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How to get to one million homes – what lessons can we learn from our international partners

David Cowans

By David Cowans, Chief Executive of Places for People Group

Over the past three decades we have not built enough homes in the UK to meet demand. 

For example, DCLG's latest house building statistics released last month showed 139,690 homes were constructed in England in 2015/16.

As such we are still almost 60,000 behind the Government's pledge to build 200,000 homes a year and one million new homes over the lifetime of this Parliament.

However, to compensate for the shortfall in new housing delivery over a number of years, the TCPA estimates a need for 312,000 new units annually; meaning we are 170,000 homes behind their projections.

As a result, millions of people are locked out of home ownership, including the young and those on low incomes, while the lack of supply has increased the cost of renting and the cost of the Government's welfare bill. In 2014, almost twice the proportion of working households received housing benefit than in 2008-09.

With state funding in short supply and austerity the 'new normal', everyone agrees we must find ways to trigger investment, including finding additional sources of funding to help boost housing supply.

Crucially, we need to stop looking inwards to find solutions and instead look at what lessons we can learn and potentially adopt from overseas.

This is why I am hosting a session at the 2016 CIH Housing conference with Professor Duncan Maclennan, who has advised the governments of Poland, France, Sweden, Ireland, Canada and Australia on their housing policy. Also joining us will be, Julian Silver, Governance Director of Housing New Zealand, and, Francois Guidot, Strategy and International Relations Manager at Polylogis Group in France.

One example of a new approach from abroad is using tax breaks to stimulate new housing production.

In 2014 Places for People partnered with De Montfort University to investigate how other countries are increasing housing supply. Our research has shown tax breaks widely available abroad could play a key role in increasing affordable housing in the UK.  

Importantly these tax breaks come with incentives - tax concessions are only realised if additional good quality housing at below market rent is delivered to those with incomes below locally prescribed limits. These measures therefore incentivise an increase in good quality housing, which is accessible and affordable to low income households.

France has used these tax incentives to good effect and is the only place in Europe where the supply of social housing is increasing.

Consequently, France built more than 30,000 affordable housing units every year between 1994 and 2004, and 60,000 additional homes were built using various tax based schemes in 2010. To put that in perspective those 60,000 homes would put the Government within a whisker of its target for 200,000 new homes a year. In addition, this approach could deliver a significant increase in new housing starts without a major increase in public expenditure.

We already have vehicles such as Venture Capital Trusts and Enterprise Investment Schemes which offer 30% tax breaks for investors in certain industries - why not include affordable housing in these?

However, as a country we need to make sure we do not just focus on the quantity of new homes as the quality of the homes and neighbourhoods we build is more important.

New housing must put the needs of people first and new neighbourhoods that we create need to be socially, economically and environmentally sustainable.

Community infrastructure must be put at the heart of new neighbourhoods in order to create successful communities, especially when developing larger sites which are delivering new homes at scale.

This is why we are working with local government to provide three new schools, a hotel, commercial space, new roads, high-speed fibre optic broadband, and 100 acres of parkland as part of a housing development to deliver 2,500 new mixed tenure homes in Milton Keynes.

As a sector we need to have a debate about how we can increase our housebuilding and placemaking capabilities while also maintaining the difference we are making to the existing neighbourhoods we manage.

I hope you can join us at CIH Housing 2016 to be part of that debate.

This blog was first published in Inside Housing on 24 June. 

24 June 2016