Private Rented Proposals will reduce Affordable Homes
The Governments review of the private rented housing market that is due to be published this week will if accepted by the coalition have a very significant impact on the availability of affordable homes to let and especially on the Northampton Borough Councils access to affordable homes for those on the waiting list.
The pressure on housing availability is well documented and no more so than in the recent report for the National Housing Association and details that in the UK we need to be building at least 250,000 homes a year to meet the growing and existing demand.
Just to put it into some kind of context only 98,000 homes were completed in the last year, a huge shortfall given the identified need and a clear indication that banks and financial institutions are still reluctant to invest in the construction industry.
What is going to cause the most concern in the rented homes review is the proposals to abolish the ‘affordable homes’ element in housing schemes where in Northampton developments over 15 homes require the developers to provide 35% of homes to be allocated for rent or shared ownership.
For the Borough Council this is an integral element in the authorities housing solutions and provides access to rented homes for local families who cannot afford the level asked when renting privately.
Northampton Borough Council with almost 8,000 people on its housing waiting list have already to their credit but to the dismay of many openly admitted that those who fall into categories outside of A and B will almost certainly never access council owned or allocated homes.
The impact of abolishing the ‘affordable homes’ element of new developments is said to have been proposed because developers will be ‘asked’ to guarantee that the properties will be let rather than sold, the problem is that if you were a developer building in excess of 2,000 homes in the Collingtree, Wotton, Hardingstone area of Northampton voluntarily agree that you would rent 700 of them and not recoup the money from sales?
and can you blame them especially when they have seen for the second time in 25 years the construction industry driven into recession through failing economic policies and a lack of investment.
Isn’t it understandable that they will want to rebuild their companies and bank balances as soon as they can and it is through sales of new homes not rentals that they will achieve it?
The other aspect of the private rented housing market review is the possibility that the ability of councils to place what is commonly known as section 106 agreements on developers will be waived if the developers agree to put homes into the rented sector. Developers may welcome this because at present S106 funding is provided along with the affordable homes quota and is used for a variety of projects such as community centres and play areas associated with the developments.
If the S106 is waived then who will provide the facilities for the people who live in the new developments, and more importantly for the S106 to be waived how many homes would the developer have to agree to put in the rented sector?
The reality is that the proposals will have a massive impact on the social housing available for rent which the Conservative – Liberal Democrat coalition are planning to mitigate by providing a government guarantee on bonds issued by a number of Housing Associations because even they recognise that under the proposals private developers will build fewer ‘affordable’ homes.
If that is confusing enough this has all got to be considered against the housing welfare reforms which still haven’t been clearly explained and which the Northampton Borough Council Housing department are having to deal with alongside trying to persuade the Councils 12,200 tenants that they would be better off having their landlord transferred from the Council to a Housing Association.
The announcement this week will unquestionably come under very close scrutiny and may well along with the changes in the National Planning Policy Framework have an impact on the West Northamptonshire Joint Core Strategy and the future nature of the expansion of Northampton, which if it accepted by Government will quite probably mean that amendments to the Core Strategy will have to be made before its adoption.