Just weeks into her new role she was due to meet industry leaders in
London recently after Mr Hick wrote to follow up some of the
concerns he raised with the Prime Minister. However, pressure of
Parliamentary business meant she was forced to pull out of the
meeting at the last minute.
Mr Hick said: “Mrs Beckett clearly
has many demands on her time. It is disappointing that we were not
able to meet last month but I hope we can do so soon. I think the
house building industry has a number of important issues to raise
with the government.”
Mr Hick has written to Mrs Beckett
to outline some of these issues, including the impact which the
financial crisis is having on funding for ‘affordable homes’ – homes
built by housing associations for people who cannot afford to buy a
house, even at today’s lower prices. Many of these homes are
financed partly with money from the government’s Housing
Corporation, with the housing association often seeking to borrow
the rest of cash from banks.
Mr Hick said: “Many of these vitally
important housing schemes are being held up because the banks are
not approving the necessary loans – or certainly not approving them
swiftly enough – despite the fact that there is very little risk
because much of the money is coming from the Housing Corporation.
“Most of the major banks in this
market are ones in which the government has now taken a large
shareholding. I would like the government to use the influence it
should now have to get the banks to honour their promises to lend at
similar levels to last year.
“This would release funding to
provide housing for some of the most vulnerable people in society.
At the same time it would provide a core of work for builders such
as Larkfleet at a time when the open market for new housing has
Mr Hick also wants the government to
put pressure on the banks to provide mortgages for ‘equity share’
schemes being promoted by housing associations. These schemes allow
people to buy a proportion of a new home and rent the rest from the
Mr Hick praised the moves the
government has made to help the open market for homes, including
schemes such as MyChoiceHomeBuy under which some people have
received up to half the price of the home from the government. The
mortgage is paid off in the usual way with a small monthly fee
payable on the MyChoiceHomeBuy share. However, funding has now
temporarily ceased until spring 2009.
Mr Hick said: “The scheme has made
new homes affordable for many more people in the area. At a time
when house prices are lower than they have been for some time,
paying perhaps as little as half the price makes it a great bargain.
“Unfortunately, though, the scheme
has had major problems. There is far too much paperwork and the
processing of applications is far too slow. Often, by the time
people who want to buy a house find out if the government will put
up cash under MyChoiceHomeBuy, their mortgage offer has expired and
they have to start the whole process over again.
“We were among the first builders to
get involved in MyChoiceHomeBuy, back in June, and we have yet to
complete a single sale under the scheme.”
In his letter, Mr Hick also drew Mrs
Beckett’s attention to other specific problems facing the industry
such as the fact that, as part of the government’s plan to cut
carbon emissions, new homes have to be built to increasingly tough
standards. These standards are adding thousands of pounds to the
cost of homes, making delivery almost impossible without substantial
government funding. The problem is made worse by the fact that this
increasing regulation and cost is coming into the market at just the
wrong time of the economic cycle.
He also expressed concern about
recent changes to the way in which commercial rates are charged on
buildings. He says this is making forward planning of developments
very difficult and is having a profound effect on the development of
local economies – which will ultimately affect jobs. He acknowledges
that Alistair Darling has made some helpful changes in the
Pre-Budget Report but says that these do not go far enough.
Mr Hick hopes that Mrs Beckett will
try to tackle some of these issues. He said: “I hope she will shake
things up a bit in government. We need action swiftly if the house
building industry is not to collapse totally.”
December 2008 -
Peterborough UK Community Website