Further measures are needed on affordable housing
We are in the midst of a housing crisis and urgent action is needed to ensure more housing is built to meet growing demand.
Deputy Prime Minister Angela Rayner’s announcement, over the summer, of an overhaul of England’s planning rules laid out some positive first steps towards addressing this issue – but the Government must go further if we are to tackle the lack of affordable housing properly.
Part of Ms Rayner’s announcement was news of a forthcoming consultation on reforms to the Right to Buy (RTB) scheme.
While RTB can and has delivered home ownership for many, the current format no longer works, so this consultation has been warmly received by councils that have seen their housing stock diminish significantly under the scheme.
We are pleased to see the Government will implement some of the LGA’s long-standing asks around RTB immediately, for a two-year period.
The increase in the maximum permitted contribution from RTB receipts to replacement affordable housing from 50 to 100 per cent, the use of RTB receipts – along with section 106 contributions – and lifting the cap on the percentage of replacements delivered as acquisitions each year (currently 50 per cent) are all positive steps towards addressing the issues with the scheme.
The rising discounts and restrictions government places on councils’ use of RTB receipts has meant that councils have been selling property at a discounted rate and the money raised from the sale is usually not sufficient to cover the building costs of replacing the property.
Last year alone, there was a net loss of 7,449 social homes because of RTB sales. Councils need to be allowed to set discount levels at which homes can be purchased, as well as retain 100 per cent of their receipts permanently if the Right to Buy scheme is to be manageable.
Reforming Right to Buy is only part of the solution, however.
Government should enable the rollout of five-year local housing deals by 2025 to all areas of the country that want them – combining funding from multiple national housing programmes into a single pot.
New research from the LGA has found that the rollout of five-year local housing deals by 2025 would lead to 200,000 additional social homes being built over the span of 30 years, resulting in a 21 per cent increase in social housebuilding.
The report also suggests that by moving towards a single long-term fund, there will be significant improvement in housing delivery by prioritising a strategic approach over short-term thinking, avoiding boom-and-bust cycles of housebuilding.
The findings suggest a programme of consecutive minimum five-year housing regimes would deliver net socio-economic benefits worth £31 billion in today’s prices over 30 years.
While much of the focus of planning reforms seems to be on ways to speed up planning permission, the reality is that planning is not a barrier to housebuilding. Nine in 10 planning applications are approved by councils, and there are more than a million homes allocated in local plans across England that are waiting to be taken up by developers. While these sites do not yet have planning permission, they have formally been identified as suitable for housing by councils.
Ms Rayner’s more recent announcement of a new homes ‘accelerator’ to speed up the delivery of stalled housing sites would help councils deliver more homes and reduce their reliance on temporary accommodation.
Other measures the LGA has said would help councils support a faster buildout of schemes include urgently introducing a ‘stalled sites’ council-tax premium, as well as a streamlined compulsory purchase process to acquire stalled sites, or sites where developers do not build out to agreed rates.
“By moving towards a single long-term fund, there will be significant improvement in housing delivery”
Councils should also be given powers to direct diversification of housing products on sites, to speed up overall buildout.
A new government presents an opportunity to reset the relationship between national and local government. While national government can provide useful guidance on housebuilding and planning, it is local councils and communities who know their areas best and are therefore the ones best placed to deliver on the housing needs of their communities.
We are clear that any changes to national planning policy should be suitably flexible to allow authorities to make judgement decisions on managing competing demands for housing uses in their local areas.
While we will look carefully at the changes proposed to planning policy and housing targets, local government stands ready to work with national government on its detailed delivery plans to ensure practical solutions to these long-standing problems are found.
Housing and planning
Key government proposals include:
- New, mandatory housing targets for all councils in England.
- The first port of call for development will be brownfield land.
- Councils will have to review their green belt land if needed to meet their own target, identifying and prioritising ‘grey belt’ land.
- A definition of ‘grey belt’ land, which includes land on the edge of existing settlements or roads, old petrol stations and car parks.
- Land that is safeguarded for environmental reasons will continue to be protected.
- Introduction of a universal system of strategic planning across England, to deliver on the Government’s manifesto commitment to plan for growth on a larger-than-local scale.
- More support for mixed-use sites, comprising a variety of ownership and rental tenures.
- New flexibilities in the Affordable Homes Programme to unlock housing delivery in London.
- Increased flexibilities on how councils can use their Right to Buy receipts, including:
- removing the caps on the percentage of replacements delivered as acquisitions and the percentage cost of a replacement home that can be funded using these receipts
- giving councils the ability to combine Right to Buy receipts with section 106 contributions.
- A wider review of Right to Buy, looking at eligibility criteria and protections for new homes, with a consultation in the autumn.
- Confirmation of a third round of the Local Authority Housing Fund, with £450 million for councils to acquire and create homes for families at risk of homelessness.
- Awaab’s Law will be introduced into the social rented sector.
- Proposals to reform the Nationally Significant Infrastructure Projects regime.
- For more on the LGA’s housing and planning work visit our website.