Transcript Housing
Building Homes & Meeting Demand New Economy Breakfast Briefing Anna Turley IPPR North Housing Demand • Expect 3.3m - 4.5m additional households to be formed in England by 2025 as a result of population growth, demographic change and behavioural factors • All other things being equal, England then faces a shortfall of 750,000 homes by 2025 – the equivalent of the entire housing demand of Birmingham, Liverpool and Newcastle combined • Worst mismatches between supply and demand in the Greater South East and Yorkshire and Humberside Shortfall means: – Home ownership out of reach for millions – Increased numbers pushed into PRS so rent there rises with demand – 86% increase in working people reliant on housing benefit to pay rent in last 3 years – Particular pressure on social housing (8% of all English households are currently on a housing register and homelessness has risen by 26% over last 2 years) JSA Caseload Housing Benefit Expenditure Proportion of Population receiving cash allowances for rental costs 2009 % 20 18 16 14 12 10 8 6 4 2 0 Svn Ita Esp Lux Aus Cze Est Svk Pol Usa Isl Aut Nor Hun Isr Dnk Fin Deu Nld Nzl Gbr Housing Supply • Need to build c250,000 (of the right) new homes each year, but for past 20 years we have built only 160,000pa, and last year we built 106,000 (the lowest level since WWII) • Major barrier is finance - who is going to pay for new homes? – Government should pay for new homes, investing to save, but this Government won’t – Institutional investment (works in other countries) • Tackle land banking and release (public and private) • Planning: localism but ‘not in my back yard’ Supply and demand in the regions Solutions I New Sources of Finance – National Investment Bank – Local authority pension funds (worth over £150 billion nationally) – Adopting fiscal rules and accounting practices based on general government rather than public sector debt to allow councils to leverage assets and income – Gov to allocate £750m more to housing capital expenditure in next SR Solutions II Planning - Reclassifying land, higher planning fees (for accelerated process), council partnerships levying a land tax on all undeveloped but developable land New Wave of New Towns - Reform and revitalise this approach for 21st century Regulating mortgage market - Capping loan-to-value mortgages Making better use of existing supply - Removing council tax discount on long term empty properties - Uprating the relief on income tax on renting out a spare room - Encouraging empty dwelling management orders Solutions III The Affordable Housing Grant Central government could allocate a single ‘affordable housing grant’ (AHG) to local authorities for the purposes of enabling local people to live in decent, secure and affordable homes and of developing an integrated housing market that overcomes social, economic and spatial segregation. The Affordable Housing Grant What is it? • 3 year grant of combined capital and rent subsidy allocated for housing. This would combine Housing Benefit/LHA spent in local area, with the complex array of capital grants into one lump sum. • This would devolve spending on Housing Benefit and capital subsidies to communities to invest in their areas. • It would also allow them to borrow against this new revenue stream • Over the longer term this will allow them to shift spending from rent subsidy to capital by making more properties available on the market - this will put downwards pressure on local rents. • It incentivises local authorities to reduce expenditure Conclusions • Action is needed – urgent economic context means we need more houses, building has implications for growth, and climate presents good time to invest • Requires action from all partners – state, private sector and housing associations • National approach not delivering and not flexible enough • Local authorities can address local markets and local needs – principle of subsidiarity • Urgent need to rebalance capital and revenue spend – invest to save