Government must use every lever at its disposal

Building more homes seems likely to be at the heart of the Budget later this month. It needs to be.


Differences between the Communities Secretary and the Chancellor simply must be resolved in the interests of building the homes we need – that is, enough homes that people can afford to live in.

In its White Paper earlier this year the Government admitted our housing market was broken.

The admission was late in coming and action following the consultation which ended in May has been painfully slow.

The shortage of housing is having a negative impact on people in all walks of life, from families on the living wage unable to live close to their workplace, to young people racking up debts to cover basic living costs.

That 20% of households now have to live in the private rented sector is an indictment of current policies.

The Government may now be on the verge of acknowledging the need to borrow more to invest in housing.

Their current insistence on prioritising private sector building largely for owner occupation shows they have missed a huge opportunity in the potential for council-led development.

In the last financial year, councils built only 1% of new homes when private developers built 82%.

Councils and housing associations can do far more to bridge the gap between the capacity of the private sector and public need.

There is no economic incentive for the private sector to address the housing supply problem.

Sadly, their business model depends on keeping demand high and they will only ever build the bare minimum of affordable homes. Far more government intervention (both at national and local levels) is essential to fill the gap left by the market.

Councils can be part of the solution and must be granted the capital-raising powers necessary to address housing demand locally.

The Government is forcing local authorities to sell council homes despite severe shortages in many areas.

Surely local authorities should be able to decide for themselves whether the Right to Buy should apply in their areas?

Current borrowing restrictions place a stranglehold on local council building that has left two thirds of local councils across England struggling to find social tenancies for homeless people.

It is generally agreed we need to build 300,000 new homes each year for the next decade to fully address the housing crisis. The last time 300,000 homes were built in one year, councils built 40% of them.

So, the Government must use every lever at its disposal, including requiring builders to use their existing permissions more quickly; encouraging smaller building companies back into the market; promoting offsite construction methods (which can be cheaper and faster); ensuring housing associations have sufficient income to invest in new stock; and prioritising brownfield development with grant regimes sufficient to remediate land.

Building more homes will not only help tackle the housing crisis, but it will also begin to address widening intergenerational inequalities.

To help under-30s get a foot on the housing ladder, Liberal Democrats are pushing for a policy package to cap rent deposits, provide government-backed loans for rent deposits and offer new “Rent to Own” homes where every monthly payment goes towards owning a house outright.

In recent years, public investment in housebuilding has declined while housing benefit costs have increased significantly as more and more people are forced into expensive private tenancies.

As a direct result, over a million households are left on council waiting lists.

I welcome the Government’s decision to drop plans to restrict local housing allowance rates but unless action is taken to build more social homes for rent, homelessness and government costs will continue to rise.