A new housing white paper, which aims to accelerate house building and diversify the housing market, was published today by the Secretary of State for Communities and Local Government, the Rt Hon Sajid Javid MP.
Called Fixing Our Broken Housing Market, the long-awaited – and much-delayed – paper aims to boost construction of new homes across the UK, which Mr Javid has previously labelled “nowhere near good enough”. The Secretary of State delivered a speech to the House of Commons at 12:30pm, in which he argued that the idea of owning a home is a “distant dream” for many and that fixing the housing crisis would be a complex task, to which there is “no single magic button”.
Today’s headlines focused on a perceived shift in government thinking on housing policy. Gone are the former Prime Minister David Cameron’s efforts to build a ‘home-owning democracy’. Instead, the publication adjusts the focus from starter homes to a range of affordable options, which are set to be provided in the private rented sector, as well as by housing associations and even local authorities.
The white paper aims to make the private rented sector more “family friendly” by working with the National Housing Federation and the British Property Federation to promote longer-term tenancies of three of more years (rather than the standard six or 12 month contract commonly used today). Moreover, the white paper sets out the government’s intention to consult with the Local Government Association to promote the same among local authorities. This comes alongside an intention to increase Build to Rent homes by allowing for greater long-term planning and developing a definition of affordable private rented housing.
Starter homes, the flagship housing policy of the Cameron years, will now be targeted at households on lower incomes, defined as those earning less than £80,000 (or £90,000 in London). However, the white paper also notes that the 20 per cent quota of starter homes required in new developments will be dropped to 10 per cent and that it will be for local areas to “work with developers to agree an appropriate level of delivery of starter homes, alongside other affordable home ownership and rented tenures”.
There will also be changes to the delivery of homes, as the government announced plans to crack down on so-called landbanking and to force housebuilders to start construction on new homes within two years, rather than the three years they currently have to begin delivery. Compulsory purchase powers will also be extended, with the Homes and Communities Agency (HCA) playing a more active role alongside local authorities to improve access to under-utilised land.
As part of efforts to diversify the housing market, the government is to encourage SMEs to build more homes. This follows Mr Javid’s speech to the Conservative conference last autumn, in which he promised a £5bn housebuilding funding package, £1bn of which will be used as “short-term loan finance targeted at SMEs, custom-builders and innovators to deliver up to 25,000 homes this parliament”.
Social housing and housing associations are also identified as some of a number of options to diversify the market. The government has announced plans to make the Social Housing Regulator a stand-alone body as well as using the paper to “reiterate its position” that housing associations are private-sector organisations. As such, they are expected to “make every effort to improve their efficiency” in order to meet local housing needs.
Nearly 40 years after the Right-to-Buy policy was rolled out for local authority tenants, there had been rumours of a shift towards greater local authority house building. However, while the document states that the government will look seriously at requests from local authorities for support on home building, any radical changes to the sector have been sidestepped. It seems that a return to large-scale council house building is on hold for the time being, with the Secretary of State saying he is to “explore options” in this area.
Pressure on councils to play a more active role in encouraging housebuilding was emphasised. The government intends to abolish rules allowing local councils to assess their own housing need, under which some authorities have “fudged the numbers”. The government is set to consult on a new national formula which will aim to provide an “honest assessment”. From April 2018, a new methodology for assessing housing requirements could apply “as the baseline for assessing 5 year housing land supply and housing delivery” where an up-to-date plan is not in place.
Councils will also be encouraged to use land more effectively by densifying areas and building higher, especially in urban areas and locations close to transport hubs. In addition, the white paper supports the government’s strategy of estate regeneration by promoting the benefits of regenerating housing estates to local planning authorities across the country.
After weeks of speculation, Minister of State for Housing and Planning, Gavin Barwell MP confirmed this weekend that green belt policy would remain unchanged and that development in those areas would continue to be permissible only in “exceptional circumstances”. In the end, the paper appeals to Conservative shire heartlands far more directly than had been anticipated, offering similar protection for ancient woodlands.
Indeed, with the absence of any green belt policy changes, the white paper aims to ramp up the release of land in other areas. The paper announces a new presumption in favour of development on brownfield sites unless there are “specific reasons to the contrary”. The government hopes that these proposals will combine with increased density of developments to make way for maximum returns from under-developed land.
The paper also refers to having conversations about improving housing for older people, in a bid to encourage them to downsize and free up large family homes. Moreover, innovative approaches to delivering homes quickly, such as encouraging more ‘pre-fabs’, as well as relaxing rules on self-build homes and encouraging the development of small ‘windfall’ sites, are set to be explored. The white paper also announced that the Homes and Communities Agency will be relaunched as Homes England “with a clear, unifying purpose: ‘To make a home within reach for everyone’.”
The Shadow Secretary of State for Housing, the Rt Hon John Healey MP responded in the House of Commons, asking: “Is this it?” His sentiment was shared by some commentators from the sector – after a long build up to the bill, it was inevitable that some would be disappointed by the final draft, with Carl Dyer, national head of planning at solicitor Irwin Mitchell, feeling the paper was “a surrender to the nimbys”.
Others were more positive, however, with James Duncan, partner at Winckworth Sherwood, welcoming “the Government’s drive to increase the supply of Build to Rent properties”. He went on to say how important it is to “build homes to meet the aspirations of all and provide options that are within everyone’s grasp. It means more choice and consistently higher quality properties for renters as professional companies are added to the mix alongside individual landlords”.
Faraz Baber, director of planning and design consultancy Terence O’Rourke, was cautious but optimistic, commenting that there are “already question marks over how some of the proposed changes will work alongside the guidance already set out by (mayor) Sadiq Khan for London. On first look the white paper appears to be strongly geared towards delivery across different markets, let’s hope the reality allows for this to happen.”
Indeed, as the Secretary for State rightly acknowledged, there is no quick fix to the housing crisis facing the UK; despite some encouraging signs in the government’s white paper, the industry will need to continued support should it have any hope of meeting housing demands in coming years and decades.