Finance report fuels right to buy concerns
A report from a cross-party group of MPs has raised doubts over the viability of the coalition’s reinvigorated right to buy programme.
Responding to the report on financing new housing supply published by the communities and local government select committee this week, the Local Government Association has said that the MPs were ‘right to identify problems’ with the model and has called for it to be renewed.
Clyde Loakes, vice chair of the LGA’s environment and housing board, said that the report echoed concerns that the increased discounts that government has made available to council tenants could prevent local authorities from delivering the promised one-for-one replacements on a local basis.
‘Doubts have been raised about the viability of every area replacing one house sold under right to buy with another, and this cross-party report adds weight to that argument,’ said Mr Loakes. ‘The LGA will continue to press the government for a review of the right to buy policy after one year.’
‘As the findings of this report demonstrate there are real concerns that the Tory-led government is presiding over the slow death of social and affordable homes.’
Shadow housing minister Jack Dromey
The LGA further supported the committee’s call for the government to lift borrowing caps imposed on councils following self-financing reforms.
‘Council bosses are urging the government to give them more freedom to deliver the new housing which is so desperately needed,’ said Mr Loakes.
Meanwhile, the Labour Party has claimed the report has underlined the growing housing crisis in the UK.
‘It is critical that housing is put centre stage as Labour has argued,’ said shadow housing minister Jack Dromey. ‘We therefore welcome the committee’s proposals, including increased investment from institutional lenders and pension funds, and proposals such as a housing investment bank to unify public and private funding.’
Mr Dromey also cited criticisms MPs made of the government’s £1.8 billion affordable homes programme.
He said: ‘As the findings of this report demonstrate there are real concerns that the Tory-led government is presiding over the slow death of social and affordable homes. On (housing minister) Grant Shapps’ watch we saw the biggest collapse in affordable house building in history and now this report has confirmed that the government’s so called affordable rent model will be unaffordable to many and is not sustainable post-2015.’
Responding to the report, Mr Shapps said he welcomed its findings and would consider its recommendations.
‘Top down, regional targets pitted neighbours against developers and contributed to the lowest level of house building since the 1920s so we’ve taken a range of measures to put power back into the hands of councils and communities,’ he said.
‘Our housing strategy is at the heart of our plans to get Britain building again, with £1.32 billion to get new homes built and stalled developments back on track, a range of help and support to help double the size of the self-build industry in this country, and the innovative newbuy guarantee which gives thousands the opportunity to buy a home with a fraction of the deposit they currently require.’
The committee’s wide-ranging report has been broadly welcomed across the housing sector.
The British Property Federation said that the report supported some of its own previous recommendations.
‘We welcome the findings of the report and particularly the support for several of our proposals,’ said Ian Fletcher, director of policy at the BPF. ‘With current finance models struggling, we must look at the broadest range of options for funding the UK’s housing supply and institutions and REITs [real estate investment trusts], as well as smaller investors, can all play a part.
‘The select committee correctly highlights that whilst there is no silver bullet, we need to encourage and support a broad range of different investors in housing supply if we are to meet the nation’s housing needs.’