Housing White Paper – what does it all mean?
14th February 2017The government’s much-awaited Housing White Paper has been released and here, property consultant Tony Freeman, investigates the findings and what it means for the UKs property market.
The housing white paper, entitled “Fixing our broken housing market”, introduces new ways of assessing housing need, putting the onus on local councils to avoid “ducking difficult decisions” and encouraging them to use compulsory purchase orders.
The Communities Secretary, Sajid Javid, told the House of Commons that average house prices had jumped to 7.5 times average incomes and rents in many places took up more than half of take-home pay.
He blamed the slow-rate of house building, telling MPs that the number of home completions in England has been lower than anywhere else in Europe, relative to the population, for the last three decades.
Javid told MPs, “Our housing market is broken… we have to build more, of the right homes in the right places, and we have to start right now.”
The main focus appears to be on Build to Rent (BTR) schemes which will see the government promoting and funding rental schemes, as well as affordable housing.
Local councils will be held accountable for their own areas and required to produce a realistic plan for housing demand and review it at least every five years with an “honest assessment” of local housing need. It will give them more control but also more responsibility and accountability when it comes to planning and house building.
Existing schemes, such as Help to Buy, will continue and a plan to offer discounted starter homes will be launched. Such starter homes will have a 15-year repayment period and if they’re sold within this time some or all of the discount must be repaid in order to discourage speculative purchases.
In April, the Government will introduce a Lifetime ISA to help first-time buyers save for a deposit. On savings of up to £4,000 a year, the Government will pay in a 25 per cent bonus.
Currently, when planning permission is granted the build must take place within three years, however, this is set to change with the White Paper indicating that developers will be forced to build within two years of gaining planning permission, or see it lapse.
Smaller building firms will be given assistance to expand, as currently 60 per cent of new homes are built by just 10 companies. The Government will back small independent builders including support for off-site construction, where parts of homes are assembled in a factory through the through the £3 million Home Building Fund.
Greenbelt will remain and it does not mean that building can start. Any greenbelt bans that are already in place will not be lifted to allow for house building projects.
As space is at a premium, developers in cities will be looking to build up rather than out, seeing cities and urban areas becoming increasingly filled with tall residential buildings.
The ban on agency letting fees will go ahead but a set date has yet to be agreed. This follows from the government announcing in November 2016 that it would introduce a ban, meaning tenants will no longer have to pay fees that can run into hundreds of pounds when they sign a new tenancy agreement.
An expanded and more flexible affordable homes programme, for housing associations and local authorities, with £7.1bn of already announced funding.
An end to “leasehold abuse” by which home buyers are locked into leases with spiralling ground rents.
We will wait to see how the topics discussed in the White Paper unfolds over the coming months and whether what the government has committed to and have set out in their proposal, and what will be implemented.