Time to act on Housing

As we move into February, there’s still little sign of the promised White Paper on Housing. We ask our planning and development team what it means, what to expect – and what the White Paper really needs to include.

Andy Martin, Managing Partner

We can expect to see an emphasis not just on delivering enough homes, but delivering the right sort of homes. There will therefore be a focus on increasing different types of housing delivery, particularly PRS and student housing – desperately needed to ease the pressure on housing stock in university towns currently posed by Houses in Multiple Occupation (HMOs).

It will be interesting to see whether the White Paper addresses the status of Neighbourhood Plans in more detail. The Government has already made moves to strengthen Neighbourhood Plans in areas where the local authority does not have a five-year housing land supply, but these are currently facing legal challenge. It may therefore choose to hold back any further measures at this time.

Finally, the White Paper’s emphasis on delivery means there is likely to be more clarity on the role that the public sector has to play bringing forward new homes.

Perry Miller, Partner

The Government will start to express its frustration with the major housebuilders at what it believes, erroneously, is an attempt to regulate the flow of new build properties in order to maintain margins and build profits. There will be talk of build-out rates and construction timetables being agreed as part of the granting of consent with, potentially, an applicant’s previous performance in that planning authority becoming a material consideration. A land tax on sites not built out within a certain timeframe seems a step too far for this government and fraught with difficulties in implementation.

As part of this, I think there could be further measures and funding to support SME developers. As we know, for a local authority it is far better to have 10 small sites, each building out 50 homes, than it is one 500-unit scheme. The Government may also choose to progress a few sites itself on HCA land to show what can be done, implementing the above and using modular construction.

This also represents in part an attempt to diversify the housing market, and ensure the delivery of housing which actually matches demand in the local area. We’ll get clarity on starter homes and I wouldn’t be surprised if the percentage required on all sites is reduced to 10%. This will then give councils more flexibility to deliver affordable homes that their OAN requires. We are also likely to see measures to encourage the PRS, presumably through changes to tax treatment including stamp duty.

It is also interesting to consider which measures the Government seems unlikely to implement. Green Belt land swaps, for example, seems less likely now, as a nervous PM – trying to placate backbenchers for Brexit – rows back from more radical ideas.

Kai Stormer, Account Director

From our conversations with contacts at  the Department for Communities and Local Government (DCLG), we’re expecting the key themes of the White Paper to be a focus on delivery, design, and deprivation. The Government will continue to put pressure on developers to develop more housing, moving housing even higher up the Government agenda. More stick than carrot is expected for larger developers.

With regards to design, modular housing and off site construction may be seen as one way to overcome the shortage of housing supply and the “challenge” within the industry of having to start from scratch for every development. The flip-side is whether we have the right developers in the UK to deliver on this or whether we will see more international developers (China, etc.) establishing a foothold in the UK and increasing their market share.  Linked to council housing/affordability, the challenge remains to provide “affordable” housing particularly in the London. Modular housing may be part of the solution to this.

Skills is a major issue, which the White Paper needs to address. According to the Farmer Review, commissioned by the Government last year to report on the state of the UK’s construction labour market, the industry is already facing a skills shortage of 20-30% and that’s without the expected immigration challenges posed by Brexit. The White Paper could see a reference to this and potential suggestions in order to raise the profile of the industry.

Douglas Johnson, Account Director

It’s tempting to read into the ongoing delays in the publishing of the White Paper – particularly recent claims that a draft was stopped at the door by Number 10. There are two plausible explanations for this. The first is that, after six years of drawing and redrawing housing policy, the Government is running out of new material and struggling to pull together a White Paper of sufficient weight in time.

The second is that the Supreme Court’s recent decision that the Government will require Parliamentary approval has changed the White Paper’s context. The Government has a slim majority, and many of its own MPs hold constituencies in the Green Belt. In the latest delays to the White Paper, we may be seeing the Government carefully reviewing potential policies and asking whether any will alienate its own backbenchers in the coming months.

The Government has trailed heavily what we should expect from the White Paper. Housing Minister Gavin Barwell listed priorities as releasing more land for housing, speeding up housing delivery and diversifying the housing market in a recent speech. These are good priorities, but it is unclear whether the detail of the White Paper will actually go any way to address the structural issues facing the housing market.

Punitive measures against developers not building at the rate the Government would like could well backfire, for example, simply leading to housebuilders exercising more caution in which sites they bring forward. Other potential measures, such as promoting good design to fight local political residents, sound like tinkering: I have seen enough clients bring forward beautifully designed schemes in the face of fierce local resistance to question this.

Nikhil Ramakrishnan, Associate

We’re likely to see a modular housing ‘push’, which has been advocated by Sajid Javid previously. In London, City Hall has also supported this method of dealing with the housing crisis and Deputy Mayor for Housing James Murray has in the past said modular construction was “one part of the answer”.

Cited as a major barrier to housebuilding, the cutting of red tape in regards to speeding of the delivery of housing is likely to be a topic of note. Previously mentioned in the Queen’s speech of May 2016, the Local Government Association (LGA) welcomed plans to speed up the planning process, but I predict further measures to be put in place for the new Housing White Paper.

Something slightly different from land, planning and housing types and tenures, I think there will be a pledge to invest in skills, especially in relation to construction with a definite shortage in this industry. Government is likely to put money into apprenticeships.

Kate Durrans, Associate

In the Housing White Paper, I expect to see a focus on shared ownership and affordable housing, with an increase in funding, land reform to incentivise developers in the build-to-let sector, prioritising developers which specifically look at helping the ‘Just about managing’ (JAMS) and further detail on the policy of ‘Starter Homes’ that began under David Cameron’s leadership. We’ll also see more devolution of housing powers, with more fiscal devolution and standards responsibility offered in exchange for progressive housing programmes. Finally, we can expect attempts to diversify the market, with measures to try and tackle the monopoly within  industry and benefits for emerging developers taking on new methods of delivering more affordable housing,  for example, modular housing developers.

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