2 Sep 2010

Councils axe 100,000 planned homes in England

I’ve seen new figures showing that councils have pulled plans for around 100,000 new homes since the coalition government wrote to councils in July telling them to ignore previous government homebuilding targets.

The Communities Secretary Eric Pickles axed regional strategies put in place by the Labour government that aimed to build three million new homes in England by 2020.

Councils were instead told to draw up their own proposals for agreeing planning applications.

The government also scrapped the independent housing affordability watchdog, the National Housing and Planning Advice Unit (NHPAU).

Before its demise, the NHPAU had calculated that England needed to build 240,000 houses a year to meet demand. However due to the recession, just 123,000 were constructed last year.

In an exclusive interview, Peter Williams, the NHPAU’s chairman until July told me that he believed fewer homes will be built
in the future. “The likelihood is that we will see fewer homes being built and affordability pressures get worse,” he said. 

“The prospects for first time buyers look extremely difficult and not likely to get any better in the near future. Only better off first time buyers will get access to the market”.

Dr Williams referred as “high risk” the current government’s strategy of offering a New Home Bonus, a six-year council tax incentive to councils.

Letter from NHPAU to Housing Minister Grant Shapps

In a letter to housing minister Grant Shapps before the NHPAU was disbanded, Dr Williams warned that the UK faced an increasingly severe social and economic consequences and house prices will become less and less affordable with more dangerous booms and busts”.

The NHPAU suggested a house building target of over 300,000 per year was required: “getting back to the level of house building we saw before the recession is nowhere near enough. We need to deliver half as many again extra homes”.

Mr Pickles axed the NHPAU before it began the annual formal process of assessing England’s housing need. He had suggested that such targets were ‘soviet’.

However a study carried out for the National Housing Federation by Tetlow King suggested that councils had now pulled plans for 100,000 homes.

The figure includes: 9,600 cut by Bristol City Council,  3,000 cut by Exeter, 10,750 by North Somerset, and 9,200 by North Hertfordshire and Stevenage.

Jamie Sullivan of Tetlow King told me: “The overall reduction in housing targets will now be at least 95,000 since the Pickles letter”.

Mr Sullivan said Luton and South Bedfordshire had cut their targets by 10,000: “So it could be argued that the number of homes that will not now be planned for is around 100,000”.

But Housing Minister Grant Shapps argued that the Labour’s government approach using centrally set targets had not worked.

In a statement to Channel 4 News, he said: “Central housebuilding targets and regional spatial strategies don’t build homes. Under the previous Government the number of new homes being started slumped to the lowest levels since 1924.

“Top-down targets and bloated bureaucracy haven’t worked.

“Reviving a housebuilding market on its knees takes much more than pieces of paper from central government telling town halls what and when to build.

“That’s why we’ve pledged to give councils substantial extra funding if they build new homes through our New Homes Bonus. This will mean that they get significant financial benefits from building the homes their communities really need.

“We’re also giving struggling rural villages the chance to secure their long-term future and build new homes that locals can actually afford to live in through Community Right to Build scheme. And, despite tough economic times, we’ve managed to safeguard funding for thousands of new and affordable homes, which the last government had left unfunded.”