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Peers Advise Higher Planning Fees and Taxes

The Economic Affairs Committee for the House of Lords has recommended an increase of 50% to support the government target of building one million new homes between 2015 and 2020.

The committee’s report, titled Building More Homes stated that the government’s target was inadequate and for the foreseeable future, at least 300,000 new homes a year must be built.

Committee recommendations for meeting the new target include enabling local  authorities to raise their planning fees, impose a council tax on unfinished homes, and borrow more capital to construct social housing.

The report criticized the government emphasis on home ownership and a reliance on private builders to meet the demand. It stressed that local authorities and housing associations should be given the incentive and the resources to make a higher contribution to new housing supply in the UK.

The committee recommended that councils be allowed to establish and alter planning fees in accordance with local needs. It stated that the cap on fees should be a lot higher than at present, and also recommended the removal of arbitrary restrictions on the ability of local councils to borrow funds for social housing.

The report pinpointed a gap between the number of properties granted planning permission and those actually being built. One reason for this disparity, it suggested, was the building rate restrictions imposed by larger builders to benefit their profit margins. To deal with this issue, the committee recommended giving councils the discretion to levy council tax on projects not completed within a certain time period.

 

Structural Defects Insurance

The committee also recommended giving a senior cabinet minister the responsibility of identifying extra publicly owned land and arranging for it to be used for housing development. The report stated that the National Infrastructure Commission should supervise how many properties are actually built on public land and emphasise the construction of low-cost homes.

Ben Mansell, planning expert of law firm Pinsent Masons, said that during the last decade, only once has the UK witnessed more than 200,000 new residences being built in a single year. In that respect, a 300,000-home target could be seen as challenging or unrealistic, depending on the mindset.

Mr Mansell said that the new-style government has targeted housing as a key issue and intends to be ambitious in that respect. In his opinion, however, the government has inherited a flawed system that is not delivering enough homes and requires substantial reconsideration.

He acknowledged that the House of Lords report contained “many sensible reforms” but whether or not they are implemented remains to be seen.

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