Give cities a stronger role in housing, says IPPR

8 May 12
English city councils should be given more powers over housing to enable them to play a greater role in the supply of new and decent homes, the Institute for Public Policy Research said today.

By Richard Johnstone | 8 May 2012

English city councils should be given more powers over housing to enable them to play a greater role in the supply of new and decent homes, the Institute for Public Policy Research said today.

Council housing SHUTTERSTOCK

In two reports, examining housing in London and Bradford, the think-tank recommended that housing benefit be localised to councils, allowing it to be set for local market conditions.

Affordable capital? Housing in London said the capital city had the most overcrowded households of any English region, with 220,000 classified as such.

The report called on the newly re-elected London mayor Boris Johnson to show ‘real leadership’ to tackle the capital’s housing issues.

The mayor should introduce ‘reasonable regulation’ of the private rented sector, including ‘exploring the idea’ of setting maximum rents. A London rent stabilisation board should also be created to stop ‘unreasonable’ rent rises, and the Greater London Authority should release more public land for development.

IPPR senior research fellow Andy Hull said that the capital faced acrisis of affordability, for buyers and renters alike’.

He said: ‘London’s sheer scale and its particular economics mean that national housing policies frequently do not fit with the reality of housing in London and have a distorted impact on those who live in the city. London’s mayor can use his office and its strategic role in relation to London’s 32 boroughs in ways that would be unthinkable or unworkable elsewhere in the UK.’

Hull said that the housing shortage was ‘exacerbated by the rest of the UK’s reluctance to fund housing benefit costs in the capital’, with families whose housing benefit was now capped likely to struggle to find affordable alternatives.

He added: ‘The mayor should be able to determine how housing benefit is allocated across London and set the relevant limits in line with prevailing market and economic conditions.’

Today’s research also revealed that Bradford is the most ‘economically polarised’ place in England, with the biggest gap between the most and least deprived areas of any council.

Alike in dignity? Housing in Bradford said Bradford Metropolitan District Council needed control of housing benefit alongside new investment for homes and agreements with landlords.

Without action, the gap between the housing ‘haves’ and ‘have nots’ will persist, IPPR North researcher Jenni Viitanen said.

She added that the council had shown a ‘can-do’ attitude in leading economic development in the district. It was increasing housing supply by bringing empty homes back into use, as well as new build, which could be further helped by the Treasury changing tax rules to encourage residential developments.

But there were ‘major challenges to be overcome’, she added.

‘Housing benefit reforms, particularly in the private rented sector, will have an amplified impact in Bradford, hitting young people and large families hardest.

‘This, combined with the Universal Credit, poses a serious threat to many housing associations across the north of England.’

The IPPR reports follow one on England’s housing shortfall, published yesterday by the Commons’ communities & local government select committee.

The committee called for government action across a ‘basket of measures’ to improve funding for new homes, including allowing local authorities to borrow more.

Councils are subject to caps on housing-related borrowing, which is set at the level of debt they took on as part of the reforms to the Housing Revenue Account system. This change, introduced last month, led to councils becoming self-financing for funding council homes.

However, the committee concluded that local authorities might struggle to ‘fulfil their potential’ to provide homes because of this central constraint.

Launching the report, committee chair Clive Betts said: ‘For decades, successive governments have failed to deliver sufficient homes to meet demand. The country faces a significant housing shortfall, and the financial crisis has amplified the problem. 232,000 new households are forming each year in England, and yet last year fewer than 110,000 new homes were completed.

‘There is no “silver bullet”. We have to muster all the resources we can. The government’s housing strategy has made a useful start and we hope many of its measures will provide a stimulus over the short to medium term. But we need more action if we are to see significant long-term improvement in housing supply.'


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