MPs call for 90,000 new social homes per year | Strategic Network news

MPs call for 90,000 new social homes per year

Government needs to invest £10bn more in social housing in order to build 90,000 new social homes per year, a new report from the Housing, Communities and Local Government Committee has found.

The Committee say that "only a significant increase in funding support for local authorities and housing providers, supported by broader reforms to make land more affordable and using all the receipts from Right to Buy, can provide the necessary uplift".

And this significant increase in funding is a sum of £10bn more than current levels, the Committee estimates, but says it could use other techniques to achieve this, such as "reforming land value capture, assembling and using public land for social housing, and redistributing expenditure from existing budgets".

Focusing in on the funding, the Committee say that the cross subsidy model hasn't worked and "will fail" in expanding housebuilding going forward, especially with the added pressure of Covid-19.

The Committee urges the Government to reconsider how it disposes of public land, viewing it as something that can be used for the public good rather than simply a source of revenue.

Land value reform and better utilisation of public land could help reduce the cost of a programme of new building by up to 40%, the Committee says.

MPs say the current system for land is "wrong headed" and shouldn't be sold to those who bid the highest.

Instead, the land must be used to "help solve the housing crisis and not simply a means to raise revenue".

The report adds: "Publicly owned land should be used for social housing, with Homes England taking a central role in identifying suitable land and working with local authorities to ensure it is utilised."

Another suggestion for government is a reform to the Land Compensation Act, in order that councils and development corporations can "compulsorily purchase land at a fairer price".

The report adds that reducing the use of private rented properties to shore up the social housing system would create a significant reduction in the housing benefit bill.

Allowing providers to be flexible in how grant funding is used, for example allowing them to buy homes from developers that may go unsold during a recession, would enable this to happen quickly.

There was also criticism of the Right to Buy receipts, with MPs saying the current system "makes it difficult for social housing providers to fund replacements".

Providers "must be able to replace housing stock that is lost", the report says, yet by receiving only a fraction of an already reduced sale price "this has become impossible".

The Committee is adamant that "the ability to provide for one for one replacements must be a core principle going forward".

Local Authorities should "receive 100% of Right to Buy receipts", and the time limit for using them be extended from three to five years and have the flexibility to combine receipts with other forms of funding.

Committee Chair, Clive Betts, said: "The collapse of social housing building since the 1980s has had terrible consequences on our ability to provide adequate housing for those who need it.

"The last decade has seen a surge in families living in temporary accommodation and people rough sleeping, while at the same time we have come to rely on the private rental sector to shore up the creaking social housing capacity.

"We need at least 90,000 new homes a year to get to the level of social housing we need, but this is achievable. We believe this target can be reached in five years, but only if the Government gives providers sufficient financial backing and reforms the wider landscape that social housing providers operate in.

"They must ensure that the money is there to build, that land is available to build on and allow flexibility to buy surplus housing where it is not needed in the private sector.

"The system must ensure that any housing sold via Right to Buy is replaced like-for-like, and that local authorities are allowed to retain all the receipts produced to enable them to achieve this.

"This must be a long-term commitment to creating a social housing system that meets long-term demand. It will be challenging but it is achievable."