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26 February, 2016 - 11:56 By Tony Quested

City demands more power to solve affordable housing crisis

Kevin Price

Cambridge City Council is pressing the Government for more powers to tackle the region’s affordable housing crisis.

Global companies are bringing hundreds of new jobs into the UK’s leading science & technology cluster and detailed analysis by the council of the region’s housing market has highlighted the need for urgent action.

Its push for more flexibility over housing provision comes in the wake of recent proposals for a devolution bid for Cambridgeshire, Norfolk and Suffolk and a request for councils involved to lay out their ‘asks’ of government.

Cambridge says the Government should allow it to add fresh impetus to tackling the housing shortage and makes the case for delivering new affordable homes to rent and buy across a range of tenures, including new council housing.

A statement from the city council highlights changes in government policy which, without the proposed new freedoms and flexibilities, will have a highly detrimental impact on the Greater Cambridge area. It points to the Government’s policy and funding shift away from social housing for rent and towards home ownership and makes clear that this does not address the continued pressing need for affordable housing for those on lower and average incomes in the city.

It highlights that the Government’s one per cent social housing rent cut each year for four years will result in an income loss to the city council’s Housing Revenue Account (HRA) of £15 million over four years. This has resulted in the council’s existing HRA new-build programme being put on hold.

A further challenge posed by government policy, according to the statement, is the requirement for councils to dispose of ‘high value’ social housing in order to fund the implementation of the Right to Buy for housing associations.

Council housing plays a major role in the Greater Cambridge area, providing over 30 per cent of all rental homes. The forced sale of a significant number of these homes would risk damaging the local housing market, the council says.

As Greater Cambridge is a high value area, with growing rents and house prices, even more people would find it difficult to find the homes they need as a result.

Only the top 20 per cent of households here have incomes that enable them to buy homes with the remaining 80 per cent including those on average or lower incomes unable to do so.

The council is proposing to open negotiations with the Government to secure a number of new freedoms and flexibilities, including:-
1 – Approval for a higher level of borrowing against the HRA
2 – Flexibility for social housing providers to set council housing and housing association rents to better reflect local conditions
3 – Exemption for new build homes from Right to Buy and the High Value Levy for 30 years
4 – The power to retain a significant proportion of the receipts from the sale of high value properties, to fund a like for like, one for one replacement of council homes lost through compulsory sale
5 – Approval to use Right to Buy receipts to match against borrowing and the ability to spend Right to Buy receipts within a five year period (rather than three years) to take account of land supply
6 – The planning powers to agree the appropriate tenure mix on sites to meet local housing need.

Cllr Kevin Price, executive councillor housing, said: “Any devolution deal must offer real benefits for Cambridge and for its residents. Tackling the housing affordability crisis is at the core of the growth challenge facing the city and so it is at the core of our ‘ask’ to government.

“Many people simply can’t afford to buy homes and Cambridge needs a mix of housing, including housing for social rent, to meet existing and future needs. The council has a good delivery record and ambitious plans to build new homes but to do that we need more flexibility from government and that’s what we are pressing for.”

The city council has already been working with other councils through the Greater Cambridge City Deal to make the case for housing – including making representations to government ministers to highlight how housing policies and legislation will impact on the Greater Cambridge area.

The proposed statement will be presented to the council’s Housing Scrutiny Committee on March 8.

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