The 2013 Budget – Bang went the starting gun on the May 2015 election

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The 2013 Budget – Bang went the starting gun on the May 2015 election

Budgets are always an interesting time. Normally they are about the next financial year, with an eye to years 2 and 3. We talk about 5-year forecasts. But no one looks back at their forecasts from 5 years ago and assesses how they did. So I tend to regard them with a healthy degree of scepticism. Whatever we predict now, we know will be different in five years.

Except, this year’s budget indicates a series of policy directions that will impact on the lives of affordable providers and local authorities, and the people they house, for years to come. The battleground for the next election will be bolstering the ‘home ownership aspiration’ and the fight against the ‘undeserving poor’.

There was more money in the budget for housing and I think there will always be some money for housing. Ministers like to point to homes they have had a hand in funding, especially when there are votes in it. But the budget signalled the continued shift from bricks and mortar subsidy to personal support and incentives. Help to Buy is cash in the punter’s pocket. Well, cash in housebuilders’ pockets, actually. The increase in the Right to Buy discount follows suit. Both are about home ownership. Don’t expect large wads of cash for bricks and mortar or for social housing. That’s not the direction of travel.

And the redefinition of who gets housed in affordable or social housing will continue apace. Welfare and immigration reforms have those in social housing directly in their sights. Social housing, as we know it, could be virtually obsolete within a generation, with only a minority of associations and some local authorities (within their borrowing caps) holding on to the notion of housing the poorest in society.

For others, with a focus on delivering more homes, the market rented sector and diversification will be the way forward. For some this will be good business, for others, it will end in tears. And the regulator is already worrying. Cosmopolitan, has sent a signal to lenders and, belatedly, one to the Ratings Agencies: don’t expect a bailout fund for near bust associations. We won’t see a wholesale flight of funders, but we will see a real differentiation in lending rates based on performance and the quality of boards and executive teams. Regulation will feel tougher and more intrusive. Deregulation was last year’s style!

And we don’t see a big difference between any of the main parties. So prepare for 2015; signals for the future are already being made. Steve Douglas. Steve can be contacted on 07810152840, steve.douglas@nullaltairltd.co.uk