The Government must lift its target by 50% and build 300,000 homes each year to tackle the housing crisis, says a new House of Lords report.
In a new report, Building More Homes, the cross-party House of Lords Economic Affairs Committee has criticised the Government’s housing policy in a number of areas and called for more homes to be built and for rules to be relaxed so local authorities and housing associations can build substantial numbers of homes for rent and for sale.
The report is criticises the Government for setting a new homes target which will fail to meet the demand for new homes or moderate the rate of house price increases and for restricting local authorities’ access to funding to build more social housing. It is also concerned that the government policy provides a narrow focus on home ownership which neglects those who rent their home.
Amongst its wide-ranging recommendations to address the housing crisis the committee believes that restraints on local authority borrowing should be lifted. It believes that this would enable local authorities to resume their historic role as one of the major builders of new homes, particularly social housing.
It also states that Council tax should be charged on development that is not completed quickly, noting that, ‘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% 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.
Commenting Lord Hollick, Chairman of the Committee, said: “We are facing an acute housing crisis with home ownership – and increasingly renting – being simply unaffordable for a great many people.
“The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future. The private sector alone cannot deliver that. It has neither the ability nor motivation to do so. We need local government and housing associations to get back into the business of building.
“The Government are too focussed on home ownership which will never be achievable for a great many people and in some areas it will be out of reach even for those on average incomes. Government policy to tackle the crisis must be broadened out to help people who would benefit from good quality, secure rented homes. It is very concerning that changes to stamp duty for landlords and cuts to social rent could reduce the availability of homes for rent. The long term trend away from subsidising tenancies to subsidising home buyers hits the poorest hardest and should be reversed.”
“If the housing crisis is to be tackled the Government must allow local authorities to borrow to build and accelerate building on surplus public land.”
Lord Hollick, Chairman of the Committee has recorded a video setting out the key recommendations in the report. It is online here.
The report, Building More Homes, is available to view here.
