industry news
Scottish housing bill promised
Legislation which will help support the delivery of 50,000 new affordable homes is to be introduced by the Scottish Government. By ensuring housing associations (HAs) can be classified as private bodies, the bill will ensure that HAs can borrow money privately in addition to the Scottish Government’s committed investment of £3bn in affordable housing. The announcement follows the decision
by the Office for National Statistics (ONS) to classify HAs as public bodies in the national accounts. The ONS came to this decision in light of a number of powers that the Scottish Housing Regulator can exercise over HAs. The ONS came to the same decision in regard to England’s HAs last year and similar legislation was introduced at Westminster.
“By ensuring housing associations can be classified as private bodies, the Bill will ensure that HAs can borrow money privately in addition to the Scottish Government’s committed investment”
Commenting on this decision, Housing Minister Kevin Stewart said: “The First Minister made clear in the Programme for Government that we are committed to HAs remaining classified as private bodies in the national accounts. In light of the announcement by the ONS, the Government will bring forward a Bill to adjust the powers of the Scottish Housing Regulator. This will allow the ONS to reclassify HAs to the private sector.
Reclassification
“Reclassifying HAs to the private sector is important as it will ensure their borrowing continues to be treated as private borrowing, which can be used to augment the £3bn of public investment that the Government is providing to support the delivery of 50,000 new affordable homes in the next five years. “I am pleased that the Scottish
Government has reached an agreement with the HM Treasury that will allow progress in delivering this programme to continue whilst the position on classification is being resolved.” The Scottish Government has discussed its plans to legislate with the Regulator, and bodies representing HAs, their tenants and lenders, and confirmed that it would continue discussions with them during the development of the new law.
UK faces critical shortage of homes to rent, says RICS
T
he UK is facing a “critical rental shortage” which requires a building programme to focus on providing
nearly two million new homes for tenants. This stark warning has come from the Royal
Institute of Chartered Surveyors (RICS), a body not normally associated with making exaggerated claims. But the surveyors have claimed the Government’s current housebuilding targets are insufficient. Instead they claim at least 1.8 million more households will be looking to rent rather than buy a home by 2025. Among their solutions to the current housing crisis, RICS have called on the Government to offer tax breaks to encourage building and greater investment in the construction sector. Although the Conservative Party appears to
be softening its exclusive focus on home ownership and building new homes for sale, the surveyors say that specific measures need to be taken to encourage social and private landlords to build more homes for rent.
Stamp duty
The private rented housing sector has grown significantly since the year 2000 and numbers of privately rented homes have risen to over 5.5 million homes, overtaking the number of properties owned and let by councils and housing associations. The previous Chancellor of the Exchequer
raised stamp duty on buy-to-let purchases earlier this year in a direct move to discourage private landlords from competing with first time buyers. Tax changes to reduce what landlords can claim in operating costs are due to be implemented next year. A survey of landlords by RICS found that 86
per cent had no plans to add to their property portfolios this year. RICS recommend reversing the stamp duty
increase and have also called for a number of measures to boost investment. These include: • Private house builders encouraged to build
8 | HMM November 2016 |
www.housingmmonline.co.uk specifically for the rental sector;
• Pension funds given tax breaks to fund large scale rental properties;
• Councils encouraged to release brownfield sites for building new homes for renting to tenants.
Construction
Speaking at the Conservative Party conference Communities Secretary Sajid Javid said the Government would take “unprecedented steps” to encourage construction of homes for people to buy. He told delegates tackling the housing shortage would be his “number one priority". He said: “Far too many young people cannot
get a foot on the housing ladder. Many are being forced to live back with mum and dad as rents soar faster than wages." The Chancellor Philip Hammond and
Communities Secretary Sajid Javid, have announced new measures to build more houses, including the launch of a £3bn Home Building Fund. This will provide £1bn of short term loan funding – to be used by small and medium builders, custom builders, and innovators, delivering 25,000 homes in the short term; and £2bn of long term funding for infrastructure - to be used to unlock a pipeline of up to 200,000 homes over the longer term. Jeremy Blackburn, RICS head of policy
said: “The private rented sector became a scapegoat under the previous Prime Minister, and because of that it suffered. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. “We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.”
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