Lyons review sets out policy to build 200,000 new homes by 2020 and let councils control who gets to buy them

This article is more than 5 years old

This article is more than 5 years old

Local councils will get powers to give local first-time buyers priority access to purchase new homes as they go on sale under plans being presented on Thursday by the Labour-commissioned Lyons review into the future of housing.

The 180-page review, probably the most extensive single piece of policy produced by Labour in opposition, sets out a plan for building 200,000 new homes by 2020.

The reports suggests that as many as half of all new homes could be reserved for local people for as long as two months once they go on the market.

Those offered priority access would have to be able to prove they have lived in the area for as long as two years, a way of reassuring local communities that they will be given preference over newcomers.

Councils will also be given powers to restrict the sale of homes so they cannot be sold for buy-to-let, or to those who do not intend to occupy the home.

In the overarching reform proposed by Sir Michael Lyons, developers are to be given greater certainty that homes will be built, so unlocking more land.

Local authorities will be able to designate housing growth areas in which they will have powers to assemble land and give certainty that building will take place. They will be also be given fresh reserve compulsory purchase powers.

Lyons recommends that it be a requirement for councils to produce a plan to meet the housing needs of the local community based on a standard nationally imposed formula.

If councils do not allocate sufficient land to meet the agreed needs on the basis of the formula, or fail to come forward with a plan, the existing national planning inspectorate will have powers to step in and require a housing plan to be developed. About a fifth of councils have so far failed to develop a plan.

“We propose that local authorities apply their powers, funding and incentives to take a proactive approach to land assembly and locally led development models in housing growth areas,” the report says.

The report highlights the example of Milton Keynes as a local authority “leading risk-sharing partnerships and taking a proactive role in land assembly and strategic development”.

The new town “has the highest percentage growth rate of all local authorities in England over the last 12 years and has delivered twice as many new homes as the next authority.

Most of Milton Keynes’ growth has taken place since 2001, with 196,000 members of its population being added over that 14-year period.”

The town had developed “a business plan which demonstrates reduced risk and makes it possible to secure interim funding on better terms, enabling timely and predictable provision of essential infrastructure. The process builds virtuous cycles by asking each partner to strengthen their commitment at an early stage in exchange for similar action by each of the others.”

It adds: “The intention is not to displace private developer expertise and activity in promoting and developing schemes, which will continue to play an important role, but to tackle barriers to delivery where they exist, bring forward additional schemes and increase competition and diversity by creating opportunities for a wider range of providers and a wider choice of homes.”

Ed Balls, the shadow chancellor, has insisted there will be no powers for local authorities to borrow further for housing, but has said housing will be made a priority in a Labour government capital spend.

In addition, he will allow local councils that have reached their housing revenue account cap a power to borrow from other councils that have not reached their cap, subject to Treasury agreement.

Lyons will suggest there could be as many as 30,000 extra council houses built by 2020.

He will also recommend powers for groups of local authorities to collaborate and form Olympic-style new Homes Corporations with strong planning powers. The powers will be similar to the now-defunct Urban Development Corporations.

The report will also contain measures to underwrite loans to help small builders get building again, thereby increasing competition and capacity in the housebuilding industry. Lyons claims greater competition could create 230,000 new jobs in construction, adding 1.2% to GDP.

Lyons will propose that powers for as many as 500,000 homes over a parliament could be built in new garden cities and garden suburbs.