The Government needs to tackle “inherent problems at the heart of the planning system” to have any hope of reaching its ambitious goal of building 300,000 homes a year, an influential group of MPs has warned.
A report by the Public Accounts Committee released claims the Department for Housing does not have the mechanisms in place to achieve the target and urged ministers to set out their plans to boost building rates by October.
The number of new homes built has recovered from a dramatic slump following the financial crisis to 222,000 last year, but the 10-year average is still just 177,000.
LGA Housing spokesman, Cllr Martin Tett, said: "Latest figures show councils were only able to build 2,000 homes last year – the highest level since 1992 – but need to be able to do so much more. To help end the housing crisis, we need to kick-start a genuine renaissance in council house building.
“While it was good the Government accepted our call to scrap the Housing Revenue Account borrowing cap, it now needs to go further in the Spending Review by devolving Right to Buy so councils retain 100 per cent of their receipts and can set discounts locally, and allowing councils to set their own planning fees.
“The planning system is not a barrier to housebuilding – with councils approving nine in 10 applications, and hundreds of thousands of homes given planning permission but yet to be built.
“Councils are committed to building the homes that communities need and that are appropriate for the local environment. Local plans underpin the local democratic planning process and involve significant engagement and building of trust with a range of local partners and the community. However, they can be difficult and expensive to establish. Government needs to make it easier for councils to get up-to-date plans in place, by giving them sufficient funding and resources, and scrapping the policies, including permitted development rights, which allow developers to ignore community needs and undermine local plans.”
The Government needs to do more to remove the barriers to small to medium-sized (SME) house builders if its housing targets are to be met, says the Federation of Master Builders in response to the report.
Brian Berry, Chief Executive of the FMB, said: “SME house builders are continuing to face numerous barriers to increasing their capacity to build the homes that are needed.
"The recommendations in the Public Accounts Committee’s report highlight that the planning system is delaying progress. It is completely unacceptable that sites are being stalled because planning departments are not dealing with applications quickly enough. Our members aren’t seeing any improvements in service since fees were increased in January last year – a policy the FMB supported.
"Access to finance for SME house builders has undoubtedly improved over the last few years but the loan to cost ratio from most lenders is simply unviable for SMEs – especially the micro firms, building fewer than five units a year. The FMB House Builders’ Survey 2018 found respondents estimated that they could increase their out by 38 per cent if they could achieve a loan to value/cost ratio of 80 per cent. Government must work with the finance sector to understand how lending to small house builders can be increased and improved. The time is now for the Government to heed to warnings of the Public Accounts Committee.”
