Saturday, 23 May 2015

Party leaders haggle over housing policy

Conservative and Liberal Democrats ministers are locked in negotiations over a series of measures that will dictate the future of the housing sector ahead of next week’s Budget.

Prime minister David Cameron and chancellor George Osborne are understood to be pushing to boost the reinvigorated right to buy policy in London as part of a package of housing announcements intended to kick-start the ailing economy.

They want to increase discounts available to social tenants that want to buy their homes in London from £75,000 to £100,000, in order to increase affordability and take up. It would be the second big increase in a year-and-a-half.

However, senior Liberal Democrats are holding out from supporting the policy unless the government finds more money for affordable housing.

A Lib Dem source close to the negotiations said ‘if [Tory ministers] want their right to buy through, then we want our affordable housing through’.

Another proposal up for negotiation is a bid by communities secretary Eric Pickles for a second affordable rent programme after 2015, in which housing associations would continue to receive grant funding in exchange for them charging rents at up to 80 per cent of market rates.

Whether or not it appears in the Budget on Wednesday will depend on the outcome of talks over the government’s policy on rent increases for social landlords beyond 2015.

Housing bodies including the Chartered Institute of Housing and the National Housing Federation have been calling for clarity on the future of rents so landlords can calculate their future income.

Sources suggested the current formula of inflation plus 0.5 per cent and up to £2, which many landlords thought would change, could be extended - but negotiations over the duration and level of uplift will continue over the weekend.

The Lib Dems are using the bargaining to push for their ‘number one ask’ for local authority debt caps, introduced as part of self-financing reforms last April, to be lifted so that councils can build up to 60,000 homes.

This move is opposed by Mr Osborne because it would lead to increased public borrowing.

Gavin Smart, director of policy and practice at the CIH, said certainty over rents would help people plan.

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