For the Past three months the sector has been holding its breath, waiting to see what measures Kate Barker would recommend to boost housing supply. Her report, delivered on Wednesday, does not disappoint – and neither, to everyone's surprise, did Gordon Brown, who on the same day pledged more money for social housing.
Barker once more makes it clear that it is unacceptable to build at the current historically low levels, unless "we are prepared to accept increasing problems of homelessness, declining affordability and social division". Included in her prognosis is the need for at least an extra 17,000 affordable homes every year just to meet the new demand – 23,000 are needed to tackle the backlog.

There is welcome acknowledgement of the problem right to buy has created and a suggestion to replace it with a scheme for tenants to buy stakes in their homes, while retaining the houses in the public sector.

But the main thrust of the report confronts the root of the supply problem that has led to the fall in new homes generally: land supply, cumbersome planning and nimbyism. Barker sensibly recommends that the two fiefdoms of housing and planning come together at the regional level. It's crazy for regional housing boards to be following one agenda, while those in planning are following another. This has met with the chancellor's approval and is one of the few recommendations taken up in his Budget.

Brown has agreed to consult on the introduction of a land tax. Housebuilders, of course, throw their hands up in horror, arguing that it will lead to fewer developments. Given their record profits, it's hard to take their plight too seriously, though how this tax would work in conjunction with section 106 would need to be carefully thrashed out.

Those price hikes that have taken homes out of reach of many have been good for the Treasury

Barker also comes up with ideas to take the politics out of planning approvals, notably getting regional planning executives to set the goalposts and offer advice – a foil to nimbyism – and the formation of more urban development corporations. There must, though, be a limit to this approach, if we are not to become a nation of quangos.

Whether the rate of social housebuilding can be increased to the level Barker recommends will inevitably come down to money – £1.2bn to build 17,000 new homes or £1.6bn to build 23,000. It is unlikely that all of this would come from the public purse. The chancellor's generosity is likely to come with more demands for efficiency and for housing associations to use their cash surpluses – along with measures to ensure greater private sector involvement.

It's perhaps worth reflecting though that those very same prices hikes that have taken homes out of reach of many, have been good for the Treasury. Stamp duty alone reached £3.6bn in 2002/3. There have also been increases in inheritance tax and capital gains tax on residential properties. And, as we reported last week, £23bn has been raised over the past 20 years by the sale of council houses of which perhaps £8bn has gone into housing.

Source

Housing Today