Removing the blockers to council house building
In her speech at the Conservative Party conference in October, Prime Minister Theresa May announced the development of a “new generation” of council homes, with £2 billion pledged to fund building projects led by local authorities.
The announcement was well received, with many seeing it as a positive step towards fixing the housing shortage. However, without more radical reform, current restrictions could scupper the chances of any real progress being made by the public sector.
The announcement lacked detail, meaning that at this point it is impossible to gauge how ambitious the Government is prepared to be. The decision to involve councils directly is a smart move, however. In fact, it is essential – the last time 250,000 new homes were built in a single year was in 1978 and then over 40 per cent of these were built by local authorities. Tackling a crisis on this scale clearly requires all hands on deck.
The early indications are that the Government’s proposals won’t be enough to make a significant difference. The funding currently proposed would only be enough to create around 25,000 extra homes by 2021. The UK’s population is set to exceed 70 million before the end of the next decade, according to the Office for National Statistics. Given that there is already a dramatic lack of social and affordable housing, something more drastic will be needed. It isn’t only about funding, though. Current restrictions will need to be relaxed, so as to allow local authorities to borrow and spend their own money more freely on house building. Council’s should be able to retain 100 per cent of the proceeds from Right to Buy sales so that they can be reinvested in more housing. Councils will need more certainty about the level of future rents to help guide their investment plans. They may also need to work collaboratively with housing associations and private sector developers, so as to fill skills gaps in their teams.
It may also be time for a rethink of a number of planning restrictions. For instance, green belt land is highly protected across the board, despite the fact that a significant amount of it is of low environmental value. There is a popular misconception that equates green belt with open countryside, but this is often far from the case. If the plots of land most suitable for development could be released from the green belt, councils could deliver vital new housing for local people in some of the most sustainable areas in the UK.
All of this could help facilitate more council house building – which would make a significant contribution to boosting housing supply.
The Government has made a positive move in calling for councils to once again start building. However, it must now match this with commitment and action. More funding will be needed and restrictions on local authorities’ finances and planning capabilities will need to be relaxed. Council planners will need to be ready. Their support and guidance will be fundamental in getting this “new generation” of council homes very much on the ground.