Sir Michael, who served as Chief Executive of Birmingham City Council (1994–2001), headed the 2007 Lyons review of local government which pointed out that good housing is “critical to the health of the national economy and the quality of life and life chances of current and future generations”.
The Lyons Housing Commission report published this month notes that official house building statistics record that 155,000 homes were built in 2014-15, almost 100,000 homes per year short of achieving the Government’s target. It urged discounts on starter homes to be applied in perpetuity, while calling for ministers to ensure a broad housing mix.
In the FT, Judith Evans reports government concerns that home ownership has reached its lowest levels in 30 years as house price inflation outstrips wage growth.
The Local Government Association, which represents councils in England and Wales, is also calling for a change of approach from government plans for newly built starter homes to be available at 20% cent discount to first-time buyers under 40, who will then be able to sell them at full market rates after five years.
Ministers are to spend £2.1bn subsidising 200,000 starter homes by 2020 and are expected to launch a consultation shortly on the details of the scheme. Under the starter homes programme, these discounts in effect hand one group of people a windfall gain through a one-off price cut. The LGA proposes instead that the discounts also apply to resales so that they “benefit future generations”.
The starter homes will count as “affordable housing” under section 106 agreements, which require developments to include cheaper housing. However, a £450,000 home in London (which costs 17 times the average British salary) and even the cheapest £250,000 starter homes in other areas, will be out of reach for people classified as needing affordable housing. They would have to spend more than 30% of their income to rent or buy a home in 67% of local council areas, according to research carried out by Savills for the LGA.
The Lyons Housing Commission, a group of housing sector experts, felt the need to point out that for many people home ownership is not an option or the preferred choice.
Such people will welcome plans made by John Clancy, the new leader of Birmingham city council, and featured in the Financial Times. They include anchoring the £11bn West Midlands local government pension fund in Birmingham and the surrounding region, creating a “West Midlands sovereign wealth fund” to be invested in new homes and infrastructure.
In December he wrote: “There’s a housing crisis in this country and Birmingham is no exception. We need more affordable homes, we need more social housing and we need to give people hope. The Birmingham Municipal Housing Trust is building houses in the hundreds and I’m absolutely determined that the city as a whole must now move towards building thousands”.
He may well welcome the Lyons Housing Commission recommendations:
- to acknowledge the importance of the contribution that local authorities and housing associations have to make to tackling the housing supply crisis;
- to ensure local authorities have the flexibilities and support needed to promote, finance and commission new homes;
- to give housing associations the certainty they need to plan long term
- and to ensure that government policies place greater emphasis on championing the highest quality of design and environmental standards for new homes and the places in which they are built.
The Lyons Housing Commission statement and report may be accessed here.