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If Cameron wanted to fix our housing crisis, he’d get councils building again

By Tom Roberts

David Cameron’s party conference speech will be best remembered for his pledge to turn ‘Generation Rent’ into ‘Generation Buy’. By allowing house builders to offer discount homes for sale (‘Starter Homes’) as part of their affordable housing contribution, the Prime Minister hopes to reverse a decade-and-a-half of falling homeownership.

He faces an uphill struggle: house prices are soaring, lending requirements are tighter, and wages until recently were stagnant. With rents eating up to half of people’s monthly income in some parts of the country, few first-time buyers have the money to save for a deposit.

Recognising the scale of the problem, the PM called for a national ‘crusade’ for housing. The government now talks of building one million homes by 2020. But reality is unlikely to live up to the rhetoric.

Yesterday’s Housing and Planning Bill revealed how the Conservatives intend to deliver a million new homes: permitted development rights on office-to-residential conversions will be permanently relaxed; automatic permission given ‘in principle’ to brownfield development; more support offered to small and self-builders and high value vacant assets sold to fund affordable housing.

The bulk of these measures are aimed at stimulating private development by removing obstacles in the planning system. But the truth is housing supply has failed to keep up with demand ever since local authorities stopped building. If Cameron genuinely wanted to fix our housing crisis, he’d get councils building again.

With record-low interest rates, councils would be able to pile on the debt to fund house building relatively inexpensively. Alternatively, the Community Infrastructure Levy could be expanded and reformed to help pay, with section 106 agreements abolished in return. Or, as the GLA has suggested, revenue from public land sales could be reinvested into residential development.

Regardless, once built, these new homes could then be flogged to pension funds, with an agreement to have set rents for low-income tenants for a multi-decade period, saving councils on management costs over the long-term.

True, it would represent a massive policy grab from Jeremy Corbyn, who Cameron denounced as ‘Britain-hating’ in his conference speech. But from the National Living Wage to the National Infrastructure Commission, the Tories have shown they are comfortable stealing Labour’s ideas when it suits.

Cameron could also claim inspiration from his political idol Harold Macmillan, who oversaw councils building hundreds of thousands of homes during his time as housing minister.

Granted, councils rebuilding would do little to stop falling homeownership. But ‘Generation Rent’ doesn’t need, or necessarily want, to buy. Surveys have found between a fifth and third of tenants value the flexibility renting brings, and don’t want to be tied down by a mortgage.

What ‘Generation Rent’ does need and want, is somewhere to live other than their parent’s house. And whether the home they rent is from a private landlord or council I’m sure is irrelevant.
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