Road to recovery “rocky at best”, according to CIH
Thursday, 28 February, 2013
CIH has written to Chancellor George Osborne ahead of next month’s Budget urging him to adopt a four-point plan to deliver 100,000 new and refurbished homes for rent across the market and affordable rented sectors, creating £5.7bn of economic activity and supporting 24,000 jobs each year.
The measures are:
Introducing a Stamp Duty holiday for landlords bringing empty homes back into use as rented housing – this would support bringing 5,000 homes a year back into use through private investment of £50m a year, support 600 jobs a year and add £142m of value to our economy per year at a maximum cost to government of £12.5m per year;
Giving landlords the confidence to invest for the future by providing longer term certainty on rents in the affordable housing sector post April 2015 – creating the conditions for landlords to secure around £3bn a year of new private finance to invest in continued supply of new homes;
Amending local authority borrowing rules so they can invest more in developing new homes – releasing nearly £10bn of investment over five years, to build 15,000 homes a year, supporting 23,500 jobs a year and adding £5.6bn to our economy per year;
Increasing the Discretionary Housing Payments budget to £250m per year to better support the transition to the government’s welfare reform programme.
CIH chief executive Grainia Long said:
“The road to economic recovery is proving rocky at best and the government’s own figures show that housing starts dropped by 11 per cent in 2012, highlighting our inability to build the homes we so desperately need.
“But ministers have an opportunity to tackle both of these issues at once – these four measures would increase the housing industry’s ability to contribute to our national economic recovery while addressing an increasingly chronic shortage of affordable homes.
“We know government recognises the central role housing can play in creating growth – the measures in our four-point plan show concrete steps it can take to increase action on the ground.”
On Discretionary Housing Payments Grainia Long added:
“The welfare reforms being introduced in April are posing huge challenges for social landlords and tenants alike. The four London local authorities trialling the benefit cap report that their DHP resources stand at £8.2m but expect households affected by the cap to see rent shortfalls of £22.4m.
As the various reforms take effect, not all households will be able to respond immediately by moving to smaller or more affordable accommodation – there are simply not enough smaller homes available. Government should increase DHP funding to £250m per year for both 2013/14 and 2014/15 to allow the payments to play a more effective role in the transition to the new welfare regime.”