24 Eylül 2010 Cuma

£10,000 rake-off plan for residents who approve new homes

A big increase in the building of new family homes is envisaged by Policy Exchange, which has close links to the Conservative leadership. Photograph: Chris Ison/PA

Britain needs a massive house-building programme to stabilise property prices – which could be promoted by allowing villages to share in developers' profits if they approve plans and by ending the right to a council house on the basis of need, a thinktank says today.

Policy Exchange — which has close links to the Tory leadership — says the radical proposals are needed to contain a housing crisis. Its report, entitled Making Housing Affordable, suggests the government set a target that by 2030 the average price of the cheapest 25% of homes should be only four times the income of a household on the minimum wage. At present it is 12 times. It argues that the only way to achieve this is to embark on a massive home-building programme. The report also notes that the last decade saw 160,000 new homes being built a year – compared with 360,000 each year in the 1960s.

The report claims the problem lies with the country's complex planning laws. At present local authorities decide if proposals get planning permission but this, it says, should be changed so that local people vote on proposed developments.

The coalition government has said it is considering a similar scheme but, according to Policy Exchange, it is setting the bar too high at 90% of votes cast. It says a straightforward majority should be enough. Developers could use cash incentives – such as the windfall gain that they receive when planning permission is granted – to persuade those affected to vote in favour.

"If a village decided to increase in its size from 2,000 to 3,000 households, incorporating a large and high-quality development, this would easily permit a £10,000 payment to every existing household in the village," says the report.

Alex Morton, a former civil servant and author of the report, said that he did not see this as a "bribe or incentive". He said: "The money could just as well be used to build a park."

Another key proposal is that social housing should no longer go to those in greatest need. This criterion has resulted in half of all new social tenants coming from economically inactive working-age households reliant on benefits. Instead the government should allocate it "firstly to those who are severely disabled, but then subsequently to those who wait longest or have the greatest local connections to an area".

This would allow social housing to become a stepping stone for low-paid people towards owning their own homes. All housing association stock would be handed to the government which could then sell off the houses to renters who wanted to buy their property. New homes could be built by issuing bonds which would be repaid out of rent. The new set-up would see 100,000 extra homes a year built and the Treasury make £2.64bn a year from house sales.

However, others doubt whether such a radical move could be made. "The question is what is social housing for," said Sam Lister of the Chartered Institute of Housing. "Is it to raise revenue or is it meant to be where those in greatest need get homes? The tension that you always see with Conservative governments is that one wing of party always says: why are we rewarding the undeserving who do not contribute their bit to society? In the Major administration you saw changes to social housing because there was a perception that if you get yourself pregnant you get a house. It's the same clash again today."


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