Monday, 01 September 2014

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.

Readers' comments (49)

  • Do any of them have a clue? It sure looks like they don't!

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  • We all understand the need trim down balanced with the need for growth. Brian Green has a long-running column that proposes a very interesting idea on how to achieve this and create a revolution in housebuilding - Nimby's notwithstanding as always!
    http://brickonomics.building.co.uk/2013/03/construction-continues-to-tank-but-we-need-a-considered-response-not-knee-jerk-policies/

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  • Evan Owen

    Some stability for all concerned would be nice, I used to get angry when NuLab kept changing things just for the sake of change but this lot are even worse.

    How can you have a long term plan for housing when you keep fiddling with FS regulations, standards, benefits, planning... it is a mess and they can't see why.

    Oh I give up.

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  • Chris

    How are they making so much noise whilst being busy doing nothing productive?

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  • Listen - that is the sound of silence. Also known as Ed Miliband and his crew talking on housing policy. And there, in the background you can here the pitter patter of tiny feet as the CiH rushes to kiss Call-me-Dave's boots, all wearing their 'Montague is Magic' teeshirts.

    Harold MacMillan Call-me-Dave, Tax-me-not George and the pointless one with the yellow tie - it's all there in the history books.

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  • After 3 years of doing nothing productive (in any area of government), I think we can safely predict that they won't come up with anything logical or indeed effective in tackling the housing shortage. Roll on the next election!

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  • trouble is leeder where is the alternative thinking coming from cos wherever it is mps's aint listening and definitely aint doing

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  • i think they are idiots, this is what they did years ago gave out the right to buy to council tenants and left us with no council properties. they should be building properties that are equivalent rents to council properties cos even affordable housing is not for people on a low income or on benefits cos the rents are still too high.

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  • So far their plan seems to be to encourage the working people who live in social housing to buy their homes, thereby removing social housing from places like London & the southeast. Then decant the 'undeserving poor', ie those on benefits to the north where there's no work.

    So Bradford, where, I live will have more and more benefits claimants and its economic collapse will be complete.

    Smart move Westminster!

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  • The problem is that housing policy has been based for 30 years on the assumption that all normal people will house themselves by buying a property. No thought was therefore necessary strategically, only detail which could be dealt with as it came up.

    Now this assumption has been exploded, none of the political parties have a clue what to do. There is no coherent policy framework currently on the table, and none of them have even started to think of a way forward. I suspect that ostrich politics are winning - they all hope if they ignore the problem it will go away and everyone will house themselves again.

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