Today sees the release of the hotly anticipated Housing White Paper. After the endless speculation, the frenzied lobbying by a stream of commentators and industry insiders and the trailers put out by Government itself, the document itself is just a bit, well, obvious. In other words, ‘Spoiler: there’s no silver bullet’ (as tweeted this morning by Gavin Barwell MP, Minister for Housing). The truth is, that having debated all the ideas in our heads and in column inches over the past months, there’s not much more left to say: there’s a housing crisis of affordability and availability and we need to get on and fix it.
To give him his due, Sajid Javid MP, Communities Secretary, was honest this morning when he described the housing system as ‘broken’. Cynics among us might note that his party has been in government for the past seven years and has had ample time to deliver. John Healey MP, Labour’s housing spokesperson, in noting that homelessness has more than doubled since 2010, drily remarked that: ‘those hundreds of young people on the street are actually sleeping rough these days not pressing their faces against estate agents’ windows’. Apparently, neither of them has heard of Zoopla…
Certainly, there is a lot at stake here. If the current crisis is the ‘greatest barrier to social progress in Britain today’ (Sajid Javid), then the proposals in the White Paper really are at the centre of ensuring that this becomes a country that works for everyone. Early signs are promising: Gavin Barwell tweeted after his appearance on Peston on Sunday (where he trailed the plans): ‘Something very strange going on today – just checked my Twitter mentions and (most) people are being vaguely complimentary’.
The headlines position the White Paper as a marked shift away from the Cameron/Osborne era that pursued home ownership above all other tenures. Ministers instead now talk of the need to respond to those who ‘want to rent’ (for which read ‘have to rent’, with housing affordability so lacking in parts of the country) and propose a raft of measures to tackle unaffordable rents, short-term tenancies and ‘rogue landlords’ which make life so difficult for the JAMs (‘Just About Managing’ families).
The other, less-commented upon shift is the move away from absolute faith in the major housebuilders to deliver. Previous policy announcements have given developers pretty much all they asked for; this time, Ministers are starting to turn the screws on build out rates in order to drive delivery.
The new target is 225-275,000 additional homes per annum – and to achieve it come plenty of initiatives for speeding up the process. Whether Conservative backbenchers and their constituents, incensed at what they consider Javid’s failure to stand up for the Green Belt, stick a spanner in the works, remains to be seen.
The UK has had Western Europe’s lowest rate of housebuilding for the past three decades. The White Paper outlines the problem as threefold: not enough local authorities planning for the homes they need; housebuilding that is too slow; and a construction industry that is too reliant on a small number of big players.
In response, Sajid Javid outlined three key themes:
1. Getting the right homes built in the right places
Tackling local councils’ ability to frustrate housing delivery by fudging the numbers is at the heart of the White Paper: currently, 40% of local planning authorities do not have a plan that meets the projected growth in household numbers.
* A standardised method for calculating local housing need will therefore be imposed by April 2018 in a move that may hark back to pre-Localism days, but which is intended to ensure that honest housing targets are established in each local authority area and then reflected in realistic Local Plans. Lack of a standard approach has led to lengthy discussions at public examination, leading to delay and huge costs.
* Local Plans will need to be in place in all areas and will need to be reviewed every five years. If necessary, Government will intervene to ensure that they are put in place ‘so that communities in those areas affected are not disadvantaged by unplanned growth’. This is a concept that some communities continue to fail to grasp: that up-to-date plans provide clarity on where homes should be built and can bring an effective end to speculation.
* There will be moves to increase transparency around land ownership so that it is clear where land is available and where organisations are buying land suitable for housing but not building. The Land Registry will aim to achieve comprehensive land registration by 2030, including all publicly-owned land in areas of greatest housing need by 2020.
* There will be a presumption that brownfield land is suitable for housing unless there are clear and specific reasons to the contrary. To this end, the NPPF will be amended to indicate that ‘great weight’ should be attached to the value of using suitable brownfield land within settlements for homes.
* The commitment to protecting the Green Belt remains firmly in place. With Green Belt accounting for just 13% of land in England (a figure that has remained largely stable for the past 20 years), Ministers believe there is no need to stray into this territory. If anything, the protection will be more explicit, with national policy amended and expanded to make clear that authorities should only amend Green Belt boundaries when they can demonstrate that they have examined fully all other reasonable options, including a defined set of criteria.
* In a further boost to Neighbourhood Plans, groups will be able to obtain a housing requirement figure from the local authority to enable them to prepare their Plan, even when there is no Local Plan in place.
2. Speeding up delivery
More than a third of new homes that were granted planning permission between 2010-11 and 2015-16 have yet to be built. The reasons for that are manifold but
there is a head of steam building within DCLG behind the idea that developers and speculators land bank.
