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Government blamed for 'alarming loss' of affordable homes

Tom Belger
Finance and policy reporter
Manchester city centre as local councils say developers are not building enough affordable homes. Photo: Anthony Devlin/Getty Images

The UK government has let developers “shirk their responsibility” to build thousands of affordable homes by de-regulating housing rules, new figures show.

Local councils and a housing charity spoke out as new data suggests England has missed out on more than 13,500 new affordable homes because of a building loophole introduced in 2013.

The Conservatives under former prime minister David Cameron tore up decades-old planning rules to let developers turn offices into homes without scrutiny by local councils and communities.

The ‘permitted development’ reforms were designed to address low levels of home construction, with Britain’s planning system blamed by some as too slow and restrictive.

But the reforms allow certain new developments to go ahead without any affordable housing, and without developers contributing towards local infrastructure such as roads or schools.

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Developers are usually forced to make between 25% and 40% of homes ‘affordable’ and meet certain floor space and quality standards, but the scheme lets them avoid such requirements.

Figures published by the Local Government Association (LGA) on Saturday showed more than 54,000 homes had been created in former offices.

Local areas may have therefore missed out on about 13,540 affordable properties if councils had been able to insist a quarter met the usual affordability rules.

Such controversial office conversions now make up around half of all new homes in some parts of the country, including Harlow and Norwich, according to the LGA.

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Polly Neate, chief executive of Shelter, told Yahoo Finance UK some new blocks were often of “dreadful quality,” and said the changes “cannot be right” when tens of thousands of families were homeless.

“We’re seeing families forced to live in grim rabbit hutch homes in remote industrial parks, and in some cases with no windows,” she said.

One study last year found developments were “skewed” towards studios and one-bed flats, often aimed at students or providing emergency temporary accommodation rather than housing local families.

The research by the Royal Institute of Chartered Surveyors (RICS) found some studio flats were just 15 square metres, with less than a third meeting space standards recommended by government.

With no levies on developers, it also found “little evidence” of firms voluntarily coughing up to expand local facilities to meet a growing population’s needs.

The five councils the study analysed alone may have missed out on £10.8m ($14m) in funding from developers, despite an estimated infrastructure burden of £27.5m from such developments. There are 343 councils across England.

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David Rennard, the LGA’s housing spokesman, said councils had “serious concerns” over the quality, safety and location of such homes built outside standard planning rules.

“Permitted development rules are resulting in the alarming potential loss of thousands of desperately-needed affordable homes,” he said.

Rennard said it was “vital” local areas and councillors had a say over developments. He denied the planning system was an obstacle, noting nine in 10 applications were approved.

But a spokesperson for the Ministry of Housing, Communities & Local Government said: “Since 2010 we have delivered over 464,000 new affordable homes, and we have abolished the council borrowing cap so they can build even more social housing.

 “We are committed to delivering a million new homes by the end of this parliament, and permitted development rights are playing an important part in making our ambitious commitment a reality.”