The housing white paper has been announced today, and it certainly brings more interesting news for landlords, and tenants! Oh good, you might cry! More changes! What on earth could possibly be going on now?
We recognise the size of this problem. Young people staring into the window of estate agents, their faces glued to the window, dreaming of renting or buying a decent home, but knowing it’s out of reach because prices have risen so high.Secretary of State, Sajid Javid
Well, the government have put together a document that covers the entire property market, from building and planning, to renting and buying- however it has already come under heavy criticism, with Labour’s John Healy MP stating that ‘we hoped for better, we NEEDED better. It’s just feeble beyond belief.’
However, whatever the thoughts from the opposition, the plans are positive and the intentions are there, with Sajid Javid keen to ‘help tenants of today, homeowners of tomorrow, our children and their children.’
But what are the key points?
Were there any PLANNING plans?
They started at the very beginning, with changes to planning regulations. With so many new properties planned over the next few years, an overhaul of the planning systems is arguably overdue, and the document addressed a few changes that are being made to streamline the process.
‘We’ll make the planning system more open and accessible.’
Local authorities are being encouraged to chivvy along any developers who apply for planning permission, and then drag their feet. There’s so much to do that they cannot wait for people who are delaying the process, so councils are expected to take stern action on anyone who secures planning permission but doesn’t then use it is.
‘We will free up more public sector land more quickly for new homes’
With so many new homes planned, the government are turning to surplus land which is already in public ownership to fulfil the demand. There are plans to release enough land for an additional 160,000 new homes over the course of the current government’s term by launching a £45million Land Release fund, with many councils expressing interest in
participating in the Accelerated Construction scheme to speed up the process.
‘We promised green belt was safe in our hands – this is still the case. The Housing White Paper does not remove any of its protections’
The current 25 Year Environmental Plan commits the government to leave the natural environment better than they found it, and they have committed to preventing urban sprawl by maintaining green belt land. The percentage of land currently covered by green belt is around 13%, and has remained at this level since 1997.
So they’ve tackled plans, what about actually BUILDING the homes?
Unsurprisingly, there were a few changes to the way homes are going to be built moving forward. With such a responsibility to uphold, local authorities are facing a big responsibility, and there’s plenty of new challenges facing both councils, and builders.
‘We’ll help developers to get building – and give local authorities the tools they need to hold them to account if they fail to do so’.
Local authorities now have the responsibility to hit certain targets with regards to home building, and the government are encouraging them to step up and take control of the projects in their areas. If sufficient progress is not being made on producing of reviewing plans, the government will intervene.
According to the whitepaper, over 40 percent of local planning authorities do not have a plan that meets the projected growth in households in their area. However, if the number of homes being built is below expectations, a housing delivery test will be applied. The
test has been introduced through changes to the National Planning Policy Framework, and will help highlight how far below target an area is, establish why, and help ensure that additional land is released to fulfill the requirement.
‘Small builders can find it almost impossible to enter the market – we’ll make it easier for them to compete.’
The document highlights plans to open up the market to smaller builders, as well as those embracing innovative and efficient methods, including the promotion of more modular and factory build homes. Additionally, anyone who has plans to build their own property should find it significantly easier – the government has pledged to smooth the way!
‘We’ll diversify the housing market, as 60% of new homes are built by just 10 companies’.
Feel like you’re seeing the same few developer sign pop up again and again? You’re not wrong – according to the government’s research 60% of the market’s new homes are built by just 10 large companies. the document wants to change all that, and aims to partner with small and medium sized house builders via the Accelerated Construction scheme, which will help them access loan finance that they need, and get the leg up into the industry.
However, the Federation of Master Builders have already reported a hike in workload, but are issuing a stark warning that an impending skills shortage could have a real impact on the government’s impressive house building plans, with half of small construction firms finding
it difficult to hire roofers, electricians, plumbers and plasterers. This is added to an already severe shortage of bricklayers and carpenters which has blighted British building for some time.
With all these new homes, is anyone going to be able to afford to buy them, or is the RENTAL MARKET still going to be strong?
This document is more focussed on the rental market, steering focus away from getting people on the housing ladder and instead realistically focussing on the 11 million families reliant on the lettings market in the UK, and aiming at developing properties aimed at affordable renting options.
‘We’ll work with the rental sector to promote three-year tenancy agreements to allow families to put down roots in a community.’
‘Family-friendly’ tenancies of three years or more are being proposed, designed for tenants who wish to make a base within a community, and end the cycle of short lets and upheaval, especially when there are young children involved. The government are working with the British Property Federation and the National Housing Federation to ensure that this approach is viable and able to be managed across the private rental sector.
As well as benefitting tenants, this new approach could also be a huge benefit to landlord’s.
With longer tenancies in place, landlords wouldn’t have to consider the continual merry-go-round of tenants, and could enjoy the relative peace and quiet of a long-standing tenant – surely a win-win situation for all involved.
However, don't get too excited - the Housing minister Gavin Barwell has spoken out to confirm that the longer tenancies will result from agreements with housing associations, local authorities and institutional investors developing homes in the Build to Rent sector - it won't apply to buy-to-let landlords.
Speaking to 'Inside Housing' magazine, he confirmed that: 'My hope is that when you get those players coming in, that will disrupt the market and will encourage other landlords to do so as well.'
'If you try to force people to do it at the opposite end of the market (buy to let) I think history is very clear about what happened when you have rent controls - I don't think that would be a good idea.'
‘We’ll improve safeguards in the private rented sector and do more to prevent homelessness and help those that have been priced out.’
The white paper deals with the issue of rising rent demand, and the desperate need for more good quality, affordable rental properties. With this in mind, a Build-to-Rent scheme is being introduced to help provide more stable rented accommodation across the UK.
A £1 billion Build to Rent fund has been confirmed and the Government have pledged their support through a £3.5 billion Private Rented Sector Housing Guarantee Scheme.
‘We will encourage institutional investment in the private rented sector’.
With plans to build properties across the country specifically for the rental market, the government are keen to encourage investment into this new large scale property sector.
The plan to increase the overall supply of rented properties, and it is believed that this will give tenants a wider choice of homes and increasing the standards. By encouraging investment, the government hope to get the ball rolling quickly, and start seeing results in this
The national planning framework is being adapted to encourage local authorities to plan proactively for Build to Rent schemes, and allow B2R developers to offer private rental homes as well as other types of affordable housing.
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