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9 March 2009
Inadequate housing supply creates a number of highly damaging problems – economically and socially. This year new housing output may be down to a post war low of 80,000 new homes or less. This is just one third of the Government’s annual target.
The obvious implication of the very low levels of housebuilding expected over the next few years is that the supply/demand imbalance, which already existed before the credit crunch, will substantially worsen. This has significant consequences not just for those people who cannot find a decent home to live in, but for all of us.
The fact that so many developments are not starting means Section 106 planning contributions are not happening either. A lot of infrastructure will not be delivered including roads and public transport initiatives, schools, libraries and social and community facilities.
EC Harris’ recent report estimates local authorities benefited to the tune of £9billion from Section 106 planning contributions in the financial year to March 2008. This is predicted to fall to £3billion this year and £2billion next year. This is putting a real strain on council budgets and it is likely that central Government will be asked to fill the funding gap.
Affordable housing contributions have constituted around half the total value of planning obligations secured in England in recent years. Given that local authority waiting lists rose to 1.77 million households by April 2008, affordable housing is a priority. However, the call last week by the 2020 Group to spend £6bn on social rented accommodation is a rather short-sighted solution to a much wider problem.
If we are to tackle the current undersupply of housing resulting from the wider economic downturn, a balanced range of initiatives aimed at kick-starting the construction of housing of all types and tenures is required, resulting in long-term solutions. We need a comprehensive approach to the housing crisis rather than a narrow, short-term mono-tenure focus which is likely to create adverse social consequences.
Finally, no blog post would be complete without a plea to improve the planning system. As the editorial in the FT pointed out on 24 February ‘a significant part of British housing costs comes from the country’s unnecessary labyrinthine and capricious planning process. Liberalising planning must remain the central objective of British housing policy.’ The recent Killian Pretty Review produced many practical ideas for a more efficient and effective planning regime. These should be implemented as soon as possible.
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Information correct as at 09/03/2009