers and wait til they are replaced. I expect Labour to have more creative ideas."

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