The government will publish its eagerly anticipated White Paper on the housing sector today in which it will set out new plans to build more homes across England.
The White Paper will include plans to cut through barriers stopping the number of new homes needed from being built.
It will announce a new Lifetime ISA in 2017 to help people save for a deposit, extend the Right to Buy discounts to housing association tenants, and invest in new homes for Shared Ownership, Affordable Rent and Rent to Buy.
It will also discuss how difficult it is now to get on the housing ladder with the average house now valued at eight times the average income and the number of people renting doubling since 2000.
In a statement ahead of the publication of the white paper, the Department for Local Communities and Government said it will include ways that local authorities, developers and SME housebuilders can build the homes Britain needs and to ensure that these measures improve affordability and protections for both renters and home purchasers.
Communities Secretary Sajid Javid is expected to say that the current system isn’t working and is one of the biggest barriers to progress in Britain today.
He will say: “With prices continuing to sky rocket, if we don’t act now, a whole generation could be left behind. The housing market in this country is broken and the solution means building many more houses in the places that people want to live.
“Today we are setting out ambitious proposals to help fix the housing market so that more ordinary working people from across the country can have the security of a decent place to live.
“The only way to halt the decline in affordability and help more people onto the housing ladder is to build more homes. Let’s get Britain building.”
However, reaction across the housing sector has been mixed.
James Davis, CEO and founder of online lettings agency, Upad, said: “As Sajid Javid acknowledged himself, the UK is short of circa two million new homes. Every year, for the last 30, the aggregate amount has increased, as consecutive Governments have failed to keep up with the rising housing needs of the UK. Nothing in this White Paper will solve the ownership crisis that the UK faces.”
David Cox, managing director, association of residential letting agents (ARLA) said: “We welcome today’s housing white paper; thinking about homes across tenures is really important and it’s reassuring that the Government is seeking a holistic view of all housing needs.”
The white paper will focus on three key areas:-
Getting the right homes built in the right places
A consultation will be launched about introducing a new standard way of working out housing demand to plan for current and future housing pressures.
This means every local area will have to produce a realistic plan that has to be reviewed every five years to ensure enough land is released to build enough new homes where people want to live and work.
However, this is still expected to take account of local people’s views and protect the green belt. To do this the government will expect councils and developers to build at high density.
Paul Staley, director of PRS at SDL Group said: “This is the direction most institutions are following as it’s an easier and more straightforward transaction to invest £50m into one of these schemes, rather than, say, 500 houses spread over 10 sites in the north of England. If we’re not careful, I feel the effort to grow the private rental sector may have a very strong southern and city centre bias.”
Speeding up housebuilding
The white paper will set out how local authorities will be given ways to speed up housebuilding and make developers build on time to help combat the difference between the number of planning permissions granted and the actual number of new homes completed.
This will be done by giving councils the ability to issue completion notices easier and to make sure developers have to start building on purchased land within two years, not three. Developers will have to give councils more information on delivery times for new housing so councils can incorporate accurate data into their local plans.
Mark Hayward, managing director, NAEA says: “Only 32,000 affordable homes were built in 2016, and this is totally unacceptable, especially given the number of homes we really need. We’ve had years of empty promises now and this has exacerbated the problem resulting in the price of properties being out of reach for so many.
“The announcement the Government plans to diversify the market by opening it up to smaller builders who embrace innovative and efficient methods is great and could go some way in helping deliver a vast number of homes quickly. However, it’s vital the Government considers the cost of building modular homes and understands these could remain unaffordable and unsuitable for FTBs.”
Diversifying the market
This will outline how new and smaller housebuilders can enter the market. Currently 60% of new homes are built by just 10 housebuilders. As set out in the Autumn Statement in December 2016, using the £3bn Home Building Fund, the white paper will detail how this fund can help build over 25,000 new homes this Parliament and 225,000 in the longer term by offering loans for SME builders.
Ian Thomas, co-founder of LendInvest, said: "The housing white paper makes it clear that the onus is on all levels of government and industry to deliver more homes of every type.
"The success of small scale housebuilders is of critical importance to the increase in housing supply. We want to see these small builders and property investors at the front of the queue to purchase public land.”
The report will also cover how government schemes such as Help to Buy have helped some get their first property and will introduce the Lifetime ISA to help support young adults to be able to save flexibly for the longer term and giving them a potential bonus of up to £4,000 of savings a year to help get a deposit for their first home.
Starter homes will also be aimed at first-time buyers who are priced out of the market and the white paper will detail how a wider range of affordable housing will be introduced to the market and how the £1.4bn Affordable Homes Programme, previously announced in the Autumn Statement, will be amended to relax funding restrictions so providers to the scheme can build a wider range of homes including ones with affordable rent, including Rent to Buy.
It will also include measures to help renters, protect green field sites, encourage more efficient use of empty homes and better educate people about leasehold properties, a growing p-art of the resale market and, with more homes being encouraged for urban areas, likely to be increasingly relevant.
Renters
Tackling the high cost of rent is expected to be covered in the white paper. Measures include allowing councils to plan for more Build to Rent homes and allowing developers to include affordable rent housing options in their plans.
Richard Donnell, insight director at Hometrack, comments: "The announcements for the rented sector will be welcomed by tenants and are a necessary response to a rapidly growing and important part of the housing market, which over the past two decades has seen billions of new investment but far fewer progressive, policy initiatives."
Green belt
The government will reinforce its message that the green belt is protected and only in “exceptional circumstances” can it be built on and will publish all actions local authorities must take before submitting proposals for building on the green belt.
It will set out how there should be a presumption in planning policy that favours brownfield land use on abandoned sites in town centres and close to transport hubs.
Jon Jennings, director at Cheffins said: “Today’s Housing White Paper is yet again an effort from the Government to increase productivity for housebuilders and try and speed up the planning process. There is a fine balance to be found here and we must ensure that our countryside is protected from inappropriate development whilst still providing enough new homes built to meet the UK’s chronic levels of demand.
"Measures to protect the green belt whilst still delivering on the forecasted one million new homes by 2020 do seem to be at odds with one another and it will be interesting to see how this develops over the coming months."
Empty homes
According to the government they will continue to encourage local authorities to tackle empty homes under existing powers which means they get the same money for bringing an empty home back into use as for building a new one, through the New Homes Bonus.
Leasehold
The report will outline how the government plans to better inform people of the difference between leasehold and freehold and how leasehold costs can increase and stack up over time.