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Government report calls for end to affordable homes quotas

A government-commissioned report has urged a relaxing of requirements for affordable homes in new build schemes

Such a move, involving councils using flexibilities in the planning system, could tempt developers to build more homes for let, reversing the slump in the housebuilding market, reported sister title Construction News.

The report by Adrian Montague, chairman of private equity company 3i which owns part of Foster & Partners , also recommends a task force to encourage built-to-let projects, the release of unused public land and allowing homes in the green belt on the proviso that other areas of countryside are given protected status.

A CN investigation last week found that a number of London councils were sitting on significant amounts of land that could be used for development.

The Montague report said: ‘While desirability of affordable housing should not be ruled out, it should be weighed against the benefits already built into market rent developments, in the context of an accurate assessment of the economics of building homes to rent.

‘In many cases, it will be appropriate for authorities to waive affordable housing requirements in relation to schemes for private rental, or to the private rental component of larger schemes also including an owner-occupier component.’

Affordable housing requirements have been coming under increasing scrutiny recently, with Eric Pickles announcing that mediators would be made available to navigate section 106 requirements in some councils.

Housing minister Grant Shapps told the BBC’s Today programme more building should take place on government land: ‘We’ve identified space for over 100,000 properties - some of it takes time to come forward, for example where the Army own the land but they haven’t yet moved their garrisons to wherever they’re going to next, so there are technical reasons with bringing that forward, it’s certainly a very good idea to use government land.’

He added that the UK market was unusual in that there was no institutional sector in building homes for rent, and that he supported moves to boost house building.

‘Absolutely, building houses, greater construction, every 100,000 homes gives you a per cent of GDP, it’s a fantastic way to go, but there isn’t any magic silver bullet which is why I’ve asked Sir Adrian [Montague] to produce this report.

‘You know, if it is at the point, and I believe that it is in some cases, where no development or regeneration takes place, then clearly something is wrong and we’re trying to kick-start this particular part of the sector.’

John Assael of Assael Architecture said: ‘I cannot understand the logic in only relaxing the standards for affordable homes and not for all homes including for owner occupiers.  The numbers of affordable homes being built in 2012 are shockingly low so the political and housing benefits seem negligible if only affordable housing is being targeted.  The reason for the tiny numbers of affordable units is that the Government has turned off the funding.

‘The average age for a first time buyer is now mid thirties and the percentage of those owning their own homes is falling.  As a society we need is to accept that building the lowest number of decent homes – private or affordable - since the 1920’s is simply not acceptable anymore and that the Government needs to wake up to the social and economic consequences that this pitiful legacy has on all of us.’

David Morley of David Morley Architects said: ‘We have currently two significant schemes for Urban Splash, one at Lister Mills and one in Watchet, west Somerset. The programme for the completion of both has been held up by the sluggish economic recovery and a government initiative which will stimulate the housing market should be welcome.

‘Travelling around our cities there are some very bad examples where developments have visible affordable housing component which appear on the outside to be cheaper than their surrounding developments and this should be avoided, whether by design or policy. A formula whereby accessible housing could be made available without rigid quotas sounds interesting.’

Jerry Freeman, senior director of the CBRE, said: ‘Local authorities have the ability to generate a revenue return from this type of asset class developed on their own land, rather than an often depressed capital value if they were to sell. They are also very well placed to raise finance for new housing from private or institutional investors provided that the transaction model is right.’

National Housing Federation chief executive David Orr called the move ‘a crucial part of the solution to help tackle the country’s desperate housing shortage.’

‘Housing associations already own and manage thousands of homes for private market rent and want to do more. They have the business expertise and skills at property management to help attract more investment.’

‘That said it is important to plan positively for housing growth which meets the needs of the whole local community. With 1.8 million households on housing waiting lists, the delivery of market rented homes shouldn’t be at the expense of affordable homes.’

The Chartered Institute of Housing welcomed the report, but called for the new approach to be trialled for a time-limited period, and for guarantees that homes remain available for private rent in the longer term.

The CIH also backed proposals in the report to explore a voluntary system of standards to improve rented housing quality, management and maintenance.

The Home Builders federation also expressed some uncertainty, saying that although the report ‘makes some sensible recommendations’ in aiming to attract private investment and increase site viability, housing was a complex issue and that ‘it is improtant to look at the overall picture and not one area in isolation’.

On Monday the Policy Exchange think tank urged councils to sell off expensive properties in order to build more social housing.

And on Tuesday it emerged that house builders and the government would launch a campaign next month to make consumers more aware of the NewBuy intiative, aimed at getting first-time buyers on the housing ladder.

Jennet Siebrits, head of residential research at the CBRE, commented: ‘The private rented sector is often seen as the naughty middle child of the housing market, and is not given the attention it deserves, so we welcome any constructive measures to boost it.’

‘Relaxing Section 106 and Community Infrastructure Levy charges could make it a more attractive option; developing for the private rented sector is less profitable than for private sale and an onerous Section 106 may mean a scheme is not viable.’

Meanwhile, Shelter chief executive Campbell Robb claimed the report ‘misses a trick’ by ‘offering nothing for the millions of people already in the sector, paying sky-high rents and living under constant threat of eviction or further rent rises’.

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