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Property Buyers - Code of Practice

Is the supply of social housing under threat?

social housing

The final quarterly survey of registered providers was released on the first of this month finding the sector had sufficient access to finance and was in a strong position, with 60% of new facility funding coming from capital markets. There were 788 homes developed for sale in the quarter, this increase in completions coincides with the deadline for grant funded schemes under the 2011-2015 Affordable Homes Programme. The March 2015 report indicates the social housing sector is performing well, but with recent government revelations the future of social housing supply could be questioned.

Previously, councils could demand developers include a number of homes at reduced market-level prices on their schemes. Reforms to planning policy were contrived under the preceding coalition government to exempt companies building fewer than 10 homes as well as developers seeking to rebuild existing houses. The intention? To make house-building cheaper, with Whitehall estimating a saving of £15,000 per build. The new rules mean councils can only demand sub-market housing is offered if the developer expands the total amount of floorspace.

Councils have claimed that the new rules have restricted the construction of new low-cost housing in their constituencies. With two thirds of councils surveyed claiming many developers were withdrawing and resubmitting revised plans to profit from the new rules – in order to dodge constructing or financing low-priced homes they had agreed to build or finance. The efforts by parliament lessen the financial burden on developers with an emphasis on encouraging an increase in housing supply. It seems that these law changes will ensure a rise in available housing, but at what price?

The Tories plan to extend the right-to-buy to tenants of housing associations. However, the House of Lords yesterday backed an amendment to the bill that will certify charities are not “compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes”. The bill does not explicitly mention housing associations, however, many are classified as charities and therefore would stop Tory plans to force them to sell at a discount to tenants.

The House of Lords vote shadows doubt over Tory plans that were announced in the run up to the election battle, seen then as a vote-reaping ploy, but indeed something they have continued to pursue. If the plans did come to fruition, it would serve as a huge disincentive for charitable benefactors when donating to affordable housing schemes, as they would know the government could instigate selling off these assets directly at any time.

Housing costs the NHS £600m a year in avoidable diseases and injuries caused by damp and overcrowded homes. The links between poor housing and ill health are well documented, moreover so is the positive correlation between good housing and vitality. The government, then, should be focussing on improving housing before racing towards ownership, as ownership is an end-goal, in the short-term creating more affordable, liveable and sustainable housing is an achievable milestone.

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