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Lack of new funding limits Tory social housing ambition

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Conservative plans to build “a new generation” of social housing are unlikely to result in the renaissance of council home building, according to housing experts.

election 2017 1

election 2017 1

Concerns over the way the policy is funded, its impact on the national deficit, and how councils allocate the properties have also been raised.

The Conservatives announced at the weekend should they form the government they planned to “strike new deals with the most ambitious councils and housing associations”. A proportion of the social homes built through these deals must be sold after 10 to 15 years, with the tenant receiving the first right-to-buy on that property. Money raised from sales would to be reinvested in building more social housing.

It is not known at what level rents would be set and there are concerns the homes will not be allocated to those most in need as such people are the least likely to be able to buy the property in the future.

Under the plans councils are to get a share of the £1.4bn affordable homes programme fund included in the last autumn statement, providing they can demonstrate demand for social housing and provide assurances about the quality of homes planned. The threshold for demand is unknown but it is anticipated the standardised housing delivery tests, to be introduced from November, will form the basis of calculations.

No target for the number of homes sought was stipulated.

Melanie Rees, head of policy at the Chartered Institute of Housing, said that combined with a lack of new funding was a concern.

“Our analysis shows we stand to lose about 200,000 socially rented homes from 2012 to 2020 so there is going to need to be a significant output of new socially rented homes to start to plug that gap,” she said.

LGC reported in March that Sheffield and Stoke-on-Trent city councils and Newark & Sherwood Homes – the arm’s length management organisation of Newark & Sherwood DC – had met with civil servants to discuss bespoke deals for housebuilding plans.

Chloe Fletcher, policy director at the National Federation of Almos, told LGC those councils had been hoping to get a share of the £1.4bn affordable homes programme fund.

However, ministers anticipate Manchester and Birmingham will be at the front of the queue to get social housing deals.

Councils that qualify for a deal are to benefit from gaining greater borrowing capacity for housing. One Conservative county leader questioned both the impact £1.4bn could have given the scale of the housing shortage and “what impact relaxing borrowing has on the government’s commitment to reduce the deficit?”.

The plans have been likened to a rent-to-buy approach pioneered by Rentplus and financed by the firm.

Plymouth City Council entered into an agreement with Rentplus to deliver 500 homes in five years. Tenants have a 20-year lease on the property and pay up to 80% of market rent, gaining an opportunity to buy the property once every five years. Only 19 homes have been built so far but Plymouth’s housing delivery manager Nick Carter said the model was providing “good quality, energy efficient, low cost housing for people” on the council’s housing register. He added Plymouth would “definitely be keen” to secure a social housing deal should the Tory policy be enacted.

Ms Rees questioned whether other areas would be so keen to “engage” if it closely resembled the Rentplus model, and urged the government to instead agree deals with areas to retain all right-to-buy receipts, as the Housing and Planning Act 2016 permits.

Meanwhile, Labour have vowed to build at least 100,000 council and housing association homes for “genuinely affordable rent or sale” annually by the end of the next parliament The Liberal Democrats promise to relax borrowing rules for councils so they can build more homes.

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