February 27, 2017
The Housing White Paper – what does it mean for London Property?
One news story has been dominating the property world in recent weeks. We are, of course, referring to the release of the government’s long-awaited Housing White Paper.
It was originally supposed to be released last year, and then early this, but the government finally outlined its plans in the first week of February on how it proposes to ‘fix’ the broken housing market.
In fact, the Housing White Paper itself was titled ‘Fixing our broken housing market’ and set out a number of ways in which the government hopes to grow the supply of new homes in England.
The document, spanning 104 pages, was presented to Westminster by Communities Secretary Sajid Javid, with the reaffirmation of housing policy schemes like Help to Buy alongside various new proposals to speed up planning and deliver more rental homes.
The industry reaction was mostly muted or unfavourable, with the government accused of producing more great soundbites rather than realistic solutions.
What, though, were the main proposals put forward in the Housing White Paper?
A bigger role for smaller builders
Currently, figures suggest that 60% of all new homes in the UK are built by just 10 large house-building firms, with small and medium-sized builders often shut out. The government wants to encourage smaller developers to build more homes, using modern methods to build them more quickly.
Higher density building is also required, with more high rise flats and mansion blocks, as well as an increase in homes in areas with good transport links. The government are incentivising local authorities by offering them up to 20% more money if they commit to spending it on planning departments.
Protection of the green belt
There had been concerns, before the Housing White Paper had been released, that the government would seek to loosen current legislation surrounding the green belt, to ensure more homes could be built on it. Tory MPs, whose constituencies tend to include large swathes of the green belt, led a huge backlash against such proposals.
While the plans were never concrete, any that did exist were shelved before publication. Instead, the government reasserted its commitment to protect green belt land at all costs.
An end to land banking
The government has promised to discourage developers from land banking – where developers sit on land they own to increase its value as land values and house prices both rise. One way it proposes to go about doing this is naming and shaming those sitting on undeveloped land and empty homes, something that will be achieved by allowing the Land Registry to make personal ownership details publicly available.
Speeding up the planning process
This has long been talked about, but very rarely acted upon in a successful way. New developments are still all too often beset by delays, complications and ‘NIMBYism’ when it comes to planning permission.
To change this, the government will ask local authorities to come up with detailed housing plans by April 2018, based on local housing needs and local demand for housing. If the local authorities don’t stick to their target number of homes, the government will step in and hold them to account.
Helping first-time buyers
Nothing much was offered for this demographic that hasn’t already been offered, with the government merely repeating its commitment to the various Help to Buy schemes, as well as Shared Ownership, Right to Buy and Rent to Buy.
More detail was at least offered on the government’s flagship Starter Homes scheme, which aims to help 200,000 first-time buyers onto the ladder in the next five years with a 20% price discount against current market rates. Discounted prices are capped at £450,000 in London and £250,000 outside of the capital.
Ban on letting agent fees
The government confirmed its commitment to banning upfront letting agents’ fees to tenants, with promises that the introduction of the new legislation will be fast-tracked as much as possible.
A consultation period will have to be carried out beforehand, and there is still doubts about whether the ban will be introduced before 2018 at the earliest.
Further red tape for landlords
Landlords haven’t been dealt a very good hand by the government in recent years, and the White Paper has revealed that landlords may have to contend with extra red tape and regulations, including compulsory electrical checks.
The government’s also keen to implement longer-term tenancies, to give tenants extra security and make renting more appealing to families. Opinion is divided on long-term tenancies, with some lamenting it as a restrictive, inflexible measure, while others like the idea of strong and consistent rental income over a set period of time.
The Housing White Paper wasn’t met with many warm words, with the general consensus being that the government must go further, and do more, to fix the issues at the heart of the housing market. It seems, once again, that much has been promised, but the delivery of these promises is much less clear-cut.
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