Can local councils solve the housing crisis?

Frome Council recently said enough is enough and formally declared a housing crisis within the town.

In a scenario similar to numerous towns up and down the UK, the popular market town in Somerset has been struggling to keep pace with the housing needs of its local population, with its younger generation increasingly finding themselves priced out of the housing and rental market.

Councillor Polly Lamb, in making the announcement, pointed to years of underfunding from central Government and the detrimental effect policies such as Right to Buy have had in destabilising the housing market. She blamed these policies for reducing the availability of social housing, thus pushing more individuals towards expensive private rentals.

The gravity of the situation lies in the fact that over 600 households are presently on the waiting list for social housing in the town, while only 49 homes have become available in the past six months.

This scarcity, she says, has sparked bidding wars for rental properties, often favouring wealthier outsiders over locals. Exacerbating the issue, the average monthly rental cost has surged to £1,499, consuming 50% of the average local salary.

To directly address this challenge, Frome Council has pledged to prioritise housing concerns and is in the process of formulating an action plan to increase the supply of affordable and social housing.

Councillors also expressed concern about the trend of viewing houses as mere commodities rather than homes. They said they would work with the housing authority to review holiday lets by ensuring necessary permissions are in place and collaborating with developers to initially market affordable homes to those already in Frome.

What this declaration of a ‘housing crisis’ will have remains to be seen. Highlighting the growing difficulties faced by the UK as a whole can only be beneficial if it leads to more discussions and actions.

Second homeowners are increasingly appearing as likely targets for local communities. A recent report in The Daily Telegraph suggests the Government is considering making second-home owners pay double the amount of council tax.

Reportedly, it is preparing to grant local authorities the power to raise the council tax charged on second homes. The Telegraph reports that one in four councils in England has already agreed to double the levy, potentially generating around £200 million.

More than 100,000 second-home owners, over 40% of the total, will reportedly see their bills increase.

I am sceptical about how effective this will be. If someone can afford to buy a second home, they are likely to be able afford to foot the bill of increased taxes. Nevertheless, any encouragement to prevent houses from sitting unused for most of the year is a positive step for the local community.

We cannot ignore the practice of buying second homes is driving up prices in local areas and compromising local residents.

However, a coordinated approach is necessary and each local area should be treated differently. While second homeowners might be said to have had a detrimental impact in areas like Devon and Cornwall, there are instances where that is not the case. For instance, in places like Ramsgate and Margate, the influx of second homeowners from London has actually helped regenerate and revitalise these areas.

This situation may demand an approach that goes beyond mere taxation, such as a covenant requiring residents to live in the area for a specified number of years and spend a certain amount of time in the property – Airbnb aside.

The concern about areas becoming ghost towns during winter due to a lack of residents is significant. While these areas will benefit from tourism as their main income source at some point, they still need to function when tourism is unavailable.

There is no doubt local councils possess the best knowledge of their areas. However, we have also witnessed some of the negative effects of granting too much power to local communities, with so called ‘Nimby’ (Not in My Back Yard) councils increasingly hindering new housing developments.

While a one-size-fits-all solution is not the answer, placing too much power in the hands of local communities is also not necessarily the solution, with a delicate balance needing to be struck.