23 May 2008
Council house waiting lists could soar to more than 2 million households unless local authorities take a lead in tackling the housing crisis, ministers are being warned.
The figure could hit 2 million (equivalent to 5 million people) within two years, the Local Government Association claims in a stark analysis of the economic slowdown, Councils and the housing crisis.
A total of 1.6 million households (or 4 million people) are waiting for a council or housing association property – up from 1 million seven years ago, says the LGA report, published on May 16. An average of 90,000 households have joined the waiting list each year since 2001.
With repossessions rising and banks failing to pass interest rate cuts on to mortgage payers, demand for social housing is reaching unprecedented levels, the report says. Almost half of councils say their current allocations policy is inadequate to cope.
The LGA is calling for councils to be able to borrow on the open market in the same way as housing associations so that they can increase the stock of social homes. Finance rules should also be reformed to allow councils to remortgage their assets to fund house building, and authorities should be given more flexibility over where new housing is situated.
Paul Bettison, chair of the LGA's environment board, said councils will be required to pick up the pieces as banks struggle to assist would-be homeowners. 'Even when the economic good times were rolling, councils saw ever-increased pressure on their social housing stock,' he said. 'Now that the credit crunch is upon the country, it appears that many thousands more people will be looking to councils to provide them with a permanent home.'
Although councils can apply for development grants from the Housing Corporation, the vast majority of money goes to registered social landlords, some of which are struggling to secure new loans. Last week, it was announced that the corporation is to spend £200m buying homes from private developers.
Meanwhile, new research by the South East England Regional Assembly suggests that plans to increase house building by more than 50% will still leave the average home costing 9.6 times the average regional income by 2026, compared with 8.4 times in 2007. The assembly wants one-third of all new homes to be for social renting or shared ownership.
PFmay2008
