Finance reforms could fund 1 million homes
Reducing the cost of land and the interest rates paid by social landlords could fund one million new homes in the next five years, a think tank has said.
The New Economics Foundation believes it is possible to make large savings on the social housing budget while increasing supply.
To reduce the cost of land, the report suggests setting an 80 per cent capital gains tax rate on all land sales of £80,000 per acre or more, with the revenues going to a land fund to subsidise social housing. In addition to this it is proposed that planning permission for large residential developments would only be given to social housing developers.
The report proposes the introduction of a new bond scheme with interest rates of 3.5 per cent and to tie housing benefit payments more closely to bond yields.
NEF also says higher rents in new developments and a reduction in operating costs by increasing tenant management could increase landlords’ revenue.
The think tank believes the measures in the report would reduce the level of social housing subsidy needed per home, which is currently around £54,000.
Charles Seaford, author of the report, said: ‘With any reforms there will be winners and losers, but with our plans the winners will be vulnerable families and workers in the construction industry and the losers will be the land speculators who have exploited the public planning system for decades.’