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Affordable Housing Commission pushes government to set up Housing Conversion Fund
A ‘Housing Conversion Fund’ should be set up to allow social landlords to buy unsold homes and other properties as part of a wider 12-point plan to support the recovery from the coronavirus crisis, the Affordable Housing Commission (AHC) has said.
The commission – which is made up of housing association chief executives and other leading housing figures – outlined the 12-point social housing-led recovery plan, which includes a fund that will allow social landlords to buy up unsold homes.
It is the latest group to call for funding to convert unsold homes to affordable properties after similar suggestions made by MPs in March. Inside Housing revealed in May that the Greater London Authority was also in discussions with developers over buying up their unsold homes for conversion.
The AHC pointed to the government’s Rough Sleeping Initiative, which has helped social landlords buy and refurbish one-bed properties including units in hotels and unsold shared ownership and market sale properties to house rough sleepers.
“Using this model, a new ‘Housing Conversion Fund’ – with conversion grants and guarantees – could be quickly established and opened to a range of housing organisations, including community-based organisations,” the report said.
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The commission, chaired by Lord Richard Best, also called for a scrap of the affordable rent model. The AHC said that the tenure is “mostly unaffordable for lower-paid workers not receiving housing benefit”.
The model, which allows social landlords to offer tenancies at rates of up to 80% of market rent levels, now covers about a quarter of new general lettings, the AHC noted. It suggested that transitional funding should be made available to return these lettings to social rent or intermediate rent when tenancies end.
The AHC also called on the government to adjust its First Homes scheme, which offers first-time buyers a 30% discount and is set to run alongside the Affordable Homes Programme.
Current plans say that discounts will be funded by Section 106 contributions, but the AHC said it is “concerned that the scheme would significantly displace the supply of social and affordable housing”.
Instead, local authorities should be given discretion to decide local policies ensuring that First Homes are additional to, not replacements for, social and affordable homes for rent.
The commission also called for local authorities to be given control of permitted development rights, which were recently expanded by the government, to ensure proper housing standards are met.
Prime minister Boris Johnson has come under much criticism from the sector over his decision to overhaul the planning system by making it easier to demolish and rebuild residential commercial buildings if they are rebuilt as homes and allowing the possibility of a wider range of commercial buildings being converted into places to live.
Many senior housing sector figures and industry groups have said that the changes will lead to a reduction in affordable homes and a drop in quality.
Lord Best said: “A recovery plan, with a focus on social rented and affordable housing, will encourage jobs and growth and rebalance the housing system so it is fit for purpose post COVID-19.
“As people face reduced incomes and potential unemployment the need for truly affordable social rented homes becomes even greater.
“With a weaker housing market and millions of renters under housing stress this is the moment for the social housing sector to step in, maintain the impetus for the construction industry and pick up the opportunities for growth.”
The Affordable Housing Commission’s 12-point plan
- Increase investment in a scaled-up and fast-tracked social and affordable housing programme, with grant rates returning at least to 2010 levels
- Establish a new ‘Housing Conversion Fund’ to help social landlords and community organisations to acquire developers’ unsold homes, and to buy rented properties from over-stretched buy-to-let landlords, and down-at-heel PRS properties and empty homes
- Reform the land market, based on recommendations from the Letwin Review, to get homes built out faster and to ‘capture’ land value for social benefit
- Enable councils to take back control over permitted development rights
- Replace the unaffordable ‘affordable rent’ model with more social renting (based on rents at a third of household net incomes of the intended occupiers)
- Make discounted ‘First Homes’ additional to, not replacements for, planning gain obligations for affordable renting – thereby preventing a reduction in the most urgently needed homes
- Reform and extend Help to Buy to existing properties, targeted at helping lower-income first-time buyers
- Give councils full discretion over Right to Buy discount levels and the opportunity to recycle 100% of sales proceeds into new social rented homes
- Strengthen the safety net for renters who struggle with housing costs, including reviewing eviction protection, sustaining changes to Local Housing Allowances and reforming Universal Credit
- Cap annual rent increases in the PRS to an index of income growth for a fixed period (as proposed in Scotland), alongside ending Section 21 ‘no-fault’ evictions
- Protect homeowners by reducing delays before payment of support for mortgage interest (SMI) and making the SMI a grant, not a loan
- Set a target to provide affordable housing opportunities for all by 2045, based on a new definition of affordability that relates to incomes, not market prices
