A new emphasis on homes for lower income households and a clear warning that ministers will push through planning applications where councils fail to identify enough land for housebuilding lay at the heart of the government’s housing green paper on Monday.
The consultative document outlines plans to increase shared ownership and shared equity for those who want to get a foot on the housing ladder, but it placed more emphasis on affordable housing for those on lower incomes.
Yvette Cooper, the housing minister, said the government wanted to build at least 70,000 affordable homes by 2010 – including a doubling to 45,000 in the number of new social homes a year. The green paper also hints at a return to direct building by councils “where it provides value for money”.
Some £8bn will be invested in affordable housing over the three years of the next comprehensive spending review – a £3bn rise over the current spending period.
But the target brought a stark warning from the National Housing Federation, which claimed the government had got its maths wrong.
“They need to invest £11.6bn, not the £8bn proposed in the green paper,” said David Orr, the federation’s chief executive. Attempting to squeeze 70,000 homes out of £8bn “could bankrupt the housing association sector within five years”, as it would not be able to support the borrowing needed to build them.
The paper confirms government targets of 2m new homes by 2016 and 3m by 2020. From next year a new housing and planning delivery grant will be dependent on councils identifying at least five years’ worth of sites for development, with another 10 years’ worth in plans.
The grant will be paid to those that meet their development timetables. But where councils have not identified enough land – and reject housing applications – “planning inspectors will be more likely to overturn their decisions”, the green paper says. Ms Cooper also warned she “will not hesitate” to use her powers to intervene in planning appeals and make decisions herself in order to increase land supply.
Private sector builders could also face penalties for not developing sites, in order to discourage land banking. The period for which planning permission remains valid has already been reduced from five to three years. But ministers are considering whether developers should be required to put in place much of the infrastructure for big housing developments faster than that, increasing the pressure to complete the development in order to get a return.
They will also consider whether accounting rules should be toughened to ensure more consistent disclosure of land holdings.
The Royal Institution of Chartered Surveyors said housebuilding targets would prove futile unless the infrastructure to support them was put in place, adding a warning that any use of flood plains would bring a big bill for flood defences.
The Local Government Association said moves to allow local authorities to build council houses again “would represent an historic break with the past”. But it, too, queried whether the £8bn investment in affordable housing was sufficient to hit the homes target.
Get alerts on UK house prices when a new story is published