News Article

WMiC, Issue 17 - Build - local housing requirements

Posted on 13 July 2017 (Permalink)

Let’s build a home

Before the election the manifestoes of the main parties indicated a broad agreement around the need to boost housebuilding substantially. At the LGA conference Communities Secretary of State, Sajid Javid, reprised this theme. He cited estimates which put the level of housebuilding needed at between 225,000 and 275,000 homes a year. Saying there was a “serious shortage of decent, affordable housing”, he commented that the average home costs almost eight times average earnings.

Just can’t get enough

At a time when official figures show that around 140,000 new homes were built last year, increasing housebuilding to the envisaged levels will be no easy task. Indeed a useful House Commons briefing on housing supply noted that since 1939 housebuilding has only exceeded 200,000 a year when there were large-scale public sector programmes. Following its precipitous decline, council-led building has increased, but it now makes up only a very small percentage of the new homes built. Currently, the bulk of housing comes from the private sector with around 20% from housing associations.

Build

Pointing out the “patchy” performance of councils in bringing forward local plans and housing development, Sajid Javid confirmed a forthcoming consultation on a new, standardised way for councils to assess their local housing requirements. Outlined in February’s Housing White Paper, this new approach would, among other things, be more transparent, “more realistic about the current and future housing pressures” and take account of the “needs of different groups, for example older people”.

Speaking about the need for a new approach, the Secretary of State said that “where housing is particularly unaffordable, local leaders need to take a long, hard, honest look to see if they are planning for the right number of homes”.  Regardless of whether higher levels of housebuilding would improve the affordability of homes on the open market, securing homes of the size, type and tenure to meet local requirements is likely to continue to be a major challenge for councils.

As housing markets do not respect administrative boundaries, the White Paper emphasised the importance of cross boundary planning. Indeed, there are already a number of joint core strategies in the region. While the West Midlands Combined Authority’s (WMCA) devolution deal did not cover strategic planning, it does give the Mayor some powers over housing delivery and improvements to housing stock. Housing is one of WMCA’s priorities and with its Land Commission reporting earlier this year, it will be interesting to see how these powers are developed and the impact they have.

Our house - right to buy sales

The supply of two ways of providing lower-cost housing are connected through the right to buy scheme, where qualifying council tenants can buy their homes at a discount. While increasing access to home ownership, unless new social homes are built to replace them, the sales reduce the availability of lower-cost homes to rent.

At the end of June the latest figures for sales by local authority area were published. According to the Chartered Institute of Housing (CIH) this showed around 12,800 homes were sold over the past year, but less than 4,500 were started or acquired to replace them using the receipts from their sales. While a time lag between sales and replacements is to be expected, the CIH found “mounting evidence that replacements are simply not keeping pace”. Indeed, their research suggests that most councils “only expect to be able to replace half or fewer of the homes they sell under right to buy”.  Since the right to buy discounts were increased in 2012, the CIH say that some 54,500 homes have been sold and only 12,500 have been started or acquired to replace them. The figures for the social housing sales by local authority can be downloaded here.

West Midlands’ bricks and mortar

Also last month, a useful briefing paper from the House of Commons Library looked at home ownership and renting demographics. Among other things, this showed the balance of housing tenure in the West Midlands to be 65% home ownership, 19% socially rented and 15% private rented. Behind this snapshot, however, are some dramatic trends. For example, between 1996 and 2016 the number of households renting from private landlords in the West Midlands increased by around 150%, a rate of growth second only to the North East. At the same time, the proportion of households in social housing fell by 16%, the third highest decline in the country. The change in homeownership was a less dramatic increase of 6%, one of the lower increases.

Local housing data

Clearly, the balance of tenure and the level of housebuilding varies considerably from place to place. For information on the nature of the local housing stock, the House of Commons Library has produced a helpful interactive tool. This tool also allows the comparison of housing information by council area on social housing, the number of affordable homes built each year and the number of new homes built each year. The resource can be downloaded from here.

Looking at the cost of renting, Valuation Office has updated its regular estimates of the cost of renting different sizes of housing that they use for each area. These local reference rent levels can be downloaded from here.

Shelter also has a wide range of accessible information by council areas available via its interactive Housing Databank tool. Under the categories of Housing Need, Affordability, Supply, and Social and Welfare there are a number of relevant searchable sub-categories. The Databank was last updated in May and can be accessed here.

Planning reform summary

Lastly, with Sajid Javid talking about a need to “rethink the entire process of development” it may be worth a look at the useful summary of reforms produced by the House of Commons Library which can be downloaded here. The description of the “proposed changes yet to be made” runs to over 20 pages.

 

Sources and resources