Economic Affairs Committee say's home building target not tough enough

Friday 29 July 2016

The cross-party Economic Affairs Committee released their report 'Building More Homes' on 15 July and has said that the Government's target for building new homes in not nearly tough enough to make a dent in the housing supply issues this country faces.

The report comes at a sensitive time for politics as the media clambers over themselves to broadcast their latest insights into the uncertainty in the housing sector following Brexit. 

The committee propose an ambitious target for the Government to increase it's current commitment by 50%, meaning they'd need to build 300,000 new homes each year - a tall order given the skills shortages and lack of urgency in freeing up public land for building.

The committee also criticised the the Government for restricting local authorities access to funding, which has led to frustration among councils and a lack of social house building. This is compounded by the fact that interest rates are at an historic low meaning there has never been a better time for borrowing to invest in homes for the next generation. 

Lord Hollick, Chairman of the Committee said "...The private sector alone cannot deliver that [300,000 target].  It has neither the ability nor motivation to do so.  We need local government and housing associations to get back into the business of building."

The committee also accused the Government of neglecting the growing number of people who are either forced to or choose to rent, arguing that "It is very concerning that changes to stamp duty for landlords and cuts to social rent could reduce the availability of homes for rent."   

Other key recommendations include:

  • Power to levy council tax on homebuilders and hoarders of permissioned land who don't complete new homes within a set time period. 

  • The Government should step up their efforts to release public land for house building by appointing a Senior Cabinet Minister who would be responsible for ensuring that levels are increased, especially for low cost homes.

  • Give local authorities the power to increase planning fees to help fund a more efficient planning system.

Mark Hayward, Managing Director of NAEA Said: “Politicians can set as many targets as they like but unless we look at the reasons why not enough houses are being built things will not improve. The Brexit vote seems to have focussed minds on how we now do this as the economy, businesses and individuals adjust to life outside the EU.

Incentivising land to be built on which already has planning permission and greater use of public sector land are sensible proposals from the House of Lords Economic Affairs Committee. We know from National Audit Office’s report last month that more action is needed on the disposal of public sector land for new homes. Currently only 5% of land set out in DCLG’s programme has been disposed of."

“We need houses of all types and at a price which people can afford. The Government and local authorities must also ensure that we have the workers, long-term land supply, local buy-in and sensible and sustainable development to reach whatever targets are set. Policies can’t be looked at in isolation and the Government must have more joined up thinking.”