The
House Builders Association (HBA) – the house building division of the National Federation of Builders
(NFB) – has welcomed extra funding for new council houses, but it doubts that
it will have a significant impact in solving the housing crisis.
During her speech at
Conservative Party Conference, Theresa May announced that the Government will
spend an additional £2 billion to create “a new generation of council houses to
help fix our broken housing market.”
While
more funding for house building will certainly help, the HBA maintains that the Government needs to
do more in order to enable local authorities to significantly tackle the issue
of housing affordability across the country.
For instance,
removing the borrowing cap on local planning authorities would go a long way
towards stimulating councils to build more homes.
Rico
Wojtulewicz, policy advisor for the HBA, said: “More money for new council homes is good, but the Government is
only scratching the surface of the problem.
"Removing the borrowing cap on local authorities would certainly
enable them to invest more in their local communities, but only radical
planning reform will allow us to tackle the current housing crisis.
“The current
planning process remains a considerable barrier to many SME house builders and
developers and we can only assume Councils will fall foul of the same barriers.
"Overhauling the planning system is vital to building more homes and
ultimately solving the housing crisis.”
Government has
confirmed plans for a new generation of council and housing association homes.
Funding for affordable homes will be increased by a further £2 billion to more
than £9 billion.
The numbers of homes
will be determined on type and location of housing, and bids received for
funding. With a typical £80,000 subsidy, this £2 billion investment can supply
around 25,000 more homes at rents affordable for local people.
Ministers also
confirmed plans to create a stable financial environment by setting a long term
rent deal for councils and housing associations in England from 2020.
The funding will
further support councils and housing associations in areas of acute
affordability pressure, and where working families are struggling with the
costs of rent and some are at risk of homelessness.
This
complements recent announcements on supporting tenants in the private rented
sector and on extending Help to Buy.
The government’s
Affordable Homes Programme will increase from £7.1 billion of public funding to
£9.1 billion, and the £2 billion additional funding for affordable housing
could lever in total investment by housing associations and councils of up to
£5 billion.
Since April 2010,
around 333,000 affordable homes have been delivered, including 240,000 for
rent. More than twice as much council housing has been built since 2010 than in
the previous 13 years.
As
set out in the Housing White Paper, to help encourage
more investment in social housing, government will create a stable financial
environment by setting a long term rent deal for councils and housing
associations in England.
Under the proposal
set out today, increases to social housing rents will be limited to the
Consumer Price Index (CPI) plus 1% for 5 years from 2020. This will give social
tenants, councils and housing associations the security and certainty they
need.
Previously, the
government’s affordable housing policy primarily supported ‘affordable rent’ –
rents of up to 80% of local market level – and low-cost home ownership. This
announcement now extends support for ‘social rent’ – which are lower rents, set
according to national guidelines.
