Meeting Housing Need or Lining Developers Pockets?

Posted on: 10th January 2016

Meeting Housing need or lining developers pockets, is my question out of various Government announcements? Announcements on housing are coming so fast from Government, at the moment, that it is hard to keep up. We do have a housing crisis but I suspect that the needs and solutions are different in each area. Government proposals on funding and planning are more about their mission to reduce local council’s powers and transferring funding from the public to private sector than meeting communities housing needs. In Cornwall and probably many other places, just building more and more houses will not necessarily reduce housing waiting lists.

Some facts:

  • It is usually more costly/ risky to build on brown field sites and infill sites due to contamination, sewers and water pipes and other in the ground problems but the public generally prefer these sites to be used.
  • It is cheaper to build housing on green field sites as there are fewer in the ground problems to fix but local people often resist such developments.
  • In the UK, people do aspire to own their own homes but a significant number of people do not now and will never earn enough or have sufficient job security to get a mortgage.
  • People who have to rent, prefer security of tenure and those on lower wages struggle to afford private rents that offer good living standards for their families.
  • In many places in Cornwall (and other holiday areas), 2nd homes and holiday lets drive up house prices and reduce the quantity and quality of private rented accommodation.
  • Over many years, Government policy has reduced social rented housing stock through selling it off, lack of investment in current stock and lack of building/ investment in new socially rented homes.
  • Grant is moving away from subsidising the public/ chartable sectors in providing affordable homes, instead they are being encouraged to subsidise social rented, shared ownership and below market price homes with some open market homes. Impact is likely to be more and more homes but a lower % meeting local housing needs. So, housing associations are being pushed towards being more like commercial developers, building open market housing for profit to invest in more social purposes.

So, what is the current Tory Government proposing? Since May, we have had announcement after announcement but so far, I have not heard anything that will contribute very much to meeting the housing needs of people in my St Just ward or Cornwall as a whole. Announcements and proposals include:

  • Selling off of not only Council owned homes but also Housing Association homes. Whilst there is an expressed commitment to building replacements, local housing associations and community land trust tell me the figures do not stack up and other Government announcements suggest that replacements built will not be housing for social rents but more likely other higher rented, shared ownership or starter home products.
  • Starter homes, targeted at first time buyers are to be largely built through private developers with the possibility of tax payers money being given to them direct, in the form of grants. These will be sold at 80% of market value but after 5 years the owner will be able to profit from their experience of getting on the housing ladder by selling the home at market value. Good way to produce a few more Tory voters, one would imagine! Also, looks like people buying them will not have to have any connection to Cornwall so open to abuse from the start.
  • Government contracting directly with small and medium-sized builders (undefined) on publicly owned but disused land.
  • The Government is investigating creating “designated persons” to process planning applications, stating that it would give applicants the choice of going to the local authority or the designated person. Detail is thin on this but I would suggest that a developer will go to who he thinks will support his case for more homes with least conditions. The announcement says decisions would remain with local councils.
  • Demolishing poor quality social housing estates (sounds good) but I suspect the new homes built on the site will not be social rented and given we have a housing shortage, where will all the people living in the homes go?
  • Rent caps for council and housing association housing. Again, this sounds good but it is much more about reducing the welfare bill than it is about being good for tenants because many tenants prefer a modest rise, if the money is used to improve their living conditions. Again, it is reducing the number of homes housing associations can build as this affects their income. Note this is not being applied to private rented sector!
  • Moving people in council or housing association homes to market level rents once their income reaches a certain level. Whilst I warm slightly to this, as I know there is a huge and growing need for social rented homes locally, there will be many practical problems with implementation. Families will be at risk of having a huge rent increase after a small pay increase taking them over a pre-determined income threshold. My other worry is, does the policy work the other way? So, a family is moved up to market rent but a youngster leaves home, taking their income out of the household budget or the couple split. There is no mention of re-assessment to return to affordable or social rent.

Anyone thinking I might have it wrong or might be scaremongering The Guardian report refers to the ‘death knell of social housing’ if this Bill goes through.