UK needs to build 300,000 homes a year to meet current housing shortfall

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The UK Government must lift its home building target by 50% and build 300,000 new homes each year to tackle the current housing crisis, according to a report from the House of Lords Economic Affairs Committee. The report suggests that local authorities and housing associations must be freed to build substantial numbers of homes for rent and for sale and points out that the current targets will fail to meet the demand for new homes or moderate the rate of house price increases. It also says that current policy is restricting local authorities' access to funding to build more social housing and creating uncertainty in the already dysfunctional housing market by frequent changes to tax rules and subsidies for house purchases, reductions in social rents, and the extension of the Right to Buy. All of these changes reduce the supply of homes for those who need low cost rental accommodation and a narrow focus on home ownership neglects those who rent their home, the report adds. The Committee makes wide-ranging recommendations to address the housing crisis, including charging council tax on development that is not completed quickly and not relying solely on private developers to meet the target which the report describes as misguided. Indeed, it points out that the private sector house building market is ‘oligopolistic’ with the eight largest builders building 50% of new homes and their business model is to restrict the volume of house building to maximise their profit margin. To address this the Committee recommends that local authorities are granted the power to levy council tax on developments that are not completed within a set time period. It also suggests that the Government must take decisive steps to build on the very substantial holdings of surplus publicly owned land and that a senior Cabinet minister should be given overall responsibility for identifying and coordinating the release of public land for housing, with a particular focus on providing low cost homes while the National Infrastructure Commission should oversee this process. It also wants local authorities to be given the power to increase planning fees. Local authorities should be able to set and vary planning fees to help fund a more efficient planning system and the upper cap on these charges should be much higher than the current limit. ‘We are facing an acute housing crisis with home ownership, and increasingly renting, being simply unaffordable for a great many people. The only way to address this is to increase supply. The country needs to build 300,000 homes a year for the foreseeable future,’ said Lord Hollick, Chairman of the Committee. ‘The private sector alone cannot deliver that. It has neither the ability nor motivation to do so. We need local government and housing associations to get back into the business of building,’ he pointed out. ‘Local authorities are keen to meet this challenge but they do not have the funds or the ability to borrow to embark on a… Taylor Scott International

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