24 COMMENT
expert made headlines when she ‘crossed the house.’ In her statement, she said: “On housing, Rishi Sunak’s Government is now failing to build the homes we need. Last year saw the largest fall of new housing starts in England in a single year since the credit crunch. The manifesto committed to 300,000 homes next year – but only around half that number are now set to be built.”
A BUILDING RENAISSANCE
Councils across England are represented by the Local Government Association (LGA). Responding to the Levelling Up, Housing and Communities (LUHC) Committee’s report ‘The Finances and Sustainability of the Social Housing Sector,’ councillor Darren Rodwell, Housing spokesperson for the LGA said: “The LGA has set out a six-point plan to spark a council house building renaissance, which must include urgent reform to the Right to Buy. “Long-term certainty on powers and funding could help councils deliver an ambitious build programme of 100,000 high-quality, climate-friendly social homes a year.” The LGA is calling for the Government to go further and faster in order that councils can properly resume their historic role as a major builder of affordable homes, by implementing a six-point plan for social housing.
The six points in the LGA’s plan are:
• oll out fi ve-year local housing deals to all areas of the country that want them by 2025 – combining funding from multiple national housing programmes into a single pot. This will provide the funding, fl exibility, certainty and confi dence to stimulate housing supply, and will remove national restrictions which stymie innovation and delivery;
• Government support for a new national council housebuilding delivery taskforce, bringing together a team of experts to provide additional capacity and improvement support for housing delivery teams within councils and their partners;
• Continued access to preferential borrowing rates through the Public orks Loans Board (PLB, introduced in the Spring Budget, to support the delivery of social housing and local authorities borrowing for Housing Revenue Accounts;
• Further reform to Right to Buy which includes allowing councils to retain 100% of receipts on a permanent basis fl exibility to combine ight to Buy receipts with other government grants; the ability to set the size of discounts locally; and the ability to recycle a greater proportion of receipts into building replacement
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equivalent of £400 less to invest per social rented home, per year.
Andy Hulme, chief executive of Hyde Group, said: “The evidence is clear, scrapping rent convergence has sucked resources away from social housing providers being able to invest in customers’ homes. This move will mean G15 members alone will have more than £2bn less to invest over a decade, and this is equivalent to losing almost a quarter of the money we invest in each social home every year.”
homes paying off housing debt;
• Review and increase where needed the grant levels per home through the ffordable omes Programme, as infl ationary pressures have caused the cost of building new homes to rise, leaving councils needing grant funding to fund a larger proportion of a new build homes than before;
• Certainty on future rents, to enable councils to invest; Government must commit to a minimum 10-year rent deal for council landlords to allow a longer period of annual rent increases and long-term certainty.
RENT LEVELS A KEY FACTOR
The importance of rent levels and policies which control the rents which councils and housing associations can charge has been clearly demonstrated by research undertaken by a group of the largest HAs operating in London. They found that differences in rent levels for similar properties are costing HAs in the capital more than £2bn a year with more than half of their social rented homes being at risk of becoming unsustainable to manage due to the Government scrapping its rent convergence policy. Historically, the level of social housing rent paid to councils and housing associations has varied depending on when and where their home was built. To counter this, from 2002, the Government allowed cheaper rents to increase by the etail Prices Index (PI 0.5 and a maximum of an additional £2 per week, every year; but this policy was scrapped in 2015. Analysis of rents by Hyde for the G15 group consisting of London’s largest housing associations shows more than half (57%) of social homes managed by London’s largest landlords have now diverged away from the higher ‘formula rent’. This has cost the G15 members £211.4m a year, meaning they have an
Hulme added that the losses come at a time landlords are investing record sums to address building safety and damp and mould issues. He said: “With more than half of homes not meeting the formula rent, in the long-run they become unsustainable for social housing charities to continue providing. We simply have to avoid this happening.”
The G15’s analysis also showed the ending of convergence has led to “unfairness and tension” about unequal rents, with some social housing residents “being charged more than 30% less than a fellow resident to live in a home of a very similar standard.” The G15 has also calculated that large London housing associations have lost .bn as a result of the overnments 201/2020 1 annual rent reduction and last year’s 7% rent cap.
London ayor Sadiq han has repeated his call for the Government to inject £2.2 billion in emergency funding into affordable housebuilding and criticised ministers for failing to take action to kickstart “a stalling market”. He warned that a failure to boost funding was exacerbating “a national housebuilding downturn” and that extra funding was needed to keep housebuilders on site in London and across the country. The latest reater London uthority fi gures show that between pril 2023 and arch 202, building started on just 2,358 grant- funded affordable homes in the capital, down from 25,5 in the previous year. It is increasingly clear that the Government is being provided with lots of evidence and advice on what it needs to do to tackle a housing sector stuck in the doldrums battling to solve huge and costly problems, with homeless households and unsuitably housed people paying a very high price as a consequence. There are only weeks until the General Election. Hopefully an incoming Government will be minded to accept the LGA’s six point plan, and will take the step to investing in the building of 100,000 new social rent homes a year. This will not only give a welcome boost to the construction sector, it will also fi nally provide decent home to people who are currently stuck on council waiting lists.
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