"Fire sale" of public land fuelling housing crisis, says think tank
A "FIRE SALE" of public land for housebuilding is worsening the housing crisis because developers make the most of the windfall to build for the market rather than deliver affordable homes, a think tank has claimed.
Analysis of Government statistics by the New Economics Foundation (NEF) shows only 20 per cent of new homes to be built on public land sold in the last six months will be classified as affordable. Even this figure is optimistic, it added, because it uses the Government's own widely disputed definition of affordability.
As little as seven per cent of planned homes are likely to be social housing. In some cases, the NEF said, entire developments will comprise solely of luxury properties.
It is calling on Chancellor Philip Hammond to suspend the release of public sector land in next week's Budget.
"The Government’s fire sale of public land is failing by its own measure and making the housing crisis worse. This irresponsible approach is bringing to market a slow trickle of property that few can afford," said Alice Martin, the NEF's housing lead.
"Public land should be put to public use. The Budget is a chance for the Government to empower communities so they can help build the good quality, affordable homes we so desperately need."
Ministers pushed local authorities and other public sector bodies to release enough land for 100,000 homes between 2011 and 2015, and have set a target of selling off enough for another 150,000 by 2020.
However, MPs have sharply criticised DCLG's handling of land sales. In 2015, the Commons Public Accounts Committee said the department had no record of the number of homes built or under construction, the proceeds of sales or whether land was sold at market value.
Committee chair Meg Hillier described the programme as "wishful thinking dressed up as public policy".
The NEF said that halting the sell-off means the Government could instead empower communities themselves - along with local authorities, small builders and institutional investors like pension funds - to provide more affordable, better quality homes.
Based on previous research, it said that community-led affordable housebuilding projects on just 10 public sites due to be sold off could save £231m in housing benefit payments over 30 years.
These investments could start to make a return for the public purse within 20 years, it added, all while alleviating severe housing need across the country and putting communities in charge of their own housing provision.
"Homeownership is at its lowest levels since the 1980s as both house prices and social rents continue to rise faster than income growth," the NEF said.
"Government interventions to help first-time buyers have worsened the affordability crisis by inflating house prices by up to £8,250 per property.
"As most people cannot afford to buy now even with a mortgage, cash buyers such as second homeowners and buy-to-let landlords are propping up the market. By far the biggest portion of Government spending on housing goes on the housing benefit bill which costs £21bn each year. Meanwhile there are over 70,000 households in England living in temporary accommodation, up from 48,000 in 2011."