Cllr Kathy Smethers: Let's Get Councils Building Again

I think councils should be building more houses. This is not about ideology: it makes economic sense to provide affordable homes in areas of the market where there is a shortfall.

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Subsidies for building by councils are falling. If councils can keep the revenues from Right to Buy specifically to build new homes, some councils would be able to provide shared ownership and market value homes for sale in their area. Profits could then be used to build affordable housing in areas where that housing is appropriate.

Private developers are currently required to provide affordable housing amongst market value housing. Profits would be increased if this was not a requirement. Instead, they could pay a levy to the council which would pay for more affordable housing: built by the council in areas which need uplift. This policy would thus kill two birds with one stone by providing regeneration and housing.

If councils own land in more affluent areas, they can build to maximise profit in these areas. The money gained could then go back to the council to fund other less profitable housing. In this way a council would be using a business model to provide housing of a value that private developers are not interested in (as profit margins are not high enough in 1 to 3 bed shared ownership accommodation). This would fill a gap in the market by providing homes of a high standard that would be sought after.

If central government allowed councils to keep these revenues - simply taking a tax in line with the private sector - then council house building in many areas would require no subsidies.

Kathy Smethers is a Councillor in Eastbourne, and also serves as a school governor. She previously worked as an A&E doctor in London before retiring to bring up her two daughters.

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