Building blocks

The shortage of affordable homes, whether to buy or to rent, is becoming a national crisis. The government is making fundamental changes to the planning system with its stated purpose of building more homes in the future than were being built before the recession.

The government’s housing target, therefore, is to build in excess of 235,000 homes per year. In order to achieve this, it has abolished the main mechanism of the previous government which, in the regional spacial strategy, set down local targets for the numbers of houses to be built disaggregated down to individual targets for each council.

In future, individual authorities will not have to look to regional targets but will have to come to their own assessment of need. The crucial thing here will be the extent to which those local needs assessments are genuine, robust and compatible with other authorities.

If the government allows local political pressures to reduce the number of homes which a council decides it is prepared to approve then we could have a situation where the sum total of all individual commitments by local authorities will not add up to the national figure which ministers want to achieve.

The government is, therefore, banking on financial incentives to encourage local authorities to build sufficient homes through the new homes bonus, a council tax matching scheme which will reward town halls that develop.

Unfortunately, there is no international evidence to indicate whether such incentives will work, nor any scientific research in this country.

Many believe that the new homes bonus will not be sufficient to persuade authorities which do not really want to build houses to do so and will simply hand money over to those authorities that would have built anyway. If the new homes bonus does not deliver the national target, the government does not appear to have a plan B.

While obviously at present the level of house building is seriously affected by falling real personal incomes and concerns on mortgage supply, if these factors eventually improve then the severe reduction in planning permissions which the National Housing Federation and the Home Builders Federation have already identified will significantly reduce the supply of homes in the medium term.

And this could lead to a further upward spike in prices as well as all the personal problems of families without proper accommodation.

Clive Betts is Labour MP for Sheffield South East and chair of the Communities and Local Government department select committee