Housing associations could sell tenanted properties to pension funds or private companies to create a new form of intermediate tenure under proposals published this week.
Building More Homes, a pamphlet from right-wing think tank Politeia, argued that tax breaks would allow the new owners of privatised property to rent homes to key workers at below-market levels.

The report’s authors – property developer Crispin Kelly and Daily Telegraph journalist Richard Ehrman – believe this would break down what they called the not-for-profit sector’s “monopoly” on providing intermediate rented homes.

The pamphlet also proposed tax incentives for individuals who want to buy to let in the affordable rental sector, an approach it said had worked well in the USA.

Kelly said: “The constant grouping of affordable housing and key workers is not healthy. Why just subsidise one type of housing? We want to loosen up the system, bring in more provision and broaden tenants’ choice base.”

But observers pointed out that the government has previously ruled out tax breaks to stimulate investment in the residential rented sector, and that the private sector is more comfortable investing at arm’s length.

Julian Ashby, managing director of consultant Hacas Chapman Hendy, said: “The use of tax breaks to stimulate provision of housing is a possibility, but at the moment the Treasury seems to see paying out grants as a more effective route. I expect tenants would be concerned about ownership being outside the not-for-profit sector, and not regulated by the Housing Corporation.”

Sales to private organisations would need Housing Corporation approval, which Ashby felt was unlikely to be granted under current transfer rules.

Peter Williams, deputy director general of the Council of Mortgage Lenders, said: “Tax breaks fuel profit, and the government has directed its spending at the not-for-profit sector. Although its efforts through the Housing Corporation are less than the market needs, they probably get more output for their money through housing associations. The private sector would have to demonstrate they can produce more cost-effectively.”

The Politeia report also proposes releasing 60,000 ha of agricultural land in the M25 region, most of it designated as green belt, for housing development. The authors argue that this makes more sense than the Communities Plan’s focus on the four housing growth areas.

Source

Housing Today