COMMITTEE CALLS FOR INCREASE IN HOUSE BUILDING TARGET!

A parliamentary committee has called on the UK government to raise its house-building target by 50 percent, and build 300,000 new homes a year to tackle the country’s housing crisis.

The cross-party House of Lords economic affairs committee says the current target of 200,000 is not enough to address national need. The committee also says that local authorities and housing associations must be free to build substantial numbers of homes for rent and for sale.

Home Building

In its report, Building More Homes, the committee says that the government’s housing policy isn’t working. The target does not meet the demand for new homes or moderate the rate of house price increases. Restrictions on local authorities’ access to funding prevent the development of enough social housing.

The report says that in a functioning market, the private sector, housing associations and local authorities would be building enough to meet the demand, but they aren’t. Large developers look to profit margins rather than volume, housing associations face loss of revenue due to Government policy on social rents and local authorities aren’t able to finance large housebuilding programmes.

Reduced Supplies

The report also adds that frequent changes to tax rules and subsidies for house purchases – such as the extension of Right to Buy – reduce the supply of homes for people who need low cost rental accommodation.

Lord Hollick, committee chairman, said: “We are facing an acute housing crisis with home ownership – and increasingly renting – being simply unaffordable for a great many people.

“The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future. The private sector alone cannot deliver that. We need local government and housing associations to get back into the business of building.

House Building

“Local authorities are keen to meet this challenge but they do not have the funds or the ability to borrow to embark on a major programme to build new social homes. It makes no sense that a local authority is free to borrow to build a swimming pool but cannot do the same to build homes.”

Lord Hollick said the government was too focused on home ownership – something that was never going to be achievable for many people, and in some areas it was also out of reach for those on average incomes.

The committee has recommended that local authorities be free to borrow to fund social housebuilding.