Measures proposed include:
* An increase in nationally set planning fees to ensure that planning departments are properly resourced, in response to developer complaints about delays and capabilities. Local authorities will be able to raise fees by 20% from July so long as they commit to invest the money in their planning team. The Government is considering allowing those authorities that are delivering the homes they need to raise their fees by a further 20%.
* As already announced, local authorities will only be able to use pre-commencement conditions – a continuing source of complaints – with the agreement of the applicant.
* In a move certain to cause unease among the major housebuilders, the Government proposes to require them to publish aggregate information on build out rates. As the industry has emphasised repeatedly, build out rates are determined by many factors outside of developers’ control. The Government hopes that better information on delivery against plan targets will help communities ‘challenge developers on their performance’.
* In what appears to be a less than objective test, local authorities will be encouraged to consider how realistic it is that a site will be developed when deciding whether to grant planning permission for new homes, on sites where previous permissions have not been implemented.
* An applicant’s previous track record of delivering similar housing schemes could be taken into account by local authorities when determining applications, depending on views the Government receives during consultation on the White Paper. This proposal would apply only in respect of large scale sites and where the applicant was a major developer.
* Finally, consideration is being given to shortening the timescale for implementing a planning permission from three years to two.
* And as the quid pro quo, a new housing delivery test will be introduced to ensure that local authorities are delivering the new homes they planned for.
* The Government’s response to the review of the Community Infrastructure Levy (CIL) will be published at the time of the Autumn Budget 2017.
3. Diversifying the market
The structure of the housing market, in which 60% of homes are built by just 10 major developers, makes life very difficult for new entrants. That lack of competition, according to Ministers, stifles innovation and leads to sluggish productivity growth.
* Local authorities will be expected to have policies that support the development of small windfall sites, while ‘great weight’ should be given to using small undeveloped sites within settlements for homes.
* The £3 billion Home Building Fund will provide £1 billion of short-term loan finance targeted at SMEs.
* New methods of construction, including off-site manufacture and modular homes will be encouraged.
* In an effort to further boost investment in the private rented sector, and deliver affordable homes for rent, the Government is proposing to change the NPPF so local authorities are encouraged to plan proactively for Build to Rent where there is a need and to make it easier for Build to Rent developers to offer affordable private rental homes.
* So-called ‘family-friendly’ three year tenancies will be made available, although without legislation this seems difficult to enforce.
* Finally, without much enthusiasm, the Government commits itself to working with local authorities to ‘understand all the options for increasing the supply of affordable housing’. Council housebuilding is described as a ‘small, but important and growing source of new homes’.
4. Immediate actions
Perhaps conscious that many of the measures above will take time to bed in, the Government has also announced some immediate proposals to tackle the impact of the housing crisis.
* A Lifetime ISA to help first-time buyers save for a deposit will be introduced in April. It will help ‘younger adults’ to save for the long-term by giving them a 25% bonus on up to £4,000 of savings a year. We hope that the terms and conditions attached to this ISA are clearer than those that applied to the Help to Buy ISA (introduced in 2015) which left may people feeling cheated after it became clear that the ‘bonus’ was only paid once a property had been bought and so could not be used to top up the initial (and crucial) deposit.
* Starter homes policy is made clearer. They will now only be available to those earning under £80,000 (£90,000 in London) and there are to be no cash buyers. Additionally, the repayment period will be stretched to 15 years, rather than the five previously envisaged, discouraging speculation. Furthermore, the previously proposed requirement for 20% delivery on all developments is to go, with the NPPF amended to make it clear that housing sites must deliver a minimum of 10% ‘affordable home ownership units’, the level of starter homes within this mix being for developers and local authorities to determine.
* Recognising that over 4 million households now rent privately, a range of measures to tackle affordability and security are being proposed. These include: a ban on letting agent fees to tenants; banning orders for the worst landlords; and family-friendly three-year tenancies on new build rental homes.
‘Feeble beyond belief’ was the reaction of John Healey MP, Labour’s housing spokesperson, whose first words at the Despatch Box today were ‘Is this it?’. His soundbite for the day may well indeed be his description of the document as a ‘white flag not a white paper’. In noting that the Government had already had seven years to fix the housing market, he called for an end to homelessness, a charter for tenants and a major affordable housebuilding programme that acknowledged the role that councils can play.
Councillor Martin Tett, housing spokesman for the Local Government Association noted that the White Paper included ‘some encouraging signs that government is listening to councils on how to boost housing supply and increase affordability.’ He reiterated that nine in 10 planning applications are approved, ‘but increasingly the homes are not being built. Giving councils the power to force developers to build homes more quickly and to properly fund their planning services is vital for our communities to prosper.’
David Orr, Chief Executive at the National Housing Federation said: ‘Land remains a critical barrier; we know that brownfield land alone is not enough. We urgently need to have honest conversations about how greenbelt land is used. He went on to note that: ‘measures to boost the scale and speed of supply – through planning mechanisms, tougher local targets and relaxed tenure restrictions – are all extremely positive steps towards ending the housing crisis.