A simple trade-off to suit everybody
While it is promising to see that the cuts to the Homes and Communities Agency are not as severe as first expected, (‘CLG cuts £220 million to fill funding “black hole”’, insidehousing.co.uk, 5 July), I feel that our expectations may have been somewhat managed, so that we now feel that a funding cut of £220 million is more agreeable.
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However, this is still a substantial amount and added to rumours that shared ownership (historically cross-funded by affordable rented units) may not now receive grants, the industry still faces the significant challenge of lost value. This means developers which factored into their appraisals a contribution from section 106 housing will now, when added to reduced sales values, be left with schemes that are no longer viable.
Land owners will similarly be looking at substantial reductions as residual land values drop. But it may be possible that the government’s new planning idea of financially compensating neighbours for loss of amenity caused by new development does offer a potential solution.
If a local authority grants planning permission for new housing on land which historically wouldn’t have had a chance of securing approval (and, therefore, has a very low value), the landowner could be paid a proportion (say 10 per cent) of the residential value. The local community could also be paid a proportion (say 5 per cent) for the loss of green fields at the edge of their village and house builders could then deliver the new homes across all tenures, stimulating a sector devastated by the recession.
In addition to this, the council could retain 125 per cent of the council tax from each new property, and the government could take a significant proportion (say 25 per cent) of the enhanced uplift in the value of land. This way would meet its - our - housing supply needs at zero cost. Everyone’s a winner.
Tim Young, chair, John Rowan & Partners