New housing white paper seeks to fix our broken housing market
The government has today (7 February 2017) published their housing white paper on plans to fix the broken housing market and build more homes across England.
Regulation of the private rented sector
Over 4 million households now rent their home from a private landlord, nearly twice as many as ten years ago. The white paper acknowledges that property standards in the private rented sector have been gradually improving and 65% of private tenants say they are happy with their tenure, up from 48% in 2004/05.
Measures highlighted in the white paper include:
- Consulting on new legislation to ban letting agent fees to tenants;
- Implementing civil penalty notices, banning orders and a range of other measures in the Housing and Planning Act 2016;
- Extending mandatory HMO licensing to a wider range of properties;
- Exploring options for new electrical safety requirments and compulsory client money protection for letting agents; and
- Promoting longer tenancies on new build rental homes.
Other measures outlined in the housing white paper have been summarised below.
Getting the right homes built in the right places
The government will consult on a new, standardised way of calculating housing demand to reflect current and future housing pressures. Every local area will need to produce a realistic plan and review it at least every 5 years.
Councils and developers will be expected to use land more efficiently by avoiding building homes at low density and building higher where there is a shortage of land and in locations well served by public transport such as train stations.
Speeding up house building
Giving local authorities the tools to speed up house building as well as powers to make sure developers build homes on time. The government will make it easier for councils to issue completion notices, shortening the timescales to require developers to start building within 2 years, not 3, when planning permission is granted.
Diversifying the market
Action to help small independent builders enter the home building market through the £3 billion Home Building Fund. Currently around 60% of new homes are built by just 10 companies. The fund will provide loans for SME builders, custom builders, offsite construction and essential infrastructure.
In April 2017, the government will introduce the Lifetime ISA. This will support younger adults to save flexibly for the long term, giving them a 25% bonus on up to £4,000 of savings a year. Savings and the bonus can be put towards the purchase of a first home, or withdrawn once they reach the age of 60.
Starter homes will be targeted at first time buyers who would otherwise be priced out of the market – households with an income of less than £80,000 (£90,000 for London).
Affordable Rent and Rent to Buy
In the Autumn Statement, the government announced an extra £1.4 billion for their Affordable Homes Programme, taking total investment in this programme to over £7 billion to build around 225,000 affordable homes in this Parliament.
This will include Rent to Buy homes alongside shared ownership. Rent to Buy will help households to benefit from a discounted rent set flexibly at levels to make it locally affordable so they can save for a deposit to purchase their home.
The government intend to amending planning rules so councils can proactively plan for more long-term Build to Rent homes and a consultation has been launched to allow developers to offer more affordable rent alongside other forms of affordable housing.
Ministers have reaffirmed the government’s commitment to the green belt – that only in exceptional circumstances may councils alter green belt boundaries after consulting local people and submitting the revised Local Plan for examination, and set out for the first time all the actions local authorities must take before considering the green belt.
The plan for ‘Urban Regeneration’ includes: strengthening national planning policy to create a ‘de facto’ presumption in favour of housing on suitable brownfield land and to drive up density levels in high demand areas while ensuring that developments are well-designed and respect the character of the local area.
Also taking action to radically increase brownfield development and to bring life back to abandoned sites.
The government will continue to support local authorities to encourage efficient use of the housing stock and make best use of homes that are long-term empty.
Local authorities already have powers and incentives to tackle empty homes and can earn financial rewards through the New Homes Bonus for bringing an empty home back into use. They also have flexibility to impose a Council Tax premium of up to 50% (on top of the Council Tax bill), on properties that have been empty and substantially unfurnished for more than 2 years.
At May 2010 over 300,000 homes in England were standing empty for longer than 6 months. As of October 2015, the number of long-term empty properties had fallen to 203,596.
Some buyers are not aware that buying a leasehold house can be more expensive than a freehold house in the long run and that ground rents can increase significantly over the lease period. The government intend to consult on a range of measures to tackle unfair and unreasonable practices.
Communities Secretary Sajid Javid said:
“Walk down your local high street today and there’s one sight you’re almost certain to see. Young people, faces pressed against the estate agent’s window, trying and failing to find a home they can afford. With prices continuing to sky rocket, if we don’t act now, a whole generation could be left behind. We need to do better, and that means tackling the failures at every point in the system.
“The housing market in this country is broken and the solution means building many more houses in the places that people want to live.
“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.“
Housing Minister, Gavin Barwell said:
“We are setting out lasting reforms that will get more of the right homes built in the right places, right now.
“We owe it to our children and our grandchildren to fix the broken housing market problems and help them find a home of their own.”
The housing white paper can be read in full here.
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