By David Williams
10 August 2010
Government plans to encourage home building have been broadly welcomed – but doubts remain about whether the reforms are enough to meet the UK’s rising demand for housing.
Local government minister GrantShapps yesterday outlined plans for a New Homes Bonus. He proposes that central government match a local authority’s council tax income for six years for each new property built in its area.
Exactly how the scheme would work has not yet been set out in detail, but the Departmentfor Communities and Local Government expects it to be in place ‘early in the [next] Spending Review period’, which begins in 2011/12.
Shapps said the measure would kick-start home building, which has slumped due to the recession.
The coalition government scrapped regional building targets last month.
Caroline Davey, deputy director of policy and campaigns at the housing charity Shelter, said the initiative was ‘welcome recognition of the urgent need to increase the supply of affordable new homes’.
But she added that the bonus was not enough to solve the homes shortage, which has resulted in 1.8 million households waiting for social housing. Davey said it was ‘vital’ that the government prioritises housing investment in this autumn’s Comprehensive Spending Review.
A senior council housing figure welcomed Shapps’ reforms in principle but warned that they might encourage the wrong sort of building. Councils get more money from many one-bedroom flats than from a smaller number of family homes, where the need to build is greatest.
Abigail Davies, head of policy at the Chartered Institute of Housing, said the bonus might encourage development because councils would not want to miss out on the available cash.
But, she added: ‘I’m not sure the impact will be any different from regional targets… and as an incentive it won’t be hugely effective in areas where it needs to be effective.’
