Local councils ask to resume housebuilding role

July 28, 2016 / Isla MacFarlane
Local councils ask to resume housebuilding role

Millions of working people will no longer be able to afford somewhere decent to live by 2024 and will need access to some type of affordable housing, new research published by the Local Government Association warns.

The LGA, which represents more than 370 councils in England and Wales, is calling on new ministers to take urgent steps so councils can resume their historic role as a major builder of new homes and help tackle the nation’s deepening housing crisis.

It warns the economic uncertainty caused by Brexit and a widespread and growing demand for affordable homes – including for social and affordable rent – makes it even more important for councils to be handed greater powers to build new homes.

Analysis from the Learning and Work Institute for the LGA projects that:

  • A minimum of 3.98 million people of working age will still need access to affordable housing options by 2024 even if the country is able to achieve full employment by upskilling 3.5 million people to take higher paid jobs the economy has been projected to create.
  • Around 5.4 million people of working age will need access to affordable housing by 2024 if qualification levels do not increase. Overall demand will be higher should the economy not create the jobs projected.
  • The likely demand of affordable homes for working age people will range from 2.25 million to 3.07 million, compared with 2.87 million in 2011. Overall demand will be much greater when taking into account those not working, such as pensioners.

Affordable is defined as someone who has to spend 30 per cent or more of their household income on their housing costs. To spark a revitalisation of council house building, the LGA is calling on government to allow councils to:

  • Borrow to invest in housing in the same way that they are able to borrow to invest in other projects;
  • Keep 100 per cent of the receipts from properties sold through Right to Buy to build new homes;
  • Combine Right to Buy receipts with other funding, to use receipts to build through housing companies, and to count the value of council land in building replacements.

The LGA is also urging government to work with councils to review how different elements of the Housing and Planning Act should now be implemented in light of the economic uncertainty created by the UK’s decision to leave the European Union.

Cllr Peter Box, LGA Housing spokesman, said, “More and more families will be affected by our housing crisis every year. As our analysis shows, millions of people studying hard and succeeding in work will also no longer be able to find an affordable and decent place to live.

“Bold new action is needed to solve our housing crisis following the vote to leave the European Union. A renaissance in house building by councils must be at the heart of this.

“The private sector clearly has an important role to play but the reality is that it cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead.”

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