Four million working people to face affordable housing crisis by 2024

29 Jul 2016 11:42 AM

Millions of working people will no longer be able to afford somewhere decent to live by 2024 and will need access to some type of affordable housing, new research published by the Local Government Association warns.

The LGA, which represents more than 370 councils in England and Wales, is calling on new ministers to take urgent steps so councils can resume their historic role as a major builder of new homes and help tackle the nation's deepening housing crisis.

It warns the economic uncertainty caused by Brexit and a widespread and growing demand for affordable homes - including for social and affordable rent - makes it even more important for councils to be handed greater powers to build new homes.

Analysis from the Learning and Work Institute for the LGA projects that:

• A minimum of 3.98 million people of working age will still need access to affordable housing options by 2024 even if the country is able to achieve full employment by upskilling 3.5 million people to take higher paid jobs the economy has been projected to create.
• Around 5.4 million people of working age will need access to affordable housing by 2024 if qualification levels do not increase. Overall demand will be higher should the economy not create the jobs projected.
• The likely demand of affordable homes for working age people will range from 2.25 million to 3.07 million, compared with 2.87 million in 2011. Overall demand will be much greater when taking into account those not working, such as pensioners.
• Affordable is defined as someone who has to spend 30 per cent or more of their household income on their housing costs.

To spark a revitalisation of council house building, the LGA is calling on government to allow councils to:

• Borrow to invest in housing in the same way that they are able to borrow to invest in other projects;
• Keep 100 per cent of the receipts from properties sold through Right to Buy to build new homes;
• Combine Right to Buy receipts with other funding, to use receipts to build through housing companies, and to count the value of council land in building replacements.

The LGA is also urging government to work with councils to review how different elements of the Housing and Planning Act should now be implemented in light of the economic uncertainty created by the UK's decision to leave the European Union.

Cllr Peter Box, LGA Housing spokesman, said:

"More and more families will be affected by our housing crisis every year. As our analysis shows, millions of people studying hard and succeeding in work will also no longer be able to find an affordable and decent place to live.

"Bold new action is needed to solve our housing crisis following the vote to leave the European Union. A renaissance in house building by councils must be at the heart of this.

"The private sector clearly has an important role to play but the reality is that it cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead. 

"Councils want to get on with the job of building the new homes that people in their areas desperately need.

"If we are to stand any chance of solving our housing crisis, councils must be able to replace sold homes and reinvest in building more of the genuine affordable homes our communities desperately need now more than ever."

Notes

The LGA set up a Housing Commission last year to explore how a renewed investment in the different new homes that people need can deliver significant wider benefits for communities.

Over the past eight months it has heard from developers, planners, charities, health partners, housing associations and many others and is publishing early findings at the second day of the LGA's Annual Conference in Bournemouth yesterday. 

The report include calls for:

• National backing for new local government housing delivery models building new and different types of homes, which could include new intermediate rent, rent-to-buy, modular housing, and co-housing options. This must coincide with a revitalisation of council house building by allowing councils to keep a greater proportion of Right to Buy receipts and to combine receipts with Homes and Community Agency funding.
• Allowing councils to set planning fees locally so they can cover costs and continue to develop a proactive planning approach for unlocking housing growth, and developing powers for councils to ensure homes are built on sites where planning permission has been granted but building may have stalled.
• Building a new market of homes attractive and suitable for older people better able to meet health needs and supporting moves which, in turn, would release more family homes into the local market. A sustainable funding model needs to be established to provide more supported housing options for vulnerable people.

Housing and Planning Act 2016 (Get in on the Act) The legislation completed its passage through Parliament on 11 May 2016 and received Royal Assent on 12 May 2016.

Building our homes, communities and future: preliminary findings from the LGA Housing Commission This investigation is not seeking to provide all the answers or to cover all of the issues. Our aim is to look at where there are real opportunities, what councils are already doing, and how we can work with the Government and our partners to make change happen.

Contact

Greg Burns
Phone: 020 7664 3184
Email: greg.burns@local.gov.uk