http://affordablehousinginstitute.org/blogs/us/2008/08/sums-of-a-zero-sum-game-part-3-whats-it-all-about-alfie.html Affordable Housing Institue Mon, 22 Feb 2010 01:10:03 -0700 http://wordpress.org/?v=2.8.6 hourly 1 http://affordablehousinginstitute.org/blogs/us/2008/08/sums-of-a-zero-sum-game-part-3-whats-it-all-about-alfie.html/comment-page-1#comment-11645 Andrea Titterington Thu, 28 Aug 2008 13:18:21 +0000 http://affordablehousinginstitute.org/blogs/us/2008/08/sums-of-a-zero-sum-game-part-3-whats-it-all-about-alfie.html#comment-11645 In the current mortgage famine and credit crunch the new build programme for all housing in the UK is crashing. The largest developers are having to write down the value of their land holdings which is having disastrous effects upon their bottom lines. National government has allocated an additional £200 million to assist housing associations to buy up some of the overhang of units that cannot be sold to individuals. In the short term, this may increase the percentage of affordable housing on some schemes. In the medium to long term it will mean that the total amount of housing output is going to be reduced for years to come, exacerbating the affordability problem. In addition, it will give developers a reason to fight harder against tough Section 106 requirements with LPAs in a weaker position if they want anything built. The national government is not going to reach its target of 3 million additional homes by 2020 and shortages will increase the cost/value gap for affordable housing once the current downturn/mortage famine is over. There are also tax disincentives for the restoration of older housing stock as Value Added Tax is 17.5 % on refurbishment and 0% on new build AND property taxes on vacant commercial properties (many of which were converted into residential uses, particularly in city centres) have increased as the 50% rebate was taken away this year. This means that at the same time that new build is slowing to a trickle, buildings that might have been converted into new dwellings are being demolished. We await the government's autumn statement with interest! In the current mortgage famine and credit crunch the new build programme for all housing in the UK is crashing. The largest developers are having to write down the value of their land holdings which is having disastrous effects upon their bottom lines. National government has allocated an additional £200 million to assist housing associations to buy up some of the overhang of units that cannot be sold to individuals. In the short term, this may increase the percentage of affordable housing on some schemes. In the medium to long term it will mean that the total amount of housing output is going to be reduced for years to come, exacerbating the affordability problem. In addition, it will give developers a reason to fight harder against tough Section 106 requirements with LPAs in a weaker position if they want anything built. The national government is not going to reach its target of 3 million additional homes by 2020 and shortages will increase the cost/value gap for affordable housing once the current downturn/mortage famine is over.
There are also tax disincentives for the restoration of older housing stock as Value Added Tax is 17.5 % on refurbishment and 0% on new build AND property taxes on vacant commercial properties (many of which were converted into residential uses, particularly in city centres) have increased as the 50% rebate was taken away this year. This means that at the same time that new build is slowing to a trickle, buildings that might have been converted into new dwellings are being demolished.
We await the government’s autumn statement with interest!

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