Councils ‘need more powers to increase housing supply’

25 Jun 18

Councils must be given new compulsory purchase order and borrowing powers to buy and develop land for housing, the Onward think-tank has recommended.

The centre-right think-tank launched recently to focus on issues affecting the working and lower middle classes in provincial areas and today issued its first major policy report.

Written by Neil O’Brien, Conservative MP for Harborough and a former adviser to Theresa May and George Osborne, the Green, pleasant and affordable report argues for a “fundamentally new approach” to housing supply and demand.

It highlighted a dramatic rise in the cost of renting, up from 10% of income in most of the country in the 1960s-1980s to more than 30% now. In London, renters typically spend more than 40% of their income on rent.

Meanwhile, the growth of the buy-to-let rental market has locked 2.2 million families out of owning their own homes and increasing numbers of those aged 18-30 live with their parents.

Current arrangements benefit large developers and landowners most, with many large developments green lighted without any requirement to contribute to the wider community.

Seven per cent of developments of over 1,000 homes had no developer contributions charged on them in 2016-17, while for developments of between 100 and 999 homes, 26% made no contributions, the report said.

Policy remedies put forward by Onward included more building in cities, passing city authorities the requisite powers to increase density and provide the necessary transport links.

Councils should also be incentivised for to plan for the long term.

Those that do, should be rated “outstanding” and exempt from Planning Inspectorate rulings.

Section 106 legislation, which governs agreements between local authorities and developers, should be relaxed to remove constraints on what councils can charge.

Meanwhile, central government controls on how Section 106 receipts are spent should be scrapped to give councils flexibility to benefit residents more directly through, for example, landscaping projects or payment for disruption.

The report also called for property tax to be reformed to discourage investment in property as a speculative asset and a major house building programme focused on younger people offering help with deposits and discounted rents.

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