First posted on http://ozzyscorner.wordpress.com/2012/05/17/time-to-consider-brick-bonds/ 17th May 2012.
A joint report by the National Housing Federation, Shelter and the Chartered Institute of Housing has been published, accusing the Government of failing to tackle the housing crisis.
Kay Boycott, director of communications, policy and campaigns at Shelter, said:
In Local Authorities across the country there is a battle to build the houses required to meet the needs of those who need secure, affordable housing. The lack of finance and the pressure to protect Green Belt land makes it even more complicated.
In November 2011 Homes from Empty Homes reported that 720,000 homes were empty in the UK, 279,000 for over six months. In addition, many urban areas have unused business properties that could be converted, both providing affordable homes and improving what are often eye-sores in poor condition. Another benefit is the way that no more Green Belt need be built on.
As well as providing homes, this would create new jobs, require more apprenticeships and cut the benefits bill. Creating hundreds of thousands of jobs would really boost the UK economy. Dr Eoin Clarke has researched this issue.
Clearly funding this via Government in the foreseeable future is a tough ask. However, there is an alternative source that could be created without costing the Government a penny – Brick Bonds.
Currently, savers face record low interest rates and are desperate to find a decent return.. Businesses are sitting on huge cash piles. In the third quarter of 2011, according to Deloitte, UK businesses were sat on a cash pile worth a staggering £ 731.4 billion. There is money out there, it’s just not being spent.
I propose the creation of Brick Bonds. These would be an investment that would allow Councils, Housing Associations and Co-Operatives to borrow money to bring these homes back into good use.
Building affordable homes to both buy and rent securely would not be without at least a modest return. This would make the buyer of the bond enough interest to justify it being a good deal for the purchaser, when stable good returns are hard to find elsewhere.
The Government could assist in making Brick Bonds work. A framework of regulation would make them safe. Some concessions, such as making them partially tax-free, could boost their popularity and help ordinary savers.
Planning laws could eased to enable the easy change of use of former business property to residential property.
A new legal framework could be enacted to allow the compulsory purchase of unused and empty property by Councils and Housing Associations, before they become too derelict.
A new stream of affordable homes would also have the knock on effect of giving those living the poorest slum accommodation in the private sector a way out. Putting slum landlords out of business would be doing society a huge favour.
You never know, this idea might just catch on…