David Cameron has announced a “dramatic shift” in housing policy that will prevent councils from requiring developers to build homes for sub-market rent in planning agreements.
In his speech at the Conservative party conference, the prime minister confirmed that the government had secured a deal with housing associations to extend the right-to-buy to 1.3 million more tenants and pledged that local authority control of schools would be a “thing of the past”.
Announcing a switch from “Generation Rent to Generation Buy”, Mr Cameron told Tories in Manchester that the government would a change to s106 planning rules. These currently let councils require developers to build affordable homes for rent. In future these affordable homes could be homes to buy.
“For years, politicians have been talking about building what they call “affordable homes” – but the phrase was deceptive,” he was reported as telling the conference.
“It basically meant homes that were only available to rent. So today, I can announce a dramatic shift in housing policy in our country.
“Those old rules which said to developers: you can build on this site, but only if you build affordable homes for rent, we’re replacing them with new rules [that say] you can build here, and those affordable homes can be available to buy.”
In response to the proposal, the British Property Federation urged the government to focus on delivery of all tenures.
BPF chief executive Melanie Leech said Generation Rent was not something to be ashamed of as many countries had thriving rental markets.
“While we are not against owner occupation, and see starter homes as a welcome initiative, we are aware that such a policy is stoking demand for home ownership, rather than focusing on meeting supply,” she said.
“Build to rent has enormous potential to deliver additional homes to the UK, and government must not overlook this in blind pursuit of making us a nation of homeowners.”
Chartered Institute of Housing chief executive Terrie Alafat questioned what help would be available for people on lower incomes who cannot affordable to buy – even with a 20% discount.
She said: “More affordable housing to rent is critical if we are going to solve the housing crisis, but this policy could result in a significant reduction – according to the Joseph Rowntree Foundation, 37% of all affordable homes in England were completed through section 106 agreements in 2013-14.”
Mr Cameron also confirmed in his speech that communities secretary Greg Clark had reached a deal with housing associations over right-to-buy.
The policy is expected to be funded by the sale of empty high-value council homes.
Ms Alafat said: “We support the government’s ambition to give people the opportunity to achieve their aspiration of home ownership, but if affordable housing is being sold, it is absolutely crucial that it is replaced on the same terms. Without extra funding, we fear this may not prove to be the case.”
She added that, under the current right-to-buy, homes were not being replaced on a one-for-one basis, with figures showing that 32,288 homes had been sold since April 2012 but only 3,644 started or acquired to replace them.
The CIH estimates 145,000 housing association tenants will exercise the right-to-buy during the first five years of the policy.
The prime minister also spoke of his passion for academies and free schools. He said: “Head teachers are growing in confidence as they throw off the shackles of local council control…raising the aspirations of children, parents, communities.”
His “next ambition”, he added, is for 500 new free schools and that every school should be an academy. “And yes – local authorities running schools a thing of the past,” he said.
A Local Government Association spokesman said more than 80% of council maintained schools are currently rated as ‘good’ or ‘outstanding’ by Ofsted.
“Local authorities should be regarded as education improvement partners rather than as a barrier to change,” he said. “Hundreds of schools, often in disadvantaged areas, are being turned around thanks to the intervention of local councils and it [is] clear that strong leadership, outstanding classroom teaching and effective support staff and governors are the crucial factors in transforming standards in struggling schools.
“Schools spend billions of pounds of public money yet at present, there is no rigorous accountability for academies that are ‘coasting’; no clear understanding of what happens when one falls into this category; and no risk assessment in place for those rated as good or above.”
He said parents still turn to councils for advice and support but local authorities’ powers to intervene were “strictly limited”. “The Education and Adoption Bill provides the ideal opportunity to right this wrong and should allow councils and the best maintained schools to share expertise and provide support to school leadership teams to ensure standards rapidly improve,” he added.