House of Lords report delivers stinging rebuke of government housing policy

The House of Lords has damned government housing policy, branding both its 200,000 homes a year target and its efforts to meet it as inadequate.

A report by the Lords’ economic affairs committee, published on Friday, called on the government to target at least 300,000 new homes a year “for the foreseeable future”, arguing one million homes by 2020 “will not be enough”.

Peers also criticised the government’s failure to recognise its target could not be met by the private sector alone, arguing its ambitions could only be met by enabling local authorities and housing associations to meet the shortfall.

The report called on new prime minister Theresa May to reflect the importance of housing in her reshuffle by giving a senior cabinet minister responsibility for releasing public land for housing, while the National Infrastructure Commission should oversee delivery of housing on this land thereafter.

Other reforms called for include giving local authorities borrowing powers to fund social housing, greater flexibility on planning fees and the ability to financially penalise developments that are not completed within a set time period.

Full list of recommendations

The Government’s housing target

1.The Government’s target of one million new homes by 2020 is not based on a robust analysis. To address the housing crisis at least 300,000 new homes are needed annually for the foreseeable future. One million homes by 2020 will not be enough.

2.To achieve its target the Government must recognise the inability of the private sector, as currently incentivised, to build the number of homes needed.

3.The Government’s focus on home ownership neglects other tenures; those on the cusp of ownership are helped and those who need secure, low cost rental accommodation are not.

4.Local authorities and housing associations must be incentivised and enabled to make a much greater contribution to the overall supply of new housing. Without this contribution it will not be possible to build the number of new homes required. The likely reduction in the housing benefit bill over the long-term is a further reason to increase the supply of social housing.

Local authority building

5.The Government must ensure local authorities who wish to build social housing have access to the funds to do so. The current restrictions on the ability of local authorities to borrow to build social housing are arbitrary and anomalous. Local authorities should be able to borrow to build social housing as they can for other purposes.

6.We endorse the efforts of local authorities to innovate, cooperate and enter into partnership with others in the housing sector. We encourage local authorities to share their experience and expertise to ensure the proliferation of successful schemes.

Building on public land

7.A senior Cabinet minister must be given overall responsibility for identifying and coordinating the release of public land for housing, with a particular focus on providing low cost homes.

8.The number of new homes the Government expects to be built on public land by 2020 amounts to nearly one third of their housebuilding target. The Government should ask the National Infrastructure Commission to oversee the number of homes that are actually built on public land.

9.The release of public land provides a good opportunity to support the building of low cost homes and help smaller builders return to the market. The requirement to achieve best market value when releasing public land should be relaxed.

Planning reform

10.To incentivise local authorities and provide more resources for stretched planning departments, the Government should allow local authorities to set and vary planning fees in accordance with the needs of their local area.

11.There is a large gap between the number of planning permissions granted and the number of houses actually built. We recommend that local authorities are given the power to levy council tax on developments that are not completed within a set time period.

12.Overall, planning should be simpler, more transparent and more helpful to small builders.

Use of the existing housing stock

13.Council tax is regressive. The bands should be amended so that owners of more expensive properties contribute proportionally more than owners of less expensive properties. This should be done in a revenue neutral way.