Yorkshire set to face plummeting housing investment due to “rigged” government rules

Investment on homes in the north could be set to plummet amid concerns funding is concentrated in the most affluent areas of the south and “rigged against the north”.

Some areas of the north are unable to apply for government funding for new homes
Some areas of the north are unable to apply for government funding for new homes

Public spending on housing in the north has dropped from 24 per cent of the total in England to 17.8 per cent over the last 20 years, and research from Homes for the North shows it could fall to as little as 10 per cent by 2050.

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There is an enormous north-south divide as only four of 72 local authorities in the north are able to access the majority of dedicated public money for funding for new homes.

Hambleton and Harrogate councils are the only local authorities in Yorkshire that are eligible to apply for Homes England funding, which has five programmes that make up 80 per cent of publicly available money for new housing.

The funding is targeted at areas with the biggest affordability problems, meaning most northern councils cannot even apply. This leads to investment being concentrated in the south of England, where rents and property prices are higher.

The system produces a snowball effect where areas that are desperately in need of investment are growing further away from being able to access it, according to Carol Matthews, chair of Homes for the North and chief executive of Riverside housing.

“These rules reinforce the shift of resources to the south and mean house prices grow increasingly quickly in the south and very slowly in the north.

“28 per cent of the population is in the north, but only 16 per cent of the housing funding, and that could get worse. What they're measuring is the wrong thing in terms of house price growth and value growth.”

In large local authorities like Leeds, severe housing problems in one part of the city cannot be addressed properly because they are offset by areas with good affordable housing.

“It's really stupid economics,” she added.

Homes for the North, which represents housing associations in Yorkshire and across the north, said the system was “unintentionally rigged against the north”.

At its annual conference in Leeds yesterday, Ms Matthews issued a call to the next government to address the widening north-south divide. “If we want to rebalance the economy, if we want the UK to be really productive in a Brexit setting or any other kind of setting, we've got to invest in the north.”

Homes for the North is made up of 17 of the largest developing housing associations in the north, which provides affordable homes for a million people and spends £1bn a year on building and maintaining homes.

The organisation calculated that in order to meet demand in a growing northern economy, an additional two million homes were needed by 2050, which breaks down as 50,000 new homes a year until 2027 and 70,000 after that.

This comes as official figures released yesterday show only 55,000 new homes were built in the north in 2018/19, showing the north is currently on track.

The figures show 241,130 net additions to the English housing supply -- a 9 per cent year-on-year increase.

However, Yorkshire and the Humber had the second-least number of new homes, after the North East, with 20,120. The majority of new homes were created in cities and wealthier areas.

Polly Neate, chief executive of housing charity Shelter, also called for a major programme of social housebuilding for the next government to reach Homes for the North’s target.

She said: "If the next government is going to meet its targets and deliver the affordable, secure homes we so desperately need, it's going to have to invest in social housing.

Housing England said: "Geographical targeting of funds does not apply to the Affordable Housing Programme or Local Authority Accelerated Construction programme, meaning the entirety of those funds are available country-wide.

"Where geographical targeting does apply (Housing Infrastructure Fund, Home Building Fund, Small Sites Fund, Land Assembly Fund, Estate Regeneration Fund) it does not mean that funding is not available to the north, it just means funding is prioritised for the least affordable areas of the country in order to support housebuilding in areas of greatest need."