It’s only natural for a new government to make changes, and sometimes they make changes for the better.
But timing also matters, and the midst of a long and deep economic crisis is the wrong time to tear up funding arrangements for homebuilding.
The government’s decision to replace Labour’s funding scheme for affordable homes with a new scheme of its own devising meant there was a lull when very few new homes were built.
In normal circumstances one might argue that, despite the short-term difficulties it causes for the construction sector, some disruption is a price worth paying to introduce a better system.
Of course, it remains to be seen whether the new funding system, which allows firms to borrow cash against predicted future rents use the money to build new properties, is an improvement or not.
But even if it is, the fact remains that these are not normal circumstances. The construction industry plays an important role in our economy and is a significant source of employment.
In times of economic slowdown, one action the government can take is to encourage new building work and create jobs that way.
In fact, boosting construction can offer an easier “quick win” than boosting manufacturing, vital as manufacturing is. There are workers ready to be employed on building sites now, while some manufacturers face difficulties finding staff with the required skills, limiting the sector’s growth even when everything else is in place. So a recession, or period of very slow growth, is the wrong time to tinker with home building. Nonetheless, that’s what happened.
Ministers have also played fast and loose with the figures. Building of affordable homes shot up in the second half of last financial year because it had shrunk to almost nothing in the first half.
For Minister Grant Shapps to claim this as a triumph was cheeky, to put it mildly. The sensible comparison is with the year previously, and when you look at the numbers that way it’s clear that home building has fallen.
But it’s also fair to note that the Homebuilders Federation is expressing a degree of optimism about the future, thanks partly to policies introduced by the government.
They include measures making it easier for potential buyers to obtain a mortgage as well as relaxed restrictions on planning permission – a mixed chalice for councils, who know that new developments are not always popular with existing nearby residents, but a change that should benefit the economy.
And even if the timing was lousy, the new affordable homes scheme may work out in the long run. At this stage, nobody can say they know for certain what the outcome will be. The data isn’t there.
What’s clear is that in its earliest stages the new funding regime led to a dramatic fall in affordable home building, to the detriment both of potential residents and the wider economy.