The details of Labour’s plan to build 200,000 new homes a year by 2020 have generated mixed responses from the housing industry, with many experts criticising the party for failing to go far enough.
The party has released a report based on a commission led by Sir Michael Lyons into the housing and planning policies needed to reach the 200,000 homes-a-year target. The Lyons housing review states that under a Labour government:
- Up to half of new homes will be reserved for sale to local people.
- Councils will restrict the number of homes sold for buy-to-let.
- Local authorities will be able to designate housing growth areas.
- The existing national planning inspectorate will have increased powers to force councils to develop a housing plan.
- Local authorities will not be able to borrow money to build, but housing will be a priority of the government’s capital spend.
- Councils that have reached the housing revenue account cap will be able to borrow from other councils that haven’t.
- Groups of local authorities could form Olympic-style new Homes Corporations with strong planning powers.
- There will be measures to underwrite loans to help small builders.
You can download the full report here.
David Orr, chief executive of the National Housing Federation and member of the Lyons review panel, welcomes many of the ideas but says the majority of homes are beyond the means of most first-time buyers.
In London you now need an income of £100,000 to afford a mortgage. We can only make these new homes genuinely available for local people if we also make them more affordable.
We’re pleased that the ideas we’ve put forward to all the parties ahead of the general election have been listened to, such as access and control over how land is used. We are calling on the next government to commit to end the housing crisis within a generation and to publish a long-term plan within a year of taking office detailing how they will do this.
The review is the most comprehensive blueprint for overcoming barriers to housebuilding since the Barker Review of housing supply 10 years ago, according to Grainia Long, chief executive of the Chartered Institute of Housing and a member of the panel.
We welcome the focus on investment in homes for shared ownership and private and social rent and the recognition that a range of providers working in partnership is vital to build the homes we need.
As the report points out, house building is the best way to boost the economy and much of the investment comes back to the Treasury in increased tax revenue. We understand that it would be extremely difficult for any political party to commit to increasing borrowing in the current environment. But the issue of the investment needed to tackle our housing crisis must be addressed and we welcome the report’s recognition that housing should be a leading candidate for extra public investment when that becomes available.
The review is a key talking point at the Solace Summit 2014, the UK’s largest gathering of local authority chief executives and senior managers – but it has been met with some scepticism.
#solacesummit Lyons review at first glance does not offer more than what already happening. Policy areas such as market failure not clear.
— Manjeet Gill (@Manjeetgill3) October 16, 2014
Is Lyons review the first sign of a future return to top down target setting: http://t.co/JtQ83tkHfh #solacesummit #LyonsReport #LyonsReview
— Graeme McDonald (@McDonaldGraeme) October 16, 2014
The report also recommends an incoming government commits to a new generation of garden cities, a policy strongly supported by Kate Henderson, chief executive of the Town and Country Planning Association (TCPA), also on the Lyons panel.She welcomes the review’s acknowledgement that the principles of garden cities, which focus on sustainability, are also relevant in regenerating existing towns.
For the first time in a generation we are now in the position of having cross party political support for garden cities … The Lyons review has also been right to focus on the quality of new homes as well as the quantity. We particularly welcome recognition in the report for space standards, high-quality design and zero carbon standards.
Friends of the Earth’s head of policy Mike Childs is concerned that new housebuilding projects will not prioritise environment-friendly standards.
Urgent action is needed to tackle the shortage of affordable homes, but any new construction must not lead to significant increases in carbon pollution or damage nature. A radical overhaul of housing policy is also urgently needed. This must include new and existing homes, water and energy efficiency, access to nature and the prioritisation of public transport.
Britain’s housing stock must be future-proofed to deal with a world facing rising energy prices and the threat of catastrophic climate change.
But Alexandra Jones, chief executive of the Centre for Cities, doesn’t think the report’s ambition to deliver up 500,000 homes through garden cities is the right response to the immediate housing crisis, given how long major new developments take to deliver.
We would like to see further, explicit attention afforded to the potential of many well-connected sites next to thriving cities, some currently designated as green belt, to support large-scale housing development, and a much greater willingness to also extend cities’ responsibilities over other drivers of local economic growth – which are also intrinsically linked to housing supply and demand.
She commended the report’s recognition of the different needs across the country, and proposed measures to empower and equip local government. But she questioned whether ambitious housebuilding targets can be met without further funding investment.
This sentiment is shared by Peter Box, chair of the Local Government Association’s environment, economy, housing and transport board. He is disappointed the report failed to recommend removing the housing borrowing cap.
The housing borrowing cap is fundamentally flawed and places unnecessary restrictions on the amount of money councils can invest in housing. Until this is removed councils will continue to be hampered in our efforts to provide the homes residents need.
It is positive that the Lyons Review has also recognised the importance of giving councils a lead role in speeding up building and making sure increased land values benefit communities through investment in schools and roads. We are pleased the review has listened to our calls and proposed reforms to right to buy.
Home Group chief executive, Mark Henderson, questioned if the Lyons Review went far enough to meet the demanding target of ending the housing crisis in a generation. He wants to see the development of housing enterprise zones, which would enable homes to be built at scale and across local authority boundaries.
Planning has been a longstanding and thorny nut to crack so the introduction of a guillotine on planning permission would limit land banking but this has to be supported by a planning system that encourages development rather than acts as a barrier to schemes.
With 245,000 new household formations each and every year, we have to make sure that political parties recognise that their minimum development targets not only have to meet that demand, they have to exceed it to deliver decent homes to the 1.8m people currently on local authority waiting lists.
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