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As a result of the credit crunch the Government is unlikely to meet the ambitious housing targets set out in its 2007 Green Paper, Homes for the future: more affordable, more sustainable. Nonetheless, we strongly advocate retention of those targets because they continue to reflect levels of need and demand. The target for new social rented homes should be increased, both to address a historic backlog in need and to meet the likely increase in demand from households unable to purchase a home or access good quality private rented provision as a result of current economic circumstances.
We conclude that there is little merit in the claim that the planning and building requirements placed on house builders should be relaxed in order to reduce their costs. The homes that are built now must stand the test of time and should not, therefore, be built to an inferior standard.
The measures the Government is taking to shore up the housing market are positive. By buying up developers' unsold stock for use as social housing, the Government might be able to facilitate the start of new building projects, although we note the need to ensure that homes purchased in this way meet as many of the quality standards required of new social homes as possible. We recommend that the Government also purchase a limited number of family homes on the open market, where they have remained unsold for the period of a year or more. Such homes would satisfy a substantial unmet need within the social rented sector. The large funding injection for the building of new social houses promised by the Government is extremely welcome although we are concerned that the Government's ability to meet its targets in future years will be put in jeopardy if it does not subsequently replace the money brought forward to pay for it.
Housing associations have become reliant on the market to fund new developments. Without an increase in Social Housing Grant, many new affordable homes will not be delivered. We commend the Homes and Communities Agency for its quick response to calls for an increase in public funding for this sector. We also welcome work being carried out by the Tenant Services Authority to prevent housing associations from becoming insolvent. It is still too early to tell what impact these measures will have upon the housing market, and we intend to reassess the situation later in 2009.
House prices are falling but many buyers, particularly first-time buyers, remain unable to purchase a home, either because prices are too high in their area or because they are unable to obtain a mortgage. The Government provides a number of Low Cost Home Ownership schemes to assist qualifying first time buyers. HomeBuy Direct, the newest of these, should help to address the difficulties experienced by buyers of shared ownership homes with obtaining finance from banks. The vast array of schemes available is, however, confusing for buyers and lenders alike and we recommend that the Government simplify what it offers to improve take-up levels.
The number of home repossessions has increased since the beginning of the credit crunch, although fear of repossession is at a much higher level than actual repossession. The Government has targeted its support at different groups of home owners. Six thousand of the most vulnerable households will be helped by the Mortgage Rescue Scheme, with households less at risk able to apply for help with mortgage interest payments. We welcome these measures. We are concerned, however, that the Government seems powerless to affect lender behaviour, with Financial Services Authority guidelines and the Government's new pre-action protocol on repossession lacking enforceability. We recommend that it address this problem through its new Lenders' Panel. We also recommend that the Government take action to protect any private tenant whose home is put at risk when their landlord defaults on the mortgage.
Local authorities have a crucial role to play in pulling together all these initiatives in their local area.
The credit crunch is still evolving, and the impact it will have on the housing market in the coming months is not yet known. We intend to return to this subject later in 2009 to see how effective the Government's initial response has been
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