The government is promising £3.7bn for affordable housing – but will this solve the housing crisis?

Great, all we need is another 249,999 of those every year and we're sorted. Image: Getty.

This post is presented by WhatHouse? the leading portal for new build homes in the UK.

As part of last year’s Autumn Statement, chancellor Philip Hammond said the government would invest £3.7bn in building 140,000 new houses – 40,000 of them classed as “affordable”. The announcement was cautiously welcomed by many within the housing industry; a number of other industry figures, though, were quick to point out that £3.7bn was still a drop in the ocean compared to what was really needed to tackle the housing crisis.

So who’s right? Could this £3.7bn make some difference or even solve the housing crisis altogether? Or has the housing crisis already got to a stage where it would be nigh on impossible for any government to tackle it successfully?

Apart from anything else, it’s hard to overestimate the scale of the UK housing crisis right now. The Redfern Review, published in November last year, was just one report of many to highlight how severe the shortage of affordable homes had become. It showed that since 1996 real house prices have risen 151 per cent, whilst wage growth has been much slower – and for the last decade has entirely stagnated. 

The result of this is the average price of a UK home is now six times the average income. This widening ratio between house prices and earnings means it’s younger house buyers in particular who are finding it hard to get on the property ladder. This in is just one consequence of a complex housing crisis that looks increasingly difficult to solve with each year that goes by.

The good news is that, in addition to the £3.7bn put aside for new homes, the Chancellor also announced that the government was committed to doubling the annual capital spending on housing. Further good news is that the government has pledged is to build 200,000 new homes each year until a total of one million new-build properties are completed by 2020-21.


However, most analysts believe that at least 250,000 new homes need to be built annually, to keep up with population growth alone. In addition, the government’s promised figure of 200,000 new homes is thought by many to be a little optimistic. Only 160,000 new houses were completed in the UK during 2015.

As for that £3.7bn investment, even if it doesn’t make a significant impression in regards to the overall housing crisis, its importance as the headline act in the chancellor’s first Autumn Statement could still prove to be significant. It suggests that the government is indeed serious about making housing policy one of its top priorities, as it has previously stated.

It should also be noted that the first major government policy announcement of 2017 was regarding housing and the creation of 14 “garden” towns and villages in England which should result in around 200,000 new homes being built.

So if, sometime in the next few years, it becomes clear that the housing situation has significantly improved due to government policy, then the £3.7bn announced in last year’s Autumn Statement may be remembered – not so much for the actual amount, but as the first sign the government was genuinely willing to tackle the crisis. The next test to see if this optimism holds up is when the government’s White Paper on housing is published later this month.

Keith Osborne is online editor at WhatHouse?, the UK’s best new homes portal and housing scheme advisory source. Keith has over 15 years’ experience writing within the property and new build homes industry. Each year he inspects new build homes as a regular judge for the biggest housebuilder awards in the UK – The WhatHouse? Awards.

 
 
 
 

To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”