Monthly Archives

March 2019

Chancellor offers £3bn fix for Britain’s ‘broken housing market’

By | Residential Property, Social Housing

Philip Hammond’s spring statement includes funding to build 30,000 affordable homes.

A new £3bn scheme will fund the building of 30,000 affordable homes, the chancellor has said, as he proclaimed that the government was on track to reach its target of 300,000 new homes a year in Britain.

Philip Hammond’s spring statement also contained a patchwork of separate schemes to boost housebuilding, including £717m to “unlock up to 37,000 homes” in the Oxford-Cambridge arc, Cheshire and west London.

“The government is determined to fix the broken housing market,” said Hammond. “Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable.”

Under the affordable homes guarantee scheme – an existing programme that will receive renewed government support – the government does not directly fund new homes but gives a Treasury guarantee to housing associations to allow them to build.

The housing charity Shelter said while it welcomed the boost for affordable homes, borrowing by housing associations would not solve the housing crisis, and the government needed to fund much higher levels of social housing.

Polly Neate, chief executive of Shelter, said: “The government’s decision to renew the affordable housing guarantee scheme is a welcome announcement. This initiative will support the building of more desperately needed social and affordable homes.

“While this is good news, it has to be noted that we can’t deliver social housing on the scale we need on borrowing alone – 3.1m social homes are needed in the next 20 years to tackle the housing crisis at its root and lift thousands of families out of homelessness. We need much more grant funding for social housing in this year’s spending review to get a grip on our ever-growing housing emergency.”

Official government figures show that affordable homes – for sale or to rent – make up a relatively small, but growing, part of the housing supply in England.

In the six months to 30 September 2018, there were 9,909 new affordable homes started, up from 6,989 in the same period of 2017.

The definition of what “affordable” means is controversial. The government defines it as “social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market”. It includes shared ownership homes for sale “provided at a cost above social rent, but below market levels”.

Source: The Guardian

Government confirms annual CPI+1 Rent Increase

By | Publications & Reports, Social Housing

The Government has indicated that it will permit annual rent increases of up to one per cent above the consumer price index (CPI), in it’s response to a consultation with the sector.

The MHCLG announced plans in October 2017 to permit Registered Providers to increase rents on social rent and affordable rent properties by up to CPI plus 1% each year from 2020, for a period of at least five years.

In September 2018 it launched a consultation on its proposed direction to the Regulator of Social Housing concerning social rents from 1 April 2020 onwards, which closed on 8 November. Yesterday it published the results of that consultation and it’s response.

Seventy-one per cent of respondents to the consultation agreed that the regulator’s Rent Standard should apply to local authorities.

Meanwhile 57 per cent agreed with the proposal to permit Registered Providers to increase rents by up to CPI plus one per cent each year. However 34 per cent of those responding to this question disagreed with the proposal, including 87 per cent of responses from individuals and organisations representing tenants.

The MHCLG stated in its response: “The government acknowledges the concerns raised about the potential impact on tenants of permitting rent increases of up to CPI+1% each year from 2020. However, it is important to recognise that most existing tenants will have benefited over the previous four years from a reduction of 1% each year as implemented through the Welfare Reform and Work Act 2016. MHCLG adds that the CPI plus one per cent is the maximum increase but “landlords have discretion to apply a smaller (or indeed no) increase based on local circumstances”.

The response concludes; “Overall, we believe that the proposed CPI+1% limit strikes a fair balance between the interests of landlords, tenants and taxpayers.”

It adds: “The Government therefore intends to proceed with the proposal to permit annual rent increases of up to CPI+1%.”

In October 2017, Theresa May announced that the CPI plus one per cent rises would resume for five years from 2020, and the government launched its formal consultation in November last year.

The consultation received 157 responses, of which 37 per cent were from local authorities or their representative bodies. Eighteen per cent were from private Registered Providers or their representative bodies and 35 per cent were from individuals or tenant organisations.

 

Source: Social Housing

 

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