Innovative plans for 500,000 new homes unveiled to avert emerging housing nightmare
Innovative plans have been unveiled by councils which would provide half a million desperately-needed new homes for hard-pressed families by the end of the decade.
The Local Government Association, which represents more than 370 councils in England and Wales, wants a raft of new measures to help tackle the housing crisis head-on – staving off an ever-swelling swathe of householders priced out from getting on the housing ladder.
The call comes after government figures show that 221,000 new homes are needed every year. Yet currently, based on last year’s figures, only half that amount is being built. In a decade, growing at this rate, the total shortage of homes would be over a million and equal the population of Birmingham, Britain’s second biggest city.
In his inaugural speech as the new LGA chair, at its annual conference 8 July, councillor David Sparks will be setting out a blueprint for the first 100 days of the next government, tackling the key issues facing Britain today, which include reforming the current house building system.
Key measures proposed by the LGA include government incentive schemes to encourage private developers to speed up housing delivery; the creation of council-led local land trusts; the complete scrapping of the housing borrowing cap and an overhaul of the government’s Right to Buy scheme.
Councils have proven in the past that, if they are given the powers, then they can build at scale. For example, councils regularly built over 100,000 homes each year between 1946 and 1980.
LGA research reveals:
– In the last 14 years, house prices have on average soared by over 155%. However, the average wage has risen by only 41%.
– More than three million adults aged 20-34 are now living with their parents, house prices are rising faster than average earnings and there are 1.7 million households on the waiting lists for affordable homes across England.
– The number of people renting has doubled and the average first-time buyer is now aged 35. In the South-East house prices have rocketed to 14 time the average salary in London and 11 times in the south-East.
– Around half (44%) of the 50 most unaffordable places to live in England outside of London are in rural areas. House prices in these areas are between 13 and 20 times the average salary.
David said: “The current housing crisis is nothing short of a national scandal which is going to get worse without radical action. There is an emerging nightmare looming just down the street.
“A generation of parents who thought they’d paid off their mortgages are now finding themselves having to foot the bill for their children’s mortgages. The London housing bubble is not just a London issue it’s a national problem being felt in urban and rural areas in every region.
“The shortage of houses in this country is a top priority for people, but buying a house is increasingly out of reach for many. Over the last two Parliaments, the number of people under 45 who can afford their own home has fallen by a fifth.
“Our plans would see half a million new homes built, transforming the lives of hundreds of thousands of families. Councils have set a precedent in the past and shown they can deliver housing on a large scale. It’s time the next government learned from the past to build for the future.”
The LGA is calling for:
The Government to put in place a meaningful incentives scheme to encourage private developers to speed up the delivery of housing which already has planning permission. Incentives should include reducing up-front costs and risks through early discussions with developers; guarantees and phasing payments for infrastructure. This would be alongside financial penalties through the Community Infrastructure Levy and council tax system where planning permission has expired. This will bring forward the estimated 60,000 homes on hold or classified as shelved in 2013 and speed up the delivery of private sector homes more widely, delivering an estimated additional 90,000 homes.
The Chancellor to create council-led local land trusts with powers to pool surplus central and local government land for housing and make decisions about its disposal. Trusts would operate on a “build now pay later” model to support large sites to come forward with necessary infrastructure and affordable housing, a model which could also be applied to private sector landowners. This would enable 140,000 homes to be built over the next Parliament;
An immediate removal of the Housing Revenue Account borrowing cap, to be replaced by the same controls that apply to any other council borrowing, leading to 80,000 homes over five years. This would be in addition to the estimated 80,000 homes councils plan to build in partnership with housing associations and private developers over the next five years.
The scrapping of the Right to Buy scheme’s complex arrangements for councils and ensuring the discount offered is in line with the local housing market and stimulates sales and that the receipts from sales are retained directly by the council to reinvest in replacement housing. This will allow councils to replace around 50,000 houses sold through Right to Buy.
