Monday, January 22, 2018
Public investment in housing is key to recovery and social justice
I have written here before about the need for a major government investment in social housing if we are to deal with rising waiting lists and also provide a stimulus to the economy. I am pleased to say that this approach has once more been endorsed by a cross-party committee of MPs.
As the Guardian reports, the House of Commons Treasury Committee has urged the government to lift a cap on the amount of money councils can borrow to build homes. They believe that the Chancellor of the Exchequer did not go far enough when he used his autumn budget to increase the borrowing cap for councils in some areas to £1bn. They want the cap removed, or at least that it is made clearer which areas could seek the higher limit.
They were also sceptical about Hammond’s most high-profile housing measure in the budget: the abolition of stamp duty for first-time buyers on the first £300,000 of any property costing up to £500,000, which the Office for Budget Responsibility (OBR) forecasts will help 3,500 extra buyers at a cost of £3bn.
The committee said: “In isolation, the reduction in stamp duty is likely to increase prices for first time buyers by as much, if not more, than the amount they will save as a result of the reduction in stamp duty”:
More than 217,000 new homes were built across the UK in the year to April 2017 – 15% more than in the previous year but well short of the government’s target of 300,000 a year.
Nicky Morgan, the Conservative MP and former education secretary who chairs the Treasury committee, said the government was struggling to meet its aspirations on housing.
“The chancellor pledged to fix the broken housing market, but the government is going to find it very difficult to meet this ambition. The increase in the cap on borrowing for local authorities to build homes is a step in the right direction, but it doesn’t go far enough,” she said.
“The borrowing cap restricts the number of homes that local authorities could deliver. To achieve the government target of 300,000 new homes per year, the cap should be abolished. The potential of local authorities to build should be unleashed.”
This is absolutely right. Without a local authority led building boom, we will never recover the ground necessary to meet the country's housing needs, whilst those who cannot afford to get on the housing ladder will be left without adequate and affordable accommodation.
As the Guardian reports, the House of Commons Treasury Committee has urged the government to lift a cap on the amount of money councils can borrow to build homes. They believe that the Chancellor of the Exchequer did not go far enough when he used his autumn budget to increase the borrowing cap for councils in some areas to £1bn. They want the cap removed, or at least that it is made clearer which areas could seek the higher limit.
They were also sceptical about Hammond’s most high-profile housing measure in the budget: the abolition of stamp duty for first-time buyers on the first £300,000 of any property costing up to £500,000, which the Office for Budget Responsibility (OBR) forecasts will help 3,500 extra buyers at a cost of £3bn.
The committee said: “In isolation, the reduction in stamp duty is likely to increase prices for first time buyers by as much, if not more, than the amount they will save as a result of the reduction in stamp duty”:
More than 217,000 new homes were built across the UK in the year to April 2017 – 15% more than in the previous year but well short of the government’s target of 300,000 a year.
Nicky Morgan, the Conservative MP and former education secretary who chairs the Treasury committee, said the government was struggling to meet its aspirations on housing.
“The chancellor pledged to fix the broken housing market, but the government is going to find it very difficult to meet this ambition. The increase in the cap on borrowing for local authorities to build homes is a step in the right direction, but it doesn’t go far enough,” she said.
“The borrowing cap restricts the number of homes that local authorities could deliver. To achieve the government target of 300,000 new homes per year, the cap should be abolished. The potential of local authorities to build should be unleashed.”
This is absolutely right. Without a local authority led building boom, we will never recover the ground necessary to meet the country's housing needs, whilst those who cannot afford to get on the housing ladder will be left without adequate and affordable accommodation.
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Yes, abolish the cap.The Government should stop thinking as Conservatives and come into the modern world. WHY DO WE NOT HER MORE ABOUT MODULAR HOUSING.Cheaper to build and develop. They are NOT prefabs. They are built all over the world. With the collapse of Carlillion (forgotten how to spell it) surely the door is open to smaller companies to take up the slack. Old models of production die and other systems take their place.The party should learn about modular systems from abroad and create a new strategy and not live in the past
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