The government will miss its housing targets unless housing associations are able to build more homes, a leading think tank has revealed.
Limitations on the number of homes which can be built privately and strict regulations on housing associations mean that the government will not be able to meet its goal of creating one million new homes by 2020, according to new research by Policy Exchange.
The think tank has called for a reform of the current housing association model, making top performers exempt from social rent reductions, giving tenants the right to part buy, and incentivising associations to build in excess of 100,000 homes per year. Under the current model, housing associations build an average of 50,000 homes each year, but only 10 per cent of these are eligible for market sale. Meanwhile, private housebuilders can only 140,000 new homes a year as a result of planning constraints and their ‘build to sell’ model.
“The government needs to urgently move away from a one size fits all policy towards housing associations if it is to meet its target of one million new homes by 2020,” said Policy Exchange’s Chris Walker, the author of the report. “A new settlement will give well run housing associations freedom to run their own organisations in the most efficient manner, incentivising them to borrow to build and providing opportunities for people on low incomes to become part of the property owning democracy.”
The think tank has proposed that largest housing associations should be allowed to sign individual Housing Deals with the government, which would commit them to building tens of thousands of affordable market homes over the next few years.
Five leading housing associations have backed the proposal, claiming that it would help to ease the current housing crisis and boost revenues by allowing the associations to target equity investment and develop around 50 per cent of homes for the open market.