Select Committee – H4SW evidence
I was pleased to be invited last month, as Chair of Homes for the South West (H4SW), to give evidence to the HCLG Select Committee as part of the Inquiry into Long Term Delivery of Social and Affordable Rented Housing.
It’s a fascinating experience, and the many protocols and formalities of the process, as well as the setting in Portcullis House, underline the fact that this is a process that influences national policy. It’s a real chance to influence government’s thinking on how the country can meet housing need over the coming decades.
The Committee asked a number of questions which broadly reflect the four priorities which H4SW group believe need to be addressed to increase the supply of affordable housing in our region: Land, Planning, Skills and Infrastructure.
Building in the right areas, role of section 106, housing targets
MPs started with a number of questions on location of new housing, regional targets and S106 provision.
My response covered the difficulties that RPs face as developers: the scarcity and cost of land, the way the planning system works, the skills pipeline and the particular challenges of infrastructure in the South West. I also spoke about the need to work closely with local authorities to ensure that developments are aligned with local housing need, and to adopt long-term, well-informed thinking when it comes to building housing in the right places. This local insight is vital and local authorities should be empowered to set targets and update their local plans.
MPs asked if there is an argument for key worker allocations in affordable housing targets.
In my view the need for key worker housing never goes away, and targeted programmes have worked well in the past. Mixed communities are important for the success of towns and cities, and we would support a greater emphasis on key worker housing in addition to, and not instead of, more social rented homes.
Housing need, reform of land compensation, grant funding
The committee asked whether we agreed that 150,000 new homes are needed each year, at a cost of £12.8bn per annum, and how funding for this should be delivered. H4SW as a group support these figures. I highlighted that in our region alone calculations show that 42,000 new homes are needed annually and that 15,000 of those need to be affordable – about 1 in 10 of the country’s needs.
I pointed out that the cross-subsidy model was adopted not because housing associations were trying to be commercial entities, but because at that time they needed to innovate in order to deliver homes. The model enabled H4SW members to continue to build social housing and regenerate estates at a time when there was almost no grant. However to meet the large number of homes that we need in the future, an increase and longer-term commitment of government grant is of central importance.
On the cost of land, I stated that in the South West land represents around 30-40% of development costs. I suggested a number of opportunities for reform, including setting a minimum acceptable percentage of affordable housing on sites – around 25% in the South West. If there were a minimum acceptable level, land prices would be adjusted to accommodate it.
Planning system, local plans, planning fees
MPs asked what changes should be made to the planning system to encourage the development of more affordable housing, especially for social rent.
Our view is that priority in the planning system for 100% affordable housing schemes would be helpful. Submissions should be given priority if they offer more affordable housing than the local plan demands and, together with establishing an acceptable minimum level of affordable housing for every scheme, this would help make the step change needed.
I also stated that the absence of an agreement about overall local housing need, through missing or out-of-date Local Plans, can sometimes be a barrier to development and I called for the introduction of simplification and standardisation tools which make it easier without making it ambiguous – ambiguity can be used as a loophole.
On increasing planning fees, I agreed thatfees are not providing the level of resourcing needed in planning departments. None of the 11 housing associations that make up H4SW would deny local authorities the opportunity to provide the best quality planning service and as such would be prepared to pay for it.
Right to Buy
On the question of whether the Right to Buy system needs reform, I reiterated our support for tenants who want to buy their own home. However there is no doubt that Right to Buy has exacerbated the housing crisis.
The key issue is that Right to Buy receipts are not ring-fenced for the re-provision of social housing and this should be the starting point for any reform. In our view it should be up to local authorities to consider whether they want to suspend Right to Buy, but government could also seek to harmonise RTB discounts with that of RTA, which is much less generous. It could also increase the clawback on the re-sale of the home or increase the qualifying period for the full discount; there are a number of possible levers.
Local authorities, market competition, for-profit housing associations
MPs asked what the impact would be of local authorities starting to build new homes themselves, and whether this would lead to competition between local authorities and housing associations.
I responded that new entrants should be welcomed into the market. We all share a common vision about providing good quality long-term affordable housing in sustainable places, and there are many opportunities for us to work in partnership. On for-profit providers, our view is that anyone contributing is a good thing, and those providers tend to go after a different market than housing associations.
It was clear from the questions asked that MPs on the Committee do understand the challenges and barriers to the provision of new affordable housing. I hope they will take the evidence of the many witnesses who will appear before this Committee and will include the changes asked for in their recommendations to Government, so that we can really start to ramp up delivery in all parts of the UK.