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HFI calls for rural exemption to high-value home levy
Local authorities outside of major urban areas should be exempt from paying the government’s high-value home levy, a Treasury-backed group has said.
The Housing and Finance Institute (HFI), which is led by Natalie Elphicke and received the backing of George Osborne last year, recommended exempting all “regional local councils” from the levy – which is calculated on expected value of vacant high-value empty homes – if they can prove they will build new homes in the future.
The report defined regional local councils as “coastal communities, the country villages and market towns, post-industrial heartlands and the historic cities and counties of England”.
The levy is intended to fund the extension of Right to Buy to 1.3 million housing association tenants. The HFI report, however, said housing associations are failing to build in smaller district council and coastal areas, and consequently should not be given the cash from the sale of expensive council homes outside of urban areas.
The report, From the Shores to the Shires, said local areas outside of major urban areas were doing the “heavy lifting” and that 70% of all completions had been in “regional local councils” in 2015/16.
Despite this, housing associations are failing to build in these areas, the report said. It said its research shows around 90% of the areas where housing associations have not built any homes were in regional local councils in 2015/16.
The report said: “There is a growing geographical imbalance where housing associations are building new homes. In some areas, such as London, almost 30% of housebuilding is done by housing associations, while in other areas, such as Cumbria and Derbyshire, the proportion of housing association homes built is less than 7%.”
It added: “There is not much point giving high-value asset sales receipts to housing associations if they are not going to build in that area. So why not let those councils keep the receipts if they have a credible plan to build?”
The report said the government should give extra cash and resources to regional local councils as well as additional devolution powers.
The Department for Communities and Local Government and the National Housing Federation have been approached for comment.
