BSRIA is in agreement with the recent House of Lords Economic Affairs Committee that we must ‘tackle the housing crisis’ who have stated that government must lift its target by 50 per cent and build 300,000 homes each year. Local authorities and housing associations must be free to build substantial numbers of homes for rent and for sale.
In its report, Building More Homes, the cross-party House of Lords Economic Affairs Committee criticises the government’s housing policy for:
- Setting a new homes target homes which will fail to meet the demand for new homes.
- Moderating the rate of house price increases.
- Restricting local authorities’ access to funding to build more social housing.
- Creating uncertainty in the already dysfunctional housing market by frequent changes to tax rules and subsidies for house purchases, reductions in social rents and the extension of the Right to Buy. All of these changes reduce the supply of homes for those who need low cost rental accommodation.
The Committee makes wide-ranging recommendations to address the crisis, including:
- Restraints on local authority borrowing should be lifted: they should be free to borrow to fund social housebuilding as they are other building programmes. This would enable local authorities to resume their historic role as one of the major builders of new homes, especially social housing.
- Council tax should be charged on development that is not completed quickly. The Government’s reliance on private developers to meet its target of new homes is misguided. The private sector housebuilding market is oligopolistic with the eight largest builders building 50 per cent of new homes. Their business model is to restrict the volume of housebuilding to maximise their profit margin. To address this, the Committee recommend that local authorities are granted the power to levy council tax on developments that are not completed within a set time period.
- Maximise the use of public land. The Committee recommends that a senior Cabinet minister must be given overall responsibility for identifying and coordinating the release of public land for housing, with a particular focus on providing low cost homes. The National Infrastructure Commission should oversee this process.
Julia Evans, Chief Executive, BSRIA, said: “We are facing a severe crisis with home ownership being simply unaffordable for a lot of society. The only way to address this is to increase supply. We need local government and housing associations to get back into the business of building. This is indeed an issue for the newly appointed Construction Minister and Parliamentary Under Secretary of State – Jesse Norman MP – to whom BSRIA will be specifically signaling this concern.
There must be houses for everyone on the housing spectrum: from social housing, to starter homes, growing families and executive housing. This spectrum of housing is needed throughout the country. BSRIA has supported the Right to Buy Scheme which should be used as part of the mix for those who need it to get on the housing ladder.
Government must also allow local authorities to borrow to build and accelerate building on spare public land.”
Building More Homes