How to help local authorities build homes

The announcement this week by the Conservatives to help councils and housing associations build thousands of new homes, including offering councils more money if they can demonstrate need, allowing them to borrow more, and changing the prohibitive rules that mean councils must purchase land at market value - if they win the election of course - is welcome news.
 
Curiously, few people have mentioned the route that built hundreds of thousands of homes each year throughout the post-war period until the late 1970s:  restoring the responsibility of councils to build their own housing. In terms of sheer numbers of houses built, the decades from the 1940s to the 1970s were a golden age - 425,000 houses were built in 1968 alone. Compare that to 2015/16, when Britain, with a far bigger population to house, build just 190,000. Recent figures showed fewer affordable homes had been built in the past year than any time in the past 24 years, while there was a 52% fall in the supply of new homes in just 12 months
 
Councils will be allowed to sell off a proportion of the new homes under the Right to Buy scheme and use the proceeds to build more council housing.  Again, this is promising: a contributing factor to the current housing crisis is the Right to Buy legislation of the Thatcher years not being matched by replacement building of affordable and social housing. The charity Shelter revealed in 2015 that a third of councils in England had not replaced a single home sold through the Right to Buy scheme since 2012. Despite those warnings, as recently as March this year it was revealed councils have been forced to pay more than £800m from Right to Buy sales to the Treasury over the past five years when the money could have been used to build over 12,000 additional council properties – almost double the number actually built since 2012.
 
The will among some councils certainly seems to exist. Last year 38 councils set up their own housing company. Camden council paved the way as a housebuilder, launching new homes for sale on the open market under its own name. In November, it launched over 250 flats at King’s Cross Maiden Lane Estate, with plans for over 3,000 new homes across the borough, including Bloombsury and Holborn as well as King’s Cross. Although prices were in the neighbourhood of half-a-million, shared-ownership options are also available. Camden is blazing a further trail, using its new Community Investment Programme to sell land and bulldoze old estates to raise more than £1bn with profits from private sales put back into neighbourhoods, with 3,000 new low-cost homes planned.

In March this year it was revealed councils have been forced to pay more than £800m from Right to Buy sales to the Treasury over the past five years when the money could have been used to build over 12,000 additional council properties

Another leader is Hackney, with a borough-wide 2,760-home estate regeneration programme, one of London’s largest programmes of building homes for social renting, shared ownership and private sale. The idea of council-owned housing companies is also growing in popularity in boroughs including Newham, Ealing and Greenwich. And it’s not just London where local authorities are springing into action; the Sheffield Housing Company (SHC) is partnering with contractors to build low-cost homes for first-time buyers and families alongside houses and flats for rent at affordable prices and offering better protection for tenants.
 
There are other tools that can help councils in their building ambitions too. As they are subject to OJEU regulations for procuring projects, the Building Schools for the Future (BSF) framework (set up for large scale school builds in areas all across the country under the previous Labour government) provides a ready-made delivery vehicle that has already gone through OJEU. In Hackney, for example, it is being used to build two schools but also significant residential developments. Areas around competitive bidding, private sector skills, access to contracting organisations and developers who may be interested in investing early in a project, along with other mechanics of a big build are contained within the framework.
 
The PPP model has been off the housing agenda for a while, but must inevitably make a comeback under these current circumstances. This would allow councils to roll out PRS models of housebuilding even more effectively than the private sector, as they can use joint ventures and will have improved access to land under the new Conservative proposals.
 
Other welcome additions would be to change the “use class” associated with PRS, as currently when you go to planning you are effectively up against similar private for-sale models which are not necessarily appropriate. If building affordable homes is the objective, then a different use class would definitely help.
 
It is time for central government to make some sensible changes and ensure the impetus shown by the likes of Camden and Hackney is able to be seized on by other enterprising councils across the land. This could be the road out of Britain’s housing crisis, once and for all. 

Mark Leeson is director of design at McBains Cooper