This week we’ve released some new stats which reveal which local authorities are missing out the most because they’re not building the homes their area (and the country) needs.
The New Homes Bonus (NHB) is a cornerstone of the new ‘localism’ based planning system. The Government hopes it will incentivise Local Authorities – who have already seen their general funding cut – to facilitate housing construction, enabling the Coalition to meet its objective of building more homes and alleviating the country’s growing housing crisis. The NHB will be 6 years worth of the national average council tax (band) for each additional unit.
Local Authorities across the country have learnt for the first time how much they will receive from central government this year for building homes last year (or at least from their net additions). Neighbouring councils and similar size rural and urban authorities across the country will be able to compare how they have done. If Grant Shapps and the Government are right, the gun has started on the race for those areas which are going to “go for growth”
The NHB has come in at the lowest point in house-building for 80 years and there aren’t too many signs of improvement. The Government’s own household formation projections show we should be building 232,000 homes a year to meet the country’s need. Yet figures released last week show only just over 100,000 were built in 2010 – the lowest in any peacetime year since 1923. HBF’s latest Housing Pipeline report also showed Local Authorities are granting planning approvals for fewer and fewer new homes. Yet millions of families languish on Local Authority waiting lists and first time buyer numbers have collapsed.
Will the realisation that many if not most local authorities are hugely underachieving on house building and therefore missing out on the NHB cash turn this situation around?
Our figures show the difference between the NHB allocated and the potential NHB that could have been earned if net additions had met household formation projections. In pure cash terms councils are often losing out in a big way, Leeds is...erm...leading the way missing out on over £30million by the 6th year, closely followed by Bristol, Birmingham, Sheffield, Cornwall and Croydon. Together they’re failing to reach their potential by close to a whopping £100million. And that figure is per annum – so by the 6th year if they continue at their current build rates compared to household projections, together they’ll be squandering the opportunity to bag £100m of govt funding every single year.
And because of the top-slice effect, this money could well be going to their competitors, councils happy to build the homes the country and the economy needs - Peterborough, Gloucester, Basingstoke to name just three.
It’s important to note that the authorities mentioned above are missing out the most in pure cash terms but our figures also show who is actually furthest away proportionately. Their size precludes them from the list but per capita they could be losing much more funding, unsurprisingly those with negative net addition rates feature highly!
The stats are here so get in amongst them and have a look at your area!