What can Gove deliver?

Patrick Mooney, housing consultant and news editor of Housing, Management & Maintenance magazine asks what can Michael Gove hope to deliver on new housebuilding?

Trying to keep up to date with Government policies for new housebuilding can be a thankless task with many twists and turns, along with inevitable feelings of uncertainty that you have either missed a vital announcement, or an unforseen change is just around the corner. With Michael Gove’s return as the Levelling Up and Housing Secretary after a four-month gap, that uncertain feeling has returned. For instance has he come back just to deal with “unfinished business” from his very productive first stint in the job, or has he got a completely new set of priorities agreed with Rishi Sunak? 

The rumours emanating from his civil servants is that Mr Gove is keen to start work again on the original list of policies and projects that won him a surprising number of plaudits from across the social housing sector. In his first period in office, which only lasted 10 months, he let it be known that the housebuilding sector should not be overly focussed on delivering against an arbitrary target – like the 300,000 new homes a year figure, despite it being taken directly from the Conservatives’ manifesto for the 2019 general election. Instead he wanted the focus to be on the quality of new homes, rather than just the numbers getting built. More recently he has signposted a cautious commitment to delivering 300,000 homes annually, but highlighted difficulties with meeting the target, namely shortages of materials, labour, land and people’s unwillingness to have new developments on their doorstep.

Of course in his (albeit short) absence, the housing market has changed an awful lot and a difficult problem to solve has got a whole lot worse. Housing affordability has materially worsened for many people due to rising mortgage rates – the average rate for a two-year fixed rate mortgage shot up from around 4.25 per cent to around 6.5 per cent in the wake of Kwarteng’s short-lived mini budget – and already historically high private rents have jumped by around 20 per cent in many parts of the country, with homelessness also on the rise. 

In his absence the latest big idea for delivering new housing and economic growth through investment zones was launched by the Truss administration. These would have unprecedented powers to slice through established planning policies and constraints, with generous tax breaks for investors willing to take a punt. However, it is not clear if any of Messrs Gove, Hunt or Sunak are particular fans of these and only time will tell if they are allowed to thrive, or will wither and die like many wizard ideas beforehand. 


Earlier in the year Mr Gove was winning plaudits for tackling the developers of dangerously clad high-rise blocks and sorting out a raft of regulatory changes in both the private and social rented sectors, but he also let it be known that he also wanted to review the mortgage market and whether it helped or hindered homebuyers. Before he was able to develop his ideas on this, he was sacked for suggesting to Boris Johnson that his time was up. Perhaps the time to reveal his ideas has now come.

Since 2013 one of the biggest influences on the housing market has been the subsidy package known as Help to Buy. First introduced by George Osborne in the wake of the property crash, in its various forms and iterations it has helped over a third of a million people to buy their first home. But since the end of October it is no more and at least for the moment, we have no idea what, if anything is going to replace it. Is this where Mr Gove could make his mark?

The impact of Help to Buy cannot be under-estimated although it had many critics for driving up prices and boosting the profits of volume builders. A House of Lords report determined that Help to Buy had not been ‘good value money’ for the taxpayer, with a forecast bill of over £29 billion by the time it finishes. The report concluded that the money spent on Help to Buy would have been more effectively spent on building more new homes, which would be more likely to result in more affordable house prices. 

Another drawback was that the scheme only applied to new homes, which do not grow in value as fast as older properties. New builds usually sell for up to 15 per cent more, but they lose this premium after a few years. A report by the consumer magazine Which in June 2020 reported that as the Help to Buy scheme’s popularity increased, so too did its price tag. Between April 2013 and the end of 2019, the average price paid by first-time buyers in England for any type of home increased by 39 per cent. The average amount paid by all buyers of new-build properties also increased by 39 per cent. But the amount paid by first-time buyers using Help to Buy jumped by a much heftier 51 per cent, showing it was very good business for volume builders’ shareholders.


Gove’s options for supporting housebuilding have been made more difficult by the parlous state of the public finances, but also by the lacklustre performance of the agency charged with delivering the Government’s vision for new housing and regeneration. Homes England has been underdelivering on most of its targets (particularly for low cost housing) and recently we learnt that more than half of the development sites transferred to the agency under the Government’s flagship land disposal scheme have still not been disposed of to would-be developers.

The figures were revealed in a report reviewing the Government’s Public Land for Housing Programme, which ran from 2015 until March 2020. According to the latest update, which analysed the success of the five-year programme, Homes England only disposed of 34 out of 73 sites – unlocking land for just 1,663 homes. Its original target had been to release sufficient land from government departments to facilitate the building of 160,000 new homes. Under the guise of delivering on Levelling Up policies I expect to see Gove’s department to support a focus on new developments at brownfield sites in urban areas, bowing to backbench pressures to protect as much of the green belt as possible. This would also be consistent with comments made by Rishi Sunak during the party leadership hustings after Johnson resigned. 

Personally I think Gove is also likely to give more support to the self and custom-built sector, helping to boost SME builders and creating new jobs in the construction sector. Earlier this year he helped to secure additional investment in the Help to Build scheme with £150m (for equity loans in support of five per cent deposits) and a target of contributing 30,000 – 40,000 new homes a year. It is seen as an imaginative way of contributing to the Levelling Up agenda, of which Michael Gove is known to be a big fan. Homes England has already been tasked with finding more sites for providing self and custom build plots within regeneration projects across the country and more use made of modular factory-built units to boost custom homebuilding further.


A boost might also be given to the development of more shared ownership housing and this could be somewhere that mortgage reform could really play a significant part by helping to simplify the legal and financial design of products. This is a form of affordable housing that is already receiving a growing proportion of the Government’s financial support in comparison to rented housing and this is likely to continue. Recent tweaks such as allowing shared owners to purchase additional equity shares as small as one per cent have yet to make a significant difference to the product’s attractiveness to buyers and it is thought Gove is looking for new ideas to re-market the shared ownership brand.

Local community led housing schemes may also benefit from more investment, with a growing emphasis on land trusts and housing co-operatives to deliver local solutions to local problems, while staying under local control. Community led housing is believed to have a key role to play in improving the design and construction quality of homes using modern methods of construction, while giving more opportunity for smaller house builders to work on projects, growing local economies and regenerating derelict areas by delivering homes that are affordable for local people.

A key for new housing schemes will be in showing the impact they will be able to make to struggling areas. This is almost certainly where Michael Gove will show his support for new housing development. Whether his preferences can make the same impact on the market as Help to Buy, or can endure for a decade, is something that only time will tell but I suspect we are in for an interesting time which will keep those involved in housing on their toes and constantly wondering if they’ve got the measure of the Secretary of State.