Five ways to rebalance national housing policy

Regional local councils build 70% of new homes but receive a fraction of the support from government enjoyed by big cities and Metropolitan councils, a new report from the Housing & Finance Institute claims.

The success of regional local councils has been well-demonstrated in their overall contribution to housebuilding. In 2015/16 around 70% of all new homes were built in regional local council areas.

When it comes to permissions for new homes regional local council areas are responsible for around 70% too.

Despite this, it is the big cities and Metropolitan councils who receive the lion’s share of government funding and attention.

“It is a long time since the 70% got their fair share of funding for housing – the 70% who are doing lots of the heavy lifting without sufficient central government support. Let’s take 2009/10,” the report, named From the Shores to the Shires, said. “The London-Met group got half of the money but built only 30% of the homes. All of the other English councils got half of the money but built 70% of the homes. When times are so tough for ordinary hard-working councils, that’s simply not fair.”

The HFI research shows that there is a growing geographical imbalance in where housing associations are building new homes. In some areas, such as London, almost 30% of housebuilding is done by housing associations, whilst in other areas, such as Cumbria and Derbyshire the proportion of housing association homes built is less than 7%.

Around 18% of local authorities had a housing association ‘not-spot’ in 2015/16. ‘Not-spots’ are those areas where no homes at all were built by housing associations in an area. Out of these ‘not- spots’, the overwhelming majority, around 90%, were in regional local councils.

The number of local authority ‘not-spots’ has risen by 25% year on year. The group comprising the increase is entirely made up of regional local councils. The number of ‘not-spots’ in the London-Met group has remained the same year on year.

“There is not much point giving high value asset sales receipts to housing associations if they are not going to build in that area,” the report said. “So why not let those councils keep the receipts if they have a credible plan to build?”

The report suggested a five-point plan to re-balance national housing policy:

  • Keep the cash from sales: Allow regional local councils to keep the cash from any valuable houses they sell, provided there is a track record of housing delivery or a clear deliverable plan for new homes within four years.
  • Exempt from the Levy: Allow regional local councils to be exempted from the high value assets levy, provided there is a track record of housing delivery or a clear deliverable plan for new homes within four years.
  • Devo for Districts: Give extra cash allocations and financial support to regional local councils if they can show they can and will deliver more homes and growth. ‘Devo for Districts’ should be allowed for councils with a track record who could benefit from some of the freedoms and flexibilities which have been given to urban centres.
  • Housing hubs: Pinpoint key areas of housing opportunity in regional local councils which can be translated into more homes, faster. Provide additional support for infrastructure funding to realise these homes sooner, including for new water supply and other utilities funding.
  • Housing Business Ready: Fund capacity building with our flagship “Housing Business Ready” programme to help councils in the practical work needed to implement good business skills, improve monitoring and business resilience and drive through housing delivery.
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