Bob Kerslake, chair of Peabody Homes and former head of the Civil Service, fears the Housing and Planning Bill’s preoccupation with home ownership will harm the low-cost rented sector
The Housing and Planning Bill is a mixed bag. There are some good features, but also some much less attractive ones.
To start with the positives, automatic planning in principle on brownfield land that is registered and contained in local plans is a good step forward, providing all relevant design standards are adhered to. Streamlining of the compulsory purchase regime is also welcome, speeding up the process in a fairer way for all parties.
Increased flexibility for housing associations is also to be welcomed given that they are supplying 40 per cent of all new housing in London. Associations have the capacity and the resolve to deliver much more in partnership with government, councils and the private sector.
The extension of the right to buy on a voluntary rather than statutory basis will help safeguard the independence of a sector that last year delivered almost 47,000 new homes for affordable rent, social rent and shared ownership.
There are unresolved issues here though. The bill in its current form does not fully reflect the proposal put forward by the National Housing Federation (NHF) to the government. It states that the regulator will hold housing associations to account against an as yet unpublished ‘home ownership criteria’.
Housing associations must not be compelled to sell their own private assets
Associations are already delivering homes for sale and shared ownership in significant numbers, but as I’ve said elsewhere, they must not be compelled to sell their own private assets if their board deems it inappropriate. For Peabody, which I chair, we would not want to sell homes built using the original charitable donation from George Peabody. Neither would we think it right to sell homes built or acquired with no public grant.
In the interests of clarity and transparency it would be better for the home ownership criteria to be published in parallel with the bill.
The agreement between the NHF and the government assumes that housing associations receive full compensation for any homes sold. Unfortunately this is not reflected in the bill. There are two significant concerns with this:
Firstly, any compensation paid will be delivered as a grant with conditions attached. These need to be made known now.
Secondly, the grant will be paid for through the sale of high-value council stock. Chartered Institute for Housing (CIH) analysis has shown that there will be a significant difference between the number of high-value council homes sold and the number of people eligible for a right to buy discount. In short, the numbers do not stack up.
To address these issues, the proposed funding model ought to be subject to a period of consultation with interested parties, and should consider alternative options, such as equity loans. Like the pay-to-stay consultation, this could run in parallel with the bill.
Starter homes would provide valuable discounts to help people get on to the housing ladder. But to replace affordable homes for rent delivered through planning gain with starter homes is perverse and not what was envisaged when the proposals for starter homes were first put forward. Councils will not be able to insist on a sub-market rented element of schemes where provision of starter homes is included. It is difficult to see how those stuck on council-house waiting lists, many paying huge rents in the private rented sector, will have any chance of affording a starter home.
We need to build more homes of every type
The policy in its current form will inevitably lead to a reduction in affordable homes to rent. I would strongly argue that the starter homes initiative should be returned to its original intent of an additional source of new homes through the development of ‘exception’ brownfield sites.
The imperative to build starter homes at pace may result in poorer design and sustainability standards. I would echo the RIBA’s call for the government to work with architects, developers and local communities to ensure the new homes are well designed and supported by appropriate infrastructure.
There is no silver bullet to tackle the housing crisis. We need to build more homes of every type. I am absolutely clear though, that low cost homes for rent in all areas are essential both socially and economically.
The ultimate test for the Housing Bill, and indeed the government, is whether the policies lead to a much-needed step change in total housing supply.
As it stands, rather than focusing on boosting supply across all tenures, the emphasis appears to be on increasing home ownership at the expense of affordable homes to rent.
Kerslake: 'There are unresolved issues in Housing Bill'