17 February 2010
Affordable homes built by housing associations and other developers will be exempt from the Community Infrastructure Levy.
The decision was confirmed on February 15 as final regulations to enact the new tax – which councils in England and Wales will be able to levy on developments in their area from April – were laid before Parliament. The concession follows extensive lobbying by organisations such as the National Housing Federation, Shelter and the Chartered Institute of Housing.
The NHF described it as a victory that could potentially save housing associations millions of pounds and allow them to build more homes for social renting and low-cost ownership. NHF chief executive David Orr praised housing minister John Healey and officials at the Department for Communities and Local Government for listening to its concerns.
‘Development programmes will not be hampered by a new development tax that would have reduced their capacity to build,’ he said. ‘With house building this year slumping to the lowest level since 1923 and a record 4.5 million people stuck on housing waiting lists, this is good news not just for housing associations but for people waiting for a social home.’
A report published this week by the government’s National Housing and Planning Advice Unit showed that buying a first home is becoming increasingly unaffordable. As minimum deposits have risen during the past decade, the cost of renting privately has remained stable, says Housing affordability: a fuller picture, published on February 15.
The unit also announced three new indicators for assessing the cost of housing against household income: minimum deposits, mortgage costs and rents. At present, planners and other organisations merely compare income with house prices.
Neil McDonald, the unit’s chief executive, said: ‘A suite of measures is needed to reflect the realities of today’s housing market and to help plan for our future housing needs.’
