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LGA - Rental 'black hole' trap for almost three-quarters of would-be homeowners

A major new survey reveals how almost three quarters of would-be home owners believe they are trapped in a rental "black hole".

Seventy-one per cent of respondents to a national poll, carried out for the Local Government Association (LGA), which represents almost 400 local authorities in England and Wales, said they were "not confident" about the prospects of buying a home. Those not currently owning a home in Wales (83 per cent) and Yorkshire and Humberside (82 per cent) were particularly pessimistic.

The survey also reveals that almost two-thirds of mums and dads (65 per cent) have given or anticipate they will have to give a financial leg-up to their children or other family members to enable them to buy a home. Meanwhile, almost 30 per cent of parents giving or planning to give financial support are concerned about the impact this will have on their financial position in retirement (37 per cent in London).

Almost two-thirds of people (63 per cent) think it will be harder for first-time buyers to get on the housing ladder in five years than it is now (73 per cent in London). Most people aged under 30 have little confidence in their prospects of buying a home (70 per cent of 18-24 year olds not currently owning a home and 59 per cent of 25-29 year olds have no confidence). The survey was conducted by Populus Data Solutions, on behalf of the LGA.

The findings support the LGA's call for a raft of new measures to help tackle the housing crisis head-on – staving off an ever-swelling swathe of householders priced out from getting on the housing ladder and providing more much needed affordable homes for the 1.7 million households on the housing waiting list. The LGA has set out a blueprint for the first 100 days of the next government, tackling the key issues facing Britain today, which include reforming the current house building system.

LGA Chairman Cllr David Sparks said:

"This survey lays bare the full extent of the current housing crisis.

"A generation of parents who thought they'd paid off their mortgages are now finding themselves having to foot the bill for their children's mortgages. The housing bubble is not just a London issue it's a national problem being felt in urban and rural areas in every region.

"The shortage of houses in this country is a top priority for people, but buying a house is increasingly out of reach for many. Over the last two Parliaments, the number of people under 45 who can afford their own home has fallen by a fifth.
"Our plans would see half a million new homes built, transforming the lives of hundreds of thousands of families. Councils have set a precedent in the past and shown they can deliver housing on a large scale. It's time the next government learned from the past to build for the future."

The LGA is calling for:

  • The Government to put in place a meaningful incentives scheme to encourage private developers to speed up the delivery of housing which already has planning permission. Incentives should include reducing up-front costs and risks through early discussions with developers; guarantees and phasing payments for infrastructure. This would be alongside financial penalties through the Community Infrastructure Levy and council tax system where planning permission has expired. This will bring forward the estimated 60,000 homes on hold or classified as ‘shelved' in 2013 and speed up the delivery of private sector homes more widely, delivering an estimated additional 90,000 homes.

  •  The Chancellor to create council-led local land trusts with powers to pool surplus central and local government land for housing and make decisions about its disposal. Trusts would operate on a 'build now, pay later' model to support large sites to come forward with necessary infrastructure and affordable housing, a model which could also be applied to private sector landowners. This would enable 140,000 homes to be built over the next Parliament.

  • An immediate removal of the Housing Revenue Account borrowing cap, to be replaced by the same controls that apply to any other council borrowing, leading to 80,000 homes over five years. This would be in addition to the estimated 80,000 homes councils plan to build in partnership with housing associations and private developers over the next five years.

  •  The scrapping of the Right to Buy scheme's complex arrangements for councils and ensuring the discount offered is in line with the local housing market and stimulates sales and that the receipts from sales are retained directly by the council to reinvest in replacement housing. This will allow councils to replace around 50,000 houses sold through Right to Buy.

Notes to editor

TELEPHONE OMNIBUS – Populus Data Solutions

Sample & Methodology

1,000 nationally representative telephone sample of GB adults 18+

  • Survey took place 29-31 August 2014

  • 50% of the sample is contacted via landline and 50% via mobile to ensure that the correct proportion of mobile only households is achieved.

  • Sample methodology: RDD (Random Digit Dialling).

  • Quotas are set on age, gender and region and the data weighted to the known GB profile of age, gender, region, social grade, taken a foreign holiday in the last 3 years, tenure, number of cars in the household, working status, and mobile only household.

Case studies

Councils are delivering innovative schemes to build more homes:

The Preston, South Ribble and Lancashire City Deal will generate 17,420 new homes and secure £2.3 billion in leveraged commercial interest. The City Deal has enabled the partners to set up an infrastructure delivery fund and investment fund to get schemes moving and provide the catalyst for jobs and housing. Infrastructure developments will be funded by bringing together existing streams, along with investment from the Lancashire Pension Fund, land receipts, New Homes Bonus and the community infrastructure levy from developers. Homes and Communities Agency assets are being brought into the City Deal. The partners will keep the receipts for 10 years and a stewardship board will guide the disposal process. By bringing certainty over long-term investment, housing development can start quickly.

The Gateshead Regeneration Partnership will deliver 2,400 homes over the next 15 years. Gateshead Council is using its land assets to secure private finance through a local ‘asset based vehicle'.

South Norfolk Plans for 57 homes and over 3,000 square metres of commercial office space have just been approved. The combination of residential and office development will allow people to work near where they live, cutting down on the need to commute and thereby reducing the pressure on roads. The developer, Rosebery Park Developments, a company owned by South Norfolk Council, shared its plans for the site with Parish Councillors and members of the local community and invited their views on the proposed development in a public consultation. The plans are for the 57 homes include 13 affordable homes, range of business units and a recreational area for families to enjoy. The office blocks have flexible accommodation that can be subdivided into smaller office spaces.

Eastleigh Borough Council offered a ‘guaranteed purchase' model for developers who had sites with existing planning permission but were unsure if they could sell the houses, leading to stalled development. Under this arrangement the developer had an agreed period to sell and the flats were in fact all sold to private buyers.

Notes to editors

1. Review of the Local Authority role in housing supply. Evidence from the LGA
England needs to radically increase the number of houses built across all tenures. The government estimates that there will be an additional 221,000 households formed each year 2011-2021, however, fewer than 110,000 homes were completed across all tenures in 2013. This combination of rising demand and chronic undersupply has had a range of significant impacts on the way we live and the housing choices we make. Over 3 million adults aged 20-34 are now living with their parents, house prices are around five times average earnings and there are 1.7 million households on waiting lists for affordable homes across England.

2. Rural housing
Figures released by the National Housing Federation to mark Rural Housing Week show rural areas have become some of the least affordable places to live in the country. On average house prices in rural areas are 11 times the average salary, meaning potential homebuyers working in these areas would need to see wages rise by a staggering 150 per cent to afford a home Around half (44 per cent) of the 50 most unaffordable places to live in England outside of London are in rural areas. House prices in these areas are between 13 and 20 times the average salary.

3. Housing Study - CATI Fieldwork 29-31 August 2014 (PDF, 1 page, 79KB)

4. LGA briefing Second Reading of Affordable Homes Bill

Contact

Matthew Cooper
Senior Media Relations Officer
Telephone: 020 7664 3007
Email: matthew.cooper@local.gov.uk
Media Office (for out-of-hours contact): 020 7664 3333
www.local.gov.uk

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