UCL’s report on local authorities building homes lifts the lid on the barriers for councils building homes

Willmott Dixon has co-sponsored UCL’s latest in-depth report on local authority house building, which provides a wealth of insight and knowledge that lifts the lid on the barriers and opportunities for councils building homes.

It’s the most comprehensive look yet at motivations, means, methods and challenges facing local government housebuilding activity. While most councils directly engage in housing delivery, the reports highlights significant issues that prevent this being further scaled-up to meet much needed housing, particularly affordable homes.

According to UCL, there is “a growth in housing acquisition”, with 54% of councils saying they were buying back Right to Buy (RtB) properties, up from 40% in 2019. Four in 10 said they felt the current government policy allowing them to keep 100% of RTB receipts for two years will help them directly build more housing.

London boroughs, supported by the London mayor’s Affordable Homes Programme, are “still delivering more homes than other parts of England”. Over half of all councils (53%) reported that increased costs of retrofitting existing housing, due to fire safety or damp and mould, were impacting their plans to deliver new housing. However, just 7% of councils said the recent wave of local authority Section 114 notices had affected their plans.

To read UCL’s report, visit here

To read our response from David Atkinson, visit here

Recommendations to unlock and accelerate new housing include:

  • Increasing grant through the Affordable Housing Programme and providing longer-term fixing of lower rates of PWLB borrowing for local authority housebuilding.
  • Abolishing the Right to Buy in England, or at least restricting it to not apply to newly built homes for 15 years
  • Continue in the longer-term the 100% retention of Right to Buy receipts by local authorities for housing delivering
  • Better data capture by central government of the direct housing delivery activity by local government through all means and across all types and tenures of housing
  • Abolishing the First Homes programme with focus shifted to supporting genuinely affordable housing
  • Providing additional targeted funding to support retrofitting existing homes for safety, quality and energy efficiency. This will lead to longer-term savings, e.g. for healthcare
  • Councils need to be able to acquire land for housing delivery and there should be reversal of the CPO provisions in the 1961 Land Compensation Act to acquire land at existing use value
  • Local plans need to be able to identify sites for social housing, family housing and housing for older people to support their local economies rather than treating all housing tenures and types the same in allocations
  • Enhanced support from central government through ringfenced funds should be provided to increase capacity in planning and develop further skills in-house to supporting local authority housing development would also be helpful
  • Uncertainty over the new Infrastructure Levy is causing concern for many authorities given the significant role that Section 106 plays in the provision of affordable housing. Further clarification over the practicalities and implementation timetable for the IL would be helpful
  • Partnership work seems increasingly important but with some trust issues remaining. Homes England could have a role in disseminating best practice, including learning from case studies, to local authorities and private sector partners
  • Where councils are contributing to the delivery of homes through companies, JVs, enabling, acquisition, regeneration, master planning, advocacy, land and funding they need to demonstrate what contribution the council’s intervention is making to the overall supply of homes as their contribution is being overlooked by others in the sector and government
  • There are many ways to provide homes but a silo and separate departmental approach within councils does not appear to be the most supportive way to achieve greater delivery overall, and more integrated working (including planning teams) is important
  • Local authority budgets would benefit from some discussion and possible reconsideration with a wider cost benefit approach rather than charging market value for land to be used for social and affordable housing. There also needs to be an evaluation of the contribution of housing delivery to reducing the pressures on the temporary accommodation budget
  • While not being a total solution, the land and assets that councils own in the general fund and the HRA are an important component in their housing provision and only 30% of local authorities are shown as using this approach at present. This land needs to be considered for use for housing at other than market price
  • financial context issues such as increases in mortgage costs for purchasers affecting the supply of new homes
  • supply of private rented accommodation and inflation and housing benefit and rent matters.
  • Housing context issues such as concerns over non-decent homes, the need to house refugees and asylum seekers and increased concern with housing safety, retrofitting and the climate change have also evolved.
  • Planning reform continues apace including updates to the NPPF, discussion of housing targets and five-year housing land supplies, biodiversity net gain and nutrient neutrality rules, and changes to planning gain and viability appraisals.