We all know that home ownership has declined over the last decade for a whole host of reasons; but the main one is that house prices have increased way above wages. As a result people in the same professions that could easily afford to buy their own home in the 1970s, ’80s and early ’90s struggle to afford even a shared ownership scheme today.
Obviously increasing the supply of housing will help to bring prices down. But in high-price areas that have little opportunity for mass house-building such as London or the Home Counties, with large areas protected by planning constraints such as greenbelt, National Parks and Areas of Outstanding Natural Beauty (AONB), we need local solutions to match local circumstances.
In these, as in other areas, local government is the key to helping more local people step onto the housing ladder, at the same time keeping families and communities together and reducing reliance on the state.
Whether it is allowing grown-up children to live near their elderly and frail parents or young families to live near grandparents – good housing policy helps to keep communities together and helps prevent a ‘broken Britain’ with too much expensive state intervention needed when things go wrong.
If local authorities are given the freedoms and income to develop robust housing policies they can achieve what central government cannot, because local government can adjust its policies to match local circumstances.
So, for example, in Sevenoaks and similar areas most new developments are under three units due to large areas designated with strict planning constraints. The likely changes to restrict Section 106 affordable housing contributions to larger developments will only wipe out the majority of cash these authorities use to help people into home ownership.
In Home Counties areas house prices are comparable to a London Borough – up to 17 times higher than average wages. Yet because development is always profitable, building new homes remains constant. The affordable housing contribution in some places does not stop Britain from building, and does not slow down the planning process if administered efficiently.
Often there are viability clauses where if a developer can demonstrate unviability their contribution is either reduced or removed. Allowing local authorities to keep this money can only help the government with its wider health and social aims.
A successful approach taken in Sevenoaks uses two main methods to help people into home ownership. The first is to look at the total housing supply and to try to encourage older people to downsize into more suitable accommodation that is cheaper to heat and maintain, and also making them less likely to trip or fall. This helps to free up family sized homes and helps to keep the local housing chain moving.
They also focus on first time buyers with their award winning ‘Home of Your Own’ scheme with Moat Housing Association. This is a shared ownership scheme where people are loaned money to buy a home anywhere they want to, and when they sell it or increase their ownership share of the property, the loan is recycled to help someone else. There are a number of local examples of keeping teachers and other local people in the district as a result of this scheme.
Local authorities will and could be able to do more to meet their own local housing needs.
Increasing the number of two-bedroom homes both helps people to down size and younger people step onto the housing ladder. With its own funding stream (such as the affordable housing contribution) local authorities can loan first time buyers money to help bring empty homes back into use, develop more shared ownership schemes (possibly some for specific groups such as ex-military personnel), and to provide hand-holding assistance to help older people down size.
Many expensive areas suffer from people leaving to find cheaper housing further afield, and others moving in buying up anything remotely affordable. This breaks up communities, and local residents want new builds for local people resulting in a smoother planning process. This is why starter homes should have a local connection policy.
With all initiatives, local authorities can aim to make sure the money is recycled to help others, that they apply the local connection criteria, and that they keep the affordable home affordable in perpetuity. Starter homes would be so much better if they could stay affordable in perpetuity – and there are methods to achieve this. To lose an affordable home after a mere five years will have consequences in some areas where that home will be difficult to replace, leaving future need unmet.
Plus we have to question the morality of people making money out of subsidised ‘affordable homes’ after just five years. In some areas the ‘bank of Mum and Dad’ will see starter homes as a very good investment. Government affordable housing provision should be about homing people that need assistance onto the housing ladder not helping a lucky few profit from it.
The LGA calculates that discounted starter home prices will be out of reach for all people in need of affordable housing in 67 per cent of council areas. By removing the s106 affordable housing contribution from new developments the government will also hamper efforts by local authorities in certain parts of the country (mainly the home counties and South East but other places as well) to help out locally.
Local authorities conduct housing surveys and understand their housing needs. Whether there is a need for socially rented homes, starter homes, family homes, retirement homes or specialist homes such as special needs accommodation or dementia hubs and/or villages. So it makes sense that local authorities should be in the driving seat to decide what type of housing is needed where to meet residents’ needs.
If the government is serious about fixing broken Britain, keeping people out of hospital and dependent on social services, and helping people step onto the housing ladder it must allow local government to keep the funding it needs and be bold enough to allow local authorities to develop bespoke schemes that will work in their areas. One-size-fits-all will not work across the UK.