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17.11.16

Duo of reports urge long-term and devolved housing strategy

Think tank Localis has today joined the resounding chorus of organisations who argue that more housing would be built if councils were given devolved powers.

Annual housing figures from the DCLG, released yesterday, show that there were 189,650 net additional dwellings (including new builds and changes of use) in 2015-16, an increase of 11% from the previous year.

Gavin Barwell, the housing minister, argued: “We promised to turbocharge house building so more people can have the security of their own home, and that is exactly what we are doing.”

However, the new report from Localis, commissioned by Barclay’s, pointed out that in 2014-15, the most recent year for which figures are available, just 2,510 new homes were built by local authorities.

It argued that the government target of building one million homes by 2020 is likely to be missed without giving councils more powers to increase the levels of social housing.

The LGA estimates that between 4 million and 5.4 million people will need affordable housing by 2024.

Liam Booth-Smith, chief executive of Localis, said: “If the government is serious about building more homes they’re going to have to go further than previous administrations in tackling the issue.

“The new elected city mayors present government with an opportunity to devolve more powers over housing and loosen the leash on finance. With a housing white paper coming soon this is a relatively simple win for government.”

In the Conservative Party conference, communities secretary Sajid Javid promised a housing White Paper later this year, with “further significant measures… all helping us towards our ambition for a million homes by 2020”.

Since 2012, the government has imposed the Housing Revenue Account debt cap, which has restricted council investment in social care.

Localis carried out a survey of senior local authority members, which found that 56% described the debt cap as ineffective in helping them respond to housing needs, and 78% said that devolved powers over the cap would be helpful.  In its report, the think tank called for the cap to be lifted altogether.

Starter homes and Right to Buy ‘ineffective’

Similarly, over half of respondents in the survey said regulations around their duty to provide starter homes were ineffective.

The starter home scheme involves offering a 20% discount on homes to first-time buyers under 40, but council leaders in many areas told Localis the homes were still too expensive for their local population.

Respondents also expressed worries about starter homes’ status as ‘affordable housing’, arguing it made it harder to provide affordable rental accommodation.

Because of this, Localis said that starter home regulations should be more sensitive to specific local circumstances, allowing councils greater flexibility to implement the policy.

The organisation also said that combined authorities should be given devolved powers to freeze land values as part of their Mayoral Development Corporation.

In the survey, two-thirds of respondents also called the much-criticised Right to Buy scheme ‘ineffective’ or ‘very ineffective’. The LGA has consistently called for “urgent reform” of the Right to Buy scheme, warning that councils are increasingly unable to replace the houses they’ve lost.

Today, Localis added that local authorities should be allowed to keep all receipts from Right to Buy sales, and allowing them to place a moratorium on the new owners letting out their property.

Redfern review calls for ‘genuine long-term strategy’

Separately, the results of the Redfern review into the decline in home ownership, commissioned by shadow secretary for housing John Healey MP, were published today. In his foreword, Healey argued the independent review was the “first major inquiry” into home ownership in over a decade, setting out the causes for the recent decline in home ownership by drawing on extensive modelling, polling, focusing groups and sector input.

Pete Redfern, chief executive of Taylor Wimpey, who led the review, said: “We must focus on supporting today’s younger generation and creating a genuine long-term housing strategy independent of short-term party politics if we are to improve the position in a sustainable way for future generations.”

The rate of home ownership in England fell from 70.9% in 2003 to 63.6% in 2014-15, and from 58.6% to 36.7% for the 25-34 age group.

To address this, the review recommended targeting schemes such as Help to Buy towards first-time buyers and lowering price points on a regional basis.

It also recommended limiting starter homes to exception sites, increasing the maximum scale of the Lifetime ISA, and extending Right to Buy so that all homes are replaced.

Healey commented: “At root, this decline in home ownership matters to me because it matters to so many people in this country that we are determined to serve.

“And it matters too because the shrinking opportunity for young people on ordinary incomes to own a home is at the centre of the growing gulf between housing haves and housing have-nots. Housing is at the heart of widening wealth inequality in our country.”

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