“Labour would rip up definition of affordable housing, Corbyn says”

“A Labour government would rip up the government’s definition of affordable housing and instead bring in a measure linked to people’s incomes, Jeremy Corbyn will say on Thursday.

A report, Housing for the Many, accuses ministers of stretching the term affordable to breaking point to include homes let at up to 80% of market rents – more than £1,500 a month in some areas – and homes for sale up to £450,000. “It has become a deliberately malleable phrase, used to cover up a shift in government policy towards increasingly expensive and insecure homes,” it says.

The Labour leader and John Healey, the shadow housing secretary, set out the party’s plans to link affordability to people’s incomes on tenures including social rent, living rent and low-cost ownership, in the 40-page green paper, to be launched on Thursday.

Labour says one “common yardstick” is whether rent or a mortgage costs more than one-third of a household’s after-tax income.

The green paper says Labour is keen to help not just the poorest in society, but also “the ‘just coping’ class in Britain today who do the jobs we all rely on – IT workers, HGV drivers, joiners, warehouse managers, lab technicians, nurses, teaching assistants, call centre supervisors, shop staff. They are the backbone of the British economy and heart of our public services.”

Britain faces an acute housing affordability crisis, with around 1.7m private rented households currently paying more than a third of their income in rent and 1m owner-occupiers paying more than a third of their income on their mortgage.

Corbyn will say: “When housing has become a site of speculation for a wealthy few, leaving the many unable to access a decent, secure home, something has gone seriously wrong. We need to restore the principle that a decent home is a right owed to all, not a privilege for the few. And the only way to deliver on that right for everyone, regardless of income, is through social housing.”

The paper includes a series of other measures, including creating a new Department of Housing and an independent watchdog, along the lines of the Office for Budget Responsibility, to assess the government’s policies and ensure they are delivered.

A Labour government would also end the right to buy, which the Cameron government extended to cover tenants in social housing, risking the depletion of the supply of social housing. Labour would also lift the cap on borrowing by local authorities, to allow councils to build more social housing themselves.

A Conservative spokesperson said: “Labour would kick away the housing ladder from everyone living in council houses by taking away their right to buy, just as Labour did in Wales. Under the Conservatives, we are investing £9bn to build more good-quality homes that people can afford and have seen the highest number of new homes being built for a decade.”

Healey will say: “The housing market is broken and current Conservative housing policy is failing to fix it. We have to build more affordable homes to make homes more affordable.”

https://www.theguardian.com/politics/2018/apr/18/labour-would-rip-up-definition-of-affordable-housing-corbyn-says

Letwin explains rationing new builds to keep up prices with a new phrase “absorption rate”!

“A Government-commissioned report has blamed delays in the house-building process on builders concerns about future sale prices.

In the Autumn Budget the Chancellor set up an independent review to look at the delays between planning permission being granted, and houses being built. This review is being led by Sir Oliver Letwin.

The Treasury has now published the commission’s interim report alongside the Spring Statement:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/689430/Build_Out_Review_letter_to_Cx_and_Housing_SoS.pdf

These initial findings suggest that house-builders concerns about sale prices are a major factor in slow “build out” of homes on many of these larger developments.

Letwin says this review had initially focused on larger housing developments and major housebuilders. Further analysis may look at smaller scale models.

In a letter to the Chancellor and Sajid Javid – the secretary of state for housing communities and local government – Letwin says housebuilders have cited a number of “limitations”, including a shortage of available skilled labour, the availability of capital, provision of local transport infrastructure and the slow speed of installations by utility companies.

But in the interim report Letwin says: “I am not persuaded that these limitations are in fact the primary determinants of the speed of build out on large permitted sites at present.”

He goes on to say the fundamental driver of build out rates, once detailed planning permission is granted, appears to be the “absorption rate” – that is the rate at which newly constructed homes can be sold into the local market without materially disturbing the market price.

This rate, he says appears to be largely determined at present by the type of home being constructed and the pricing of the new homes built.

The interim report goes onto say this problem can be exacerbated by many larger development having a style of size of home that is fairly homogeneous.

The next stage of this review will look at whether build-out rates could be improved, either by reducing the reliance on large builders, or by encouraging them to offer more variety in terms of the type and price of property offered.

The report adds: “We have seen ample evidence from our site visits that the rate and completion of the ‘affordable ‘ and social rented’ homes is constrained by the requirement for cross-subsidy from the open market housing on the site.” This can delay the build out of these homes, the report adds.

Letwin says he plans to publish more detailed draft analysis by the end of June, which will contain a more detailed description of the problem and its causes.

The independent review will then seek comments from interested parties before a final analysis which will include a list of recommendations to improve the situation.”

https://www.mortgagestrategy.co.uk/interim-report-planning-delays-published-alongside-spring-statement/

Foreign money raised house prices 20% over 15 years

“House prices in Britain have soared by around 20 per cent in the past 15 years due to an influx of foreign money, according to a new study.
The research by King’s College London showed the average price is around £215,000 but would have been about £174,000 without the investment from overseas.

University researchers said the cash has also had a ‘trickle down’ effect to less expensive properties.

