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Affordable Housing

Comment 3rd August 2010

The current arrangement under S106 of the Town and country legislation for provision of affordable house does not work.  Fewer and fewer housing is built which is affordable.  In addition, where it is built, it only replaces units which are sold by housing associations and councils – just look at the auction lists.

In london, there are over 30,000 units which have been empty for more than one year which require repairs (Empty property Registers).  One council estimates that an average cost of repair and bring back to use is £27,000 per unit.  For a new unit the taxpayer pays around £70000 per unit.  So it does not make sense to allow RSLs etc to sell old units requiring repairs and than ask the state to grant aid £70,000 to buy new units. 

For council or social housing needing repairs, we should introducing a scheme where people on waiting lists are allowed to occupy and encouraged to carry out the works in a rent free period (works well in the private sector).

The current system discourages people who want to build social housing from doing so as Council;s insist that social housing can only be provided by a registered social landlord.  A large amount of social housing has come from business or people who want to use their wealth for the weakest in society.    it discourages today's rowntrees, peabody etc.

Since 2007 the market value of housing has dropped by 30%.  this was incidently the discount for affordable housing in 2007 i.e. the cost of land was excluded in the purchase cost of the affordable housing unit.  Today, the same property is available at the discounted price.

Removal of (or suspension) of affordable housing requirements, will encourage the building industry to re-start, providing both jobs and homes.

The government would be better off applying a permissions levy of say £80 per sq.m – it will release around £22-£30bn which can be used to buy up private sector housing or build new ones on council owned land.




Why does this matter?

It is important because

a) will restart the housing /building industry

b) it will force local authorities to use their resources to upgrade existing homes and bring back into use empty property – boosting the local building industry.

c) provide more decent homes for local people

d) will reduce the cost of the administration of S106 – there is no need for S106 monitoring officers  – reduce by around £30m per year including fees charged by lawyers. this money should be used at the front end to encourage tenants to look after their own homes – delivering real localism.

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