Social Housing Target To Rise By 20,000

Nearly half the extra 40,000 homes the government wants built each year will be social housing, the housing minister, Yvette Cooper, is expected to say today. The government is increasing its target from 200,000 a year to 240,000 a year by 2016 in an attempt to tackle the country’s affordable housing crisis.

{mosimage}As part of the proposals the property industry is also expecting a new 17.5% government equity loan, designed to make it easier for people to get on to the housing ladder by owning less than a fifth of a property.

Today’s proposals will be scrutinised by sections of the Labour party to see which controls on borrowing are to be relaxed to allow councils to build more homes. It is likely Ms Cooper will allow councils to keep more income from council rents.

The Chartered Institute of Housing has been commissioned to review the problems surrounding the supply of affordable housing. Two other reviews, by John Calcutt for the Department of Communities and Local Government, and by the Office of Fair Trading, are due to report in the autumn.

The Home Builders Federation warned that the problem lies with lack of planning permission being granted by councils. The government’s national housing and planning and advice unit has warned prices will be 10 times average earnings for the next generation unless supply increases.

The government announced this week that powers over building targets will be transferred to unelected regional development agencies, appointed by Whitehall. The shadow communities secretary, Eric Pickles, warned that local residents would be powerless to stop unsustainable development.