MPs urging more affordable homes

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More affordable homes must be built to meet future housing needs and to help the construction industry through its current troubles, MPs have said.

The government must stick to its ambitious house-building targets despite the recession, the Communities and Local Government Committee argues.

But MPs are worried how its plans will be paid for as funding pressures grow.

Ministers said they would bring forward spending for new homes but the Lib Dems said red tape was slowing the process.

'Welcome steps'

In the face of the worst housing slump in a generation, Labour has launched a string of initiatives to help those struggling to meet mortgage and rental payments and to ensure the availability of new homes does not dry up completely.

MPs said government efforts had been "welcome" but further action was needed to protect homeowners and to give more people the opportunity to live in low-cost, quality housing.

We are particularly concerned that the government is borrowing from future budgets now with apparently no idea how it is going to restore that money at a later date Phyllis Starkey MP

It says tougher sanctions are needed against lenders not complying with guidelines designed to ensure that repossessions only occur as a last resort.

These require firms to pursue all other alternatives before seeking a court order against borrowers such as offering them a payment holiday and either extending or renegotiating loans.

Amid predictions that repossessions could rise by more than 60% this year, MPs want regulators and ministers to more closely monitor the conduct of lenders when it comes to repossessions.

They also say that targets for affordable homes must be much more ambitious, with ministers going well beyond their current pledge to build 70,000 new social homes a year from 2010-11.

While more houses should be made available for social renting, low-cost home ownership schemes, such as shared equity, also need to be simplified, the committee says.

Funding questions

However, the MPs are worried about how long-term commitments will be funded given that the government has brought forward £975m previously earmarked for 2010-11 to be spent this year.

"We are particularly concerned that the government is borrowing from future budgets now with apparently no idea how it is going to restore that money at a later date," said Phyllis Starkey, the Labour MP who chairs the committee.

"The credit crunch has not reduced the numbers of households needing new housing nor does it affect the need to address years of undersupply."

We are constantly looking at what more we can do to keep housing supply going in the current climate Margaret Beckett, housing minister

Among other recommendations, MPs want more unsold properties - particularly family homes - to be purchased by the state, more protection for tenants whose properties are repossessed and for local authorities to make more land available for new housing.

Housing minister Margaret Beckett said the government would not back down from its commitment to build three million new homes by 2020, a goal some experts believe is unachievable.

She said Labour has put in place the most "comprehensive" safety net ever for people at risk of losing their homes.

"We are constantly looking at what more we can do to keep housing supply going in the current climate," she said.

"That is why we are bringing forward spending and buying unsold homes to deliver thousands more affordable homes sooner and help protect jobs in the construction industry."

The Conservatives recently outlined plans to bring more than 900,000 empty properties back into use to reduce the "unacceptably" long waiting list for new social housing.

The Lib Dems said out-of-date regulations were preventing councils from building the new homes desperately needed.

"The government's first step should be abolishing the complicated rules that deny councils the freedom to invest," said their housing spokesman Sarah Teather.

"A massive injection of new social housing would kick-start the construction industry and provide new low-cost homes when struggling families need them most."