Building More Homes, a new report from the House of Lords Economic Affairs Select Committee, condemns the Government’s housing policy. The report lays out a comprehensive and devastating critique of our failure to deliver the housing we need and puts forward the radical changes in policy required would be required to change this.
Investigating in response to the housing crisis, the report recommends that the Government raises its house building target by 50 per cent, building 300,000 homes each year, and calls on them to respond to the lack of supply in the housing market. It claims that to achieve its target the Government must recognise the inability of the private sector, as currently incentivised, to build the number of homes needed.
Writers of the report want to see local authorities and housing associations freed up to build a considerable numbers of homes for rent and sale, and points out a number of recommendations:
‘Lift restraints on local authority borrowing’
Local authorities should be allowed to borrow to fund housebuilding as they are with other building programmes. This would enable local councils to continue their traditional role as one of the major builders of new homes, and in particular social housing.
This would also make use of the current low cost of borrowing and would mean local authorities could make a significant contribution to the UK’s future housing supply. In addition, since the Government announced that they will abandon their 2020 fiscal target, there is now an opportunity to increase local authority borrowing powers.
‘Council tax charge on delayed developments’
The Economic Affairs Committee also recommended in their report that the Government grants local authorities the ability to levy council tax on developments that are not being built fast enough. The intention being to bring forward the use of public land and provide local authorities the power to increase planning fees.
Many in the media have welcomed the ‘Building More Homes’ report – The Guardian stated that ‘It ought to be required reading for the incoming housing minister, Gavin Barwell’. Some however, have drawn attention to other problems which exacerbate the housing crisis.
One of the prevailing issues is that a lot of existing housing stock remains under-occupied. If ‘under-occupied’ is to mean households with two or more empty bedrooms, then 51 per cent of households in England are under-occupied at present, increasing from 39 per cent of households in 1995-1996.
In an effort to combat this, McCarthy & Stone have suggested tax breaks for older people who wish to downsize into specialist accommodation. Claiming that,
'It would increase the number of people downsizing, as well as free up under-occupied housing'.
Even if all these policies were workable, the increasing economic uncertainty in the UK begs the question: how is Brexit going to effect the housing supply? Even if the share values of the major housebuilders recover to previous levels, the enthusiasm for new development is unlikely to do the same. In these uncertain times, even the Government’s 1 million new homes target must be in considerable doubt, let alone the 50 per cent increase proposed by the peers.
This article was written by Account Executive Oliver Pearce