Industry news

Charity demands 80,000 affordable homes a year to combat poverty

Right to Buy sales fall again

Government figures for the sales of council houses show they have fallen to their lowest level since bigger discounts were made available to tenants in early 2013, but replacement homes are still failing to keep pace. In the second quarter of 2017/18 some 2,558

council homes were sold, representing a fall of 21 per cent on the same period in the previous year when 3,255 homes were sold. This continues the general slowdown in RTB sales in the last 12 months. Sales have particularly dipped in London, where

A leading charity and research organisation has called on the Government to build 80,000 affordable homes a year, in a bid to tackle the growth in poverty that is particularly affecting children and pensioners. The Joseph Rowntree Foundation has found

that 400,000 more children and 300,000 more pensioners are living in poverty compared with the situation in 2012-13. It says these are the first sustained rises in poverty in two decades and are the result of falling incomes due to benefits being cut or frozen, low wage growth and rising inflation. It has called on the Government to reverse its

policies on welfare benefits, to increase support and training for adult workers and to provide far more affordable homes for the ‘just about managing’ families that Theresa May prioritised for help on the day she become Prime Minister. Last year the JRT estimates there were 14m

Britons living in poverty – equivalent to over one in five of the population. Welfare changes made in the 2015 Budget were identified as a specific cause of problems for low-income families, reversing many of the advances made in the previous decades. The cost of housing is a particular problem for

the poorest 20 per cent, with more than 3m people spending more than a third of their income on housing costs. The charity warns this is storing up huge problems as falling rates of homeownership means that in the future more older people will be renting their homes in retirement, rather than having paid off their mortgage. It says to combat this problem the Government

needs to invest in a far more ambitious house- building programme to deliver at least 80,000 genuinely affordable homes each year that are in the reach of low income families. The new homes can be a combination of homes to rent and to buy, but JRT says these should be the chancellor’s priority over cutting stamp duty. Without this sort of intervention, it says

millions of people are being consigned to a life of poverty. Figures for the first half of this year highlight the scale of the problem with just 199 homes for social rent completed and starts made on 294, albeit this is an increase on the 265 started in the first half of the previous year which delivered 1,102 new social rent homes in total. Social rents tend to be set at roughly 50 to 60 per cent of the market rent, whereas affordable rents are generally at 80 per cent of the market rate.

Start of Right to Buy pilot for HAs delayed

The much delayed pilot for introducing the Right to Buy to tenants of housing associations has finally been given the green light to proceed. The scheme will run for just one year, starting

in July and will be limited to HA tenants in the Midlands. This represents a 15 month delay on the expected start date. However, question marks still exist over its funding. The Government has set aside money for the

pilot scheme in the Budget, but in the past it has said that the discounts given to HA tenants will

be funded from the sales proceeds of local authorities who will be forced to sell off their highest value homes, when they become empty. This has long been a contentious issue and it

damaged relations between councils and associations, with the former accusing the latter of working with the Government on vanity projects. There was no mention of this funding mechanism in the budget statement, so it seems likely the Government will fund the cost of the pilot.

local authorities sold an estimated 509 dwellings to tenants - a decrease of 36 per cent from the 800 sold in the same quarter of 2016/17. Total sales in the capital accounted for 20 per cent of the national figure, down 5 per cent from the previous year. Across the whole of England RTB sales are yet

to reach the level they were before the financial crisis with sales in the second quarter at just 55 per cent of those in 2006/07 first quarter (4,655).  But since discounts were increased in 2012/13,

some 60,423 council homes have been sold at discounts of more than £100,000 in London and £75,000 elsewhere. In the same period less than 15,000 new council homes have been provided, while only 744 new homes were started or acquired by councils in the most recent three- month period. Hopes that councils would be put centre stage in

a new focus on building social homes for rent were dashed in the Autumn Budget. Commenting on the recent figures, Martin Tett, housing spokesman for the Local Government Association, said: “Current arrangements are restricting councils from being able to replace homes sold under the Right to Buy scheme.” He urged the Chancellor to use the upcoming local government finance settlement as a way of achieving this. Chartered Institute of Housing deputy chief

executive Gavin Smart said: “The Government has rightly recognised that we need more homes for the lowest social rents – but Right to Buy is undermining efforts to provide genuinely affordable homes for people on lower incomes. We understand the Government is trying to help people achieve their aspiration of home ownership – but if affordable homes for rent are being sold, it’s absolutely crucial that they are replaced.” Both the LGA and the CIH are calling on the

Government to allow councils to keep all of their sale receipts so they can build more affordable homes, rather than being forced to hand over a proportion to the Treasury. The Welsh and Scottish Governments have now

abolished the Right to Buy in their countries, while in England a pilot is to take place in the Summer of extending the Right to Buy to the tenants of HAs in the Midlands. | HMM January 2018 | 19

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