More help for councils to build affordable houses

Saturday, October 27, 2007
11:30 AM

Ministers last night announced a new drive to deliver more affordable homes, as a report warned its building targets would not halt the deepening housing crisis.

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Ministers last night announced a new drive to deliver more affordable homes, as a report warned its building targets would not halt the deepening housing crisis.

It comes as a housing trust revealed that all of the affordable homes built in a £4million Norfolk development had been allocated before the scheme was officially opened.

Housing minister Yvette Cooper yesterday unveiled plans for cash boosts for councils to help them create the millions of new affordable homes.

Councils and communities working to deliver new houses will also have an extra £510m pot to share to help fund projects under the plans.

But the measures came amid fresh criticism of the government's building target, after a report by an independent advisory body said it was far too low.

The government has pledged to build 240,000 homes a year by 2016, which will equate to three million extra homes being built between now and 2020. But the National Housing and Planning Advice Unit (NHPAU) claimed the government should instead plan for 270,000 new homes each year.

If the government fails to act now, a whole generation could be denied the chance to get on the housing ladder because prices would continue to rocket, the report warned.

Government plans for 240,000 new homes would see house prices escalate from their current level of 7.1 times average earnings up to 9.1 times average earnings, it said.

If also claimed that house prices in the south west, south east and west of England could become worse than those in London by 2026 if regional assemblies do not adjust their building target.

The current regional spatial strategies are planning for 200,000 new homes a year.

But the NHPAU says this will mean average house prices in these areas rising to between 11 and 13 times people's earnings.

The latest figures show that in Norfolk 1,164 people are registered as homeless, while council housing waiting lists total 26,357.

South Norfolk MP Richard Bacon yesterday officially opened a development of 40 new affordable homes at Hingham, near Wymondham.

All the properties in the Lincoln Avenue development have already been allocated through South Norfolk Council and Saffron Housing Trust and the first tenants are expected to move in next week.

NHPAU chairman Professor Stephen Nickell said the housing supply had to increase further in the long term.

He said: "England is an aspirational, prosperous and growing nation and that means a demand for more housing.

"If we fail to act then a generation of buyers will be unable to get a foothold on the housing ladder, not just in London but across large swathes of England and current homeowners will not be able to move on to bigger and better homes."

David Orr, chief executive of the National Housing Federation, claimed the shortfall in affordable housing was a "national crisis" which would be solved only by a dramatic increase in house building.

Ms Cooper said the report made clear that the government's new housing target was a "major step" towards stabilising housing affordability.

The new measures will see councils receive a 1,100-per-dwelling-bonus, possibly rising to £5,000 by 2010/11.

Councils where the number of homes is increasing by more than 0.75pc a year of the total stock will qualify for the cash injections.

And only those committed to "robust" action to bring empty homes back into use, including the use of compulsory purchase orders, will be given access to the extra £510m pot of funding.