Economic Affairs Committee says government must build more homes

By Isabelle Grange

August 2, 2016

HousesofParliament

 

A report by the Economic Affairs Committee says that to tackle the housing crisis, the government must build 300,000 homes each year…

The cross-party House of Lords Economic Affairs Committee released a report which identifies a number of key areas where, they say, the government’s housing policy has failed. These include:

  • Restricting the access local authorities have to funding which means they can’t build more social housing
  • Focusing too much on home ownership which neglects those who rent property
  • Setting a target for building new homes which doesn’t meet the true number of properties needed as well as this failing to slow down the sharp increase in house prices
  • Too much reliance on a limited number of private housebuilders

The committee also believes that the reliance put on private developers by the government to meet its target of new homes built is misplaced. This reliance means the eight largest housebuilders in the private sector are given the task to build 50% of the new homes required. In turn, it means the private housebuilding sector is only shared between a very select number of developers. This both restricts the number of homes being built, while maximising the profit these companies make. The committee recommends that to address this issue, local authorities are given the power to implement council tax penalties on any development that isn’t completed within a set time period.

 

The use of public land must be maximised

Another recommendation made by the committee is that decisive steps must be taken by the government to build on the significant amount of land that’s publicly owned. To do this, the committee recommends that a senior cabinet minister is appointed to identify and then coordinate the release of public land for housing, especially affordable housing.
The chairman of the Economic Affairs Committee, Lord Hollick commented: “Home ownership and increasingly renting property is simply unaffordable for a growing number of people. The country needs to build around 300,000 homes a year in order to address this problem, 50% more than the current government target. Relying on the private sector won’t deliver that as it hasn’t the inclination or ability to do so. It means we need housing associations and local government to get back to building new houses.

“Local authorities want to build new homes but they don’t have the funds to do so nor the ability to borrow in order to begin a major programme of building new social housing. It doesn’t make sense that a local authority is free to borrow money to build a swimming pool and yet can’t do so in order to build new houses.

“We also feel the government is focusing too much on home ownership. Even for those on average incomes, in some places, home ownership will never be achievable. The government must widen its policy to help people who want a secure, good quality rented home. It’s the poorest who are hit hardest by this long-term trend of moving away from subsidising tenancies to subsidising house buyers and should be reconsidered. The government also needs to allow local authorities to borrow in order to build on unused public land if this acute housing crisis is to be properly tackled.”

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