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As the Tories vie to win over Labour voters...

Discussion in 'Personal' started by Duke of York, Oct 10, 2015.

  1. Duke of York

    Duke of York Star commenter

    I thought you might be interested in this article from this week's Inside Housing.

    "The development of affordable rented housing is likely to decrease as private house builders seize on David Cameron’s new planning flexibility to build homes for sale.

    The prime minister announced builders will be allowed to provide Starter Homes instead of traditional affordable housing on private sites to satisfy Section 106 planning requirements.

    These homes – sold at a 20% discount on the market rate – would be sold directly by the developer, with no need for housing association involvement.

    Housing associations typically pay in the region of £65,000 to buy an affordable Section 106 unit from a developer – a figure easily dwarfed by the profit from a Starter Home. Around 40% of new homes built by associations last year came through Section 106 deals.

    A director at a major house builder, who preferred not to be named, said the policy change would “definitely mean an increase” in Starter Homes being built instead of affordable rented units under Section 106 deals. The Home Builders Federation welcomed the policy.

    Jonathan Higgs, chief executive of Raven Housing and vice chair of the Placeshapers group of more than 100 housing associations, said: “Traditionally our programmes have drawn very heavily from [Section 106].

    “Going forward housing associations will increasingly have to take the lead developer role and compete for development sites on the open market – which is of course going to be more difficult.”

    The reform follows the four-year 1% rent cut, announced in the July Budget, which had already seen housing associations reduce development plans and deliver more homes for sale rather than rent.

    Matt Cooney, chief executive of Asra, added: “There are always going to be people who can’t, even with help that the state is giving, afford to get on the housing ladder.

    “It is only going to make life harder for housing associations… You are taking away one of the fundamental planks of the affordable housing delivery programme.”

    Ian Munro, chief executive of New Charter, said: “We still want to provide affordable rented housing. We will use our own resources to do it, which will mean we will build fewer.”

    Under the changes, councils would be unable to insist developers provide affordable rented units or shared ownership in Section 106 deals. Mr Higgs added: “It would be a shame if local authorities were no longer able to decide how best to meet the housing need in their local area.”

    According to research by property consultancy Savills, seen exclusively by Inside Housing, a couple on a median income would struggle to afford a Starter Home in 48% of local authority areas – including the vast majority of southern England. Terrie Alafat, chief executive of the Chartered Institute of Housing, said: “What about people on lower incomes who can’t afford to buy, even with a 20% discount?”

    Philip Glanville, cabinet member for housing at Hackney Council, added: “Ultimately, it will push more homeless families into the hands of private landlords and push up the benefit bill.”

    Nice to know we're still all in it together, ain't it?
  2. maurice-r

    maurice-r Established commenter

    And how many private landlords are Tory voters, who will cash in at the taxpayers' expense?
  3. Duke of York

    Duke of York Star commenter

  4. lexus300

    lexus300 Star commenter

  5. BobbyPhilips

    BobbyPhilips Established commenter

    The price of property has increased. Borrowing money for property to rent is more expensive.
  6. Duke of York

    Duke of York Star commenter

    That might account for property which has been bought to let in the past three years, but why should the rents on property which was bought before that increase at that rate?
  7. BobbyPhilips

    BobbyPhilips Established commenter

    I don't know if they did.
  8. monicabilongame

    monicabilongame Star commenter

  9. lanokia

    lanokia Star commenter

    I remember when I rented in a house that the landlord had owned for many a year.

    As soon as he contractually could he raised the rent by £25.


    To keep up with other properties in the neighbourhood.
  10. Duke of York

    Duke of York Star commenter

    How can you be sure he wasn't one of the ones who were testing what the market could afford? If you'd moved as a consequence of the rent increase, he'd think again, but since the cost of doing so is prohibitive, you probably didn't, so the insidious manner that the cost of housing takes up a larger proportion of our income as each year passes and excludes more and more people from ever breaking the cycle by being able to afford to buy a home of their own, only serves to benefit the more wealthy among us.

    It's a scam. Nothing more.
  11. BobbyPhilips

    BobbyPhilips Established commenter

    So couples on average incomes can afford a home in these areas. Is 2*average rich now?
  12. Duke of York

    Duke of York Star commenter

    Not now that average incomes have been reduced by the proliferation of minimum wage jobs. I'm sure you can do the maths, Madge.
  13. BobbyPhilips

    BobbyPhilips Established commenter

    Yes now. 2*the average still exceeds £50k
  14. cally1980

    cally1980 Established commenter

    Average income is over 26k so 2 people on this income would exceed 50k. However, average household income is far lower than the 50k so in reality, not many households can afford these 'starter' homes. Those who can have probably already 'started'!
  15. BobbyPhilips

    BobbyPhilips Established commenter

    Although average household income is 40k; it has been conventional for many years for joint purchasers to both be working when buying a first home.
  16. lexus300

    lexus300 Star commenter

    DINK is now the average BP?
    "Blue-blue your world is blue".
  17. racroesus

    racroesus Star commenter

    How can you say that? Only the yellow areas will be affordable for some of those earning less than £50, 000. If they earn ~£52,000 they will not necessarily be able to afford a house in any of the red bits.
  18. BobbyPhilips

    BobbyPhilips Established commenter

    The no kids is your embellishment. Two incomes has been the norm for first-time buyers for many years .
  19. BobbyPhilips

    BobbyPhilips Established commenter

    The original illustration chose £50k to maximize negativity. It would need to be redrawn to illustrate the affordability using of 2* local average income.
  20. Duke of York

    Duke of York Star commenter

    Time was when it was possible to buy a house on a single income. Building societies would lend 2.5x the largest salary or with both partners working, 2.5x the largest and 0.5x the smaller. This restricted the prices that houses could be sold for, so it wasn't possible for house prices to increase at a rate more than wages did. De-regulation of the banks put paid to that, leaving us with the mess we now have. Is it beyond the wit of politicians to realise that regulation was in place for a good reason?
    monicabilongame likes this.

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