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06.07.16

Renaissance in council housebuilding needed to meet future demand, says LGA

Councils will need new powers to support the building of affordable homes, which up to 5.4 million people will need by 2024, the LGA has said.

Analysis from the Work and Learning Institute for the LGA shows that even if the country is able to achieve full employment by 2024 by upskilling 3.5 million people, 4 million people will still need access to affordable housing, and 5.4 million will need access if qualification levels do not increase. Between 2.25 million and 3.07 million of these people will be of working age.

The interim report of the LGA Housing Commission, released today at the LGA’s annual conference, recommends a new approach to building affordable homes, including joint delivery structures, releasing more land for building on a ‘build now, pay later’ model, and supporting SME builders.

The LGA also warned that the drive to build new homes could be threatened by the economic uncertainty following the UK’s vote to leave the European Union.

Cllr Peter Box, housing spokesperson for the LGA, said: “Bold new action is needed and in the wake of the UK's decision to leave the European Union, national and local government must come together around our joint ambition to build homes and strong, inclusive communities.

“A renaissance in house building by councils must be at the heart of this bold new action. The private sector clearly plays a crucial role but it cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead.”

The LGA said that the planning system should focus on supporting local jobs and infrastructure and developing healthy and inclusive communities.

The LGA also called for more commitment to council housebuilding. The country needs an estimated 250,000 houses a year, but was last building at that level in 1977-78, when 44% of new homes were built by councils.

In contrast, councils are currently building just 1% of new houses. Private developers build 77% of new houses, but these only amount to an average of 90,000 a year.

The LGA said that reforms requiring the reduction of rents and forcing the sale of assets could threaten the availability of council housing.

It said councils should be granted new freedoms, including the flexibility to count the full value of their own land as part of the cost of building new homes, the right to retain a greater proportion of Right to Buy receipts to fund new homes and to combine receipts from Right to Buy sales, Higher Value Asset sales and Homes and Community Agency funding, and more investment from the government through Housing Revenue Accounts.

The controversial Housing and Planning Act, intended to increase the availability of affordable housing, passed into law in May, with LGA president Lord Kerslake saying in the House of Lords that it leaves councils paying most of the cost of social housing.

Shelter has warned that the government’s plans to extend Right to Buy could force councils to raise £26m a year by selling off council housing.

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Comments

Jenny J   11/07/2016 at 11:43

I don't think the Housing & Planning Act's most fervent supporters could or would honestly say that it was "intended to increase the availability of affordable housing"! Not, at least, without their fingers firmly crossed behind their backs.

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