27 July 2007
Ministers have bowed to pressure from councils and social landlords by pledging to nearly double the number of affordable homes built each year by the start of the next decade.
A total of £8bn will be spent on new affordable housing during the next three years, housing minister Yvette Cooper announced this week. This represents a £3bn increase on the current Comprehensive Spending Review period.
By 2010/11, at least 70,000 affordable homes will be built annually. Almost two thirds (45,000) will be social homes for rent – up from 28,000 this year – while the remainder will be sold to key workers and first-time buyers through low-cost ownership schemes.
But within hours of the figures being published in a green paper on July 23, both the Local Government Association and the National Housing Federation accused ministers of getting their sums wrong, claiming the true bill will be closer to £11.6bn.
NHF chief executive David Orr said: 'Attempting to meet the government's house building targets with this flawed financial modelling could bankrupt the housing association sector within five years.'
But Cooper told Public Finance later that £8bn was sufficient to build 180,000 homes over three years. 'The funding is clear: it's a large increase that will deliver 70,000 homes [per year] by the end of the review [period],' she said.
The extra affordable housing is part of a major increase in construction that will mean an extra 2 million homes built in England by 2016 and a further 1 million by 2020.
For the first time, towns and cities in the North can apply to be 'growth points' for new housing. 'Every region is seeing demand outstrip supply,' Cooper told the House of Commons.
Fourteen councils are setting up local housing companies with developers to initially build 35,000 homes on local authority land. A new housing and planning delivery grant is to be offered to councils which identify at least five years' worth of land for development.
But Sir Simon Milton, chair of the LGA, warned that government departments should provide the majority of sites for new homes. 'I don't believe that there is that amount of vacant land in the ownership of local authorities,' he said.
Cooper promised MPs that the green belt will be protected and new penalties introduced to deter 'land banking' by private developers. Where councils ignore Environment Agency advice over where to build, the government was willing to overturn local planning decisions.
'It's vital to take steps to protect communities from flooding and the consequences of climate change,' she told the Commons.
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