Money from abroad has impacted house prices mostly in the South East and major cities in the north, such as Liverpool, Leeds and Manchester.
But researchers warned there was no evidence the increase in foreign investment lead to an increase in housing building or in the share of vacant homes. …”

http://www.dailymail.co.uk/news/article-5543887/House-prices-rise-20-cent-15-years-pushed-influx-foreign-money.html

Help-to-buy: now the crunch comes (for some)

Help-to-buy gave interest-free loans of 20% of new house value (40% in London) for 5 years. After that, loan repayment (currently 1.75%) kicks in. That 20% or 40% of home value is still owned by the government and any increase in the home’s value results in increased charges at the year 5 point. Early adopters of this scheme are now reaching this 5 year point. The government’s loan repayments will be in addition to mortgage payments and will rise with the cost of living (and at the same time many mortgage rates may rise if or when the bank rate increases).

Some buyers who have seen big gains in property value may be able to trade up and pay off the loan, but anyone who has seen static value or even a fall (many new houses were over-priced) will be in trouble.

Those whose homes have not increased in value face “a ticking time bomb” according to the think-tank Resolution Foundation.

Wonder how Cranbrook residents who took advantage of the scheme feel now?

And was this consequence foreseen by government or borrowers?

Weasel words on affordable housing from the government’s minister

Sajid Javid faces battle over 4% affordable homes in Sainsbury’s scheme

“The housing secretary, Sajid Javid, is facing a legal challenge after he approved a 700-home housing scheme by the supermarket chain Sainsbury’s, which includes just 4% affordable housing.

The 29-storey development in Ilford, east London, will be built in a borough that has a stated policy that 50% of all new homes should be affordable. It estimates it needs an extra 15,000 affordable homes in the next 15 years, but Javid backed a scheme with just 27 affordable homes. The rest are expected to be sold for about £400,000 for a two bedroom flat.

The London mayor, Sadiq Khan, branded the approval “outrageous” and said 4% was a “disgraceful” contribution. Labour’s shadow housing secretary, John Healey, said it was “a clear case of ministers backing private developer profit over the homes that local people need”.

A local residents group Ilford Noise is now preparing to request a judicial review of the decision after Javid accepted Sainsbury’s claim that the scheme would not be viable with any more affordable units. Javid’s report concluded: “There is no good reason to dispute the agreed conclusions of the financial experts.”

The decision came just weeks after Javid gave a speech insisting it is “totally unacceptable” for developers to claim they cannot afford to meet affordable housing promises.

He said: “It cheats communities of much-needed housing and infrastructure and gives new development a bad name.”

But in this case, where Sainsbury’s never promised more than 4%, he has allowed the developer to hugely undershoot the local target. …”

https://www.theguardian.com/society/2018/mar/23/sajid-javid-faces-battle-over-4-affordable-homes-in-sainsburys-scheme

Helpers needed to drive forward Honiton’s neighbourhood plan

“Honiton Town Council and existing members of a steering group have been working together to formulate the town’s Neighbourhood Plan, a document which will enable residents to have a say on its future development.

A council spokesman said: “The aim is to work as a community to develop a plan which reflects the aspirations we all have for the future of Honiton.

“However, we now need a Chairperson and additional members of the Steering Group to lead and deliver the project for the benefit of the community.
“We are looking for a chairperson who is a collaborative leader, an effective communicator with project management experience who has the willingness, enthusiasm and time to devote to the whole project.”

No experience or qualifications are required, although anyone with knowledge of project management, town planning, community engagement and consultation and report writing will be warmly welcomed.

Additional information about the role of Chairperson and the Steering Group, including a person specification and job description, is available on request

Those interested in joining to help steer the group can contact deputy town clerk Heloise Marlow DeputyClerk@honiton.gov.uk

http://www.midweekherald.co.uk/news/chair-needed-to-help-complete-honiton-s-neighbourhood-plan-1-5445942

“Manchester council to publish files used to bypass affordable housing quotas”

“Manchester city council has voted to make public the secret documents used by developers to bypass affordable housing quotas.

Analysis by the Guardian earlier this month showed that developers behind almost 15,000 new homes given the green light by the council’s planning committee in the past two years all managed to avoid including any affordable housing in their developments.

In many cases, developers submitted confidential viability assessments to successfully argue that their projects would not go ahead if they were to offer even one flat for affordable rent or sale. Just 65 of the 14,667 units analysed by the Guardian made any concessions to affordability, being pitched as shared ownership properties.

Over the past year councillors on Manchester city council’s planning committee have become increasingly frustrated that they are being asked to approve huge new developments – some containing 1,500 market-rate, luxury apartments – without being able to scrutinise the viability assessments.

‘We said it wasn’t acceptable’: how Bristol is standing up to developers
On Wednesday councillors voted to require viability assessments for developments of more than 15 units where less than 20% of the development is affordable housing as part of the planning process and for these to be public.

After the unanimous vote, all information submitted for the documents (including commercially sensitive information) will also now be made available to members of the planning committee and other relevant members of the council in advance of determination of the planning decision.

The motion read: “This council notes that developers have often used viability assessments to avoid their obligations to provide affordable housing and where this happens, it can damage public confidence in the planning process. Labour councils in Greenwich, Bristol and Lambeth have improved transparency by making their viability assessments public. “This council believes that the developers who make money from building in our city have an obligation to make a fair contribution to providing affordable housing.”

Last November Bristol became the latest city to force developers to be transparent by publishing viability assessments. Bristol’s mayor, Marvin Rees, believes that it sends a signal to developers: “We’re a great city to do business in – but we want the right kind of money.”

https://www.theguardian.com/cities/2018/mar/21/manchester-council-to-publish-files-used-to-bypass-affordable-housing-quotas