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Plans unveiled for local councils to provide extra half-million homes

Local councils could provide up to half a million extra homes by the end of the decade according to plans recently unveiled by the Local Government Association. The LGA represents more than 370 councils in England and Wales has come up with its own proposals to help tackle the housing crisis.

These plans are worth consideration. But should not local councils already be doing much more to get new homes built by relaxing tight planning restrictions?

Few will question the need for more homes. Government figures show that 221, 000 new homes are needed every year. Yet based on last year’s figures, only half that number are being built.

If growth continued at the same rate the total shortage of homes in ten years would amount to over a million – a figure which the LGA says would be the number required to house the population of Birmingham, Britain’s second biggest city.

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Blueprint to reform current house building

Making his inaugural speech as the new LGA Chair at its recent annual conference, Cllr David Sparks set out “a blueprint to reform current house building” including such measures as :

  • government incentive schemes to encourage private developers to speed up housing delivery;
  • the creation of council-led local land trusts;
  • the complete scrapping of the housing borrowing cap;
  • an overhaul of the government’s Right to Buy scheme.

Cllr Sparks said: “The current housing crisis is nothing short of a national scandal which is going to get worse without radical action. There is an emerging nightmare looming just down the street.

The London housing bubble is not just a London issue it’s a national problem being felt in urban and rural areas in every region.

The shortage of houses in this country is a top priority for people, but buying a house is increasingly out of reach for many. Over the last two Parliaments, the number of people under 45 who can afford their own home has fallen by a fifth.

Our plans would see half a million new homes built, transforming the lives of hundreds of thousands of families. Councils have set a precedent in the past and shown they can deliver housing on a large scale. It’s time the next government learned from the past to build for the future. ”

Local councils’ role in building new homes

Members of the LGA clearly think that local councils can do much more to deliver new housing.

In the past councils were responsible for providing a large volume of public-sector housing. But since the days of Mrs Thatcher all governments have encouraged the private sector and local council housing has had to take a back seat.

The Right to Buy legislation has seen millions of former council-owned homes being sold to tenants, while many of the remaining council homes have been transferred to Housing Associations. At the same time central government has capped borrowing and spending which has reduced the ability of councils to build more homes themselves.

The LGA plans are very much aimed at a new government coming into power in 2015. It certainly looks as if they are hoping that such a government will be more amenable to public sector involvement in the housing market.

But whatever the colour of a new government some of the LGA’s proposals are surely worth consideration.

Incentive schemes to encourage private developers and Local Land Trusts

For instance they are calling for an incentives scheme to encourage private developers to speed up the delivery of housing which already has planning permission.  At any one time there are thousands of homes which have been given planning consent but remain unbuilt because developers are arranging finance or face problems with provision of infrastructure.

The LGA proposes that incentives should be given to developers to enable them to reduce up-front costs and risks. Developers should also be able to get guarantees and phase payments for infrastructure.

In 2013 it was estimated that 60, 000 homes were on hold or classified as ‘shelved’ so anything which can be done to get these homes actually built will help.

The LGA also proposes that council-led local land trusts should be created with powers to pool surplus central and local government land for housing and make decisions about its disposal.

Such trusts would operate on a ‘build now, pay later’ model to support large sites to come forward with necessary infrastructure and affordable housing, a model which could also be applied to private sector landowners. The LGA thinks that this would enable 140, 000 homes to be built over the next Parliament.

The present government has already taken various steps to encourage identification and disposal of surplus land owned by central and local government. The LGA’s proposal is for more pro-active trusts which would be involved with the actual development of such land and encourage developers to build more homes.

Council planners one of the reasons more new homes are not being built

While the LGA’s initiative is welcome many will say that a large part of the problem lies with local authority planning departments. It is they who are largely responsible for deciding what land can be developed for housing and deciding whether or not planning permissions are granted.

If council planners are not prepared to zone more land for housing then developers will continue to face a land shortage.

Councils could also help promote the development of smaller sites especially for people interested in building their own homes. Conversion of larger houses and commercial buildings into flats should also be encouraged.

Even when a planning permission has been granted it will invariably be subject to numerous conditions which will have to be satisfied before homes can be sold. These can present a major headache for developers.

For instance the council may insist upon approving minor details such as the type of facing brick to be used. Much time can be wasted dealing with such conditions before building can start.

Planners should not just add large numbers of standard-form conditions to each planning consent but consider carefully what is actually relevant for any particular development.

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