Grant Shapps’ announcement of the first New Homes Bonus payments to councils prompted me to consider how the new incentive will change the way local authorities approach housebuilding. Many recent changes to the Government’s housing policy are welcome: the abolition of regional housing targets and of the national brownfield target, and the potentially radical land auction pilots announced in the Budget. But will an incentive-based approach work better than its predecessor?
The guiding principle of localism - that each place is different and therefore best placed to make decisions about its future – still seems to sit uneasily with the New Homes Bonus. It’s a policy that assumes everywhere has the same potential to build new housing, and financially penalises those that do not.
Every place has its own individual potential for population growth, and its own balance between housing supply and demand. As our 2010 Arrested Development report shows, the 65 local authorities with the least affordable housing are all in the South-East. Yet between 1997 and 2007 more houses were built in places such as Doncaster, Barnsley and Mansfield where prices were low, than in high demand cities such as Cambridge, Reading or Brighton. Equal growth for all places is an unachievable ambition. The New Homes Bonus should recognise and respond to differing levels of demand and growth potential across the country if it is to achieve smart housing growth.
I think the new incentive is excellent and will definitely kick start the market.
Posted by: New Homes Leicester | April 12, 2011 at 11:33 AM