Rentplus’ Evidence Highlighted in House of Lords’ Report on Housing

Jan 10, 2022

The House of Lords’ Built Environment Committee has published its report into ‘Meeting housing demand’ which concludes that “the Government must address barriers to building much needed new homes”. It says that too many people currently live in expensive, unsuitable and poor-quality homes and housing supply needs to be increased to tackle the housing crisis now.

The Committee acknowledges that building more homes will not address affordability pressures in the short term but says it is an essential first step to ensure that demand can be met in the long term. It notes that it heard that meeting future housing demand will require more homes of all kinds.

The Committee heard that the Government’s target of 300,000 new homes per year and one million new homes by 2024 may not be enough to address future trends and raises concerns that these targets will not be met if the barriers to building new homes are not addressed.

Key conclusions and recommendations of interest include:

• The role of SMEs in the housebuilding industry has collapsed. SMEs should be supported by reducing planning risk, making more small sites available, and increasing access to finance.
• The population is ageing and by 2050 one in four people in the UK will be over 65. The country needs more specialist and mainstream housing suitable for the elderly.
• Uncertainty and delays to planning reforms have had a ‘chilling effect’ on housebuilding and created uncertainty for housebuilders and planners. The Government needs to set out its strategy for the planning system. This should include clear proposals on local plans, infrastructure funding and land availability. In light of half of local authorities not having up to date plans, the Committee says that the barriers to plan making must be addressed. It supports the Government’s proposals to get all authorities to make local plans within 30 months of any new legislation. It also says that planning departments need more resource to avert an emerging staffing crisis.
• Government must change its approach to spending on housing. Over time the money spent on housing benefit should be invested in increasing the social housing stock. Right to Buy schemes are not good value for money: increasing the housing supply would be a more effective use of funding.
• On Help to Buy, the Committee finds that the scheme, which will have cost around £29 billion in cash terms by 2023, inflates prices by more than its subsidy value in areas where it is needed the most. It notes recent changes to the programme but says that this funding would be better spent on increasing housing supply.

The Committee also highlights the importance of addressing the skills shortages in the construction and planning sectors.

Within the report it references Rentplus’ evidence submission (p26):

“We heard that the high costs of housing in the private rented sector inhibit people from saving the deposit necessary to move into home ownership. Given that average deposits are £59,000, “saving for a deposit is impossible for many renters on lower incomes”, especially as research before the COVID-19 pandemic showed that 45% of private renters in England did not have enough savings to pay their rent for more than a month if they lost their job.”

The full report is available here.

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