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Rentplus has responded to The DailyTelegraph article “Michael Gove paves way for council house explosion” with a letter.
The Levelling Up Secretary is proposing to axe rules forcing developers to build affordable homes in favour of imposing a levy on them to pay to local authorities.
Councils will invariably spend this on social housing. Although this is much needed, the effect will be to close off the potential for billions of pounds of private funding to be invested in affordable housing. Existing s106 delivery ensures there is a mix of tenures on qualifying sites which helps form mixed communities. Delivery through councils could see a return to mono-tenure developments which history shows doesn’t work. Private sector providers work in partnership with local authorities and registered providers to bring new investment and new innovation into social housing.
As an innovative provider of affordable, rent to buy housing using institutional investment, Rentplus is delivering eventual home ownership for those on low to middle incomes. We do this through Section 106 agreements with developers. This proposal risks stifling such private investment which, collectively, would provide much more affordable housing at no cost to taxpayers through the exchequer than from handing the proceeds of a levy to councils.
Instead, the Government should be doing more to encourage institutional investment in line with the Chair of Homes England, who has extolled the significant opportunities for institutional capital to deliver new affordable housing.