Long awaited Housing White Paper published
On Tuesday 7th February the government finally published the much anticipated White Paper on Housing.
Ideas of what this paper might promise were offered by the House of Lords select committee's excellent paper on 15 July 2016 entitled 'building more homes', led by the highly respected Peabody Chair, and former Homes and Communities Agency (“HCA”) chief executive, Lord Kerslake. This clearly lays out a number of issues with both policy and procedure (in both the public and private sector) which have exacerbated current issues. A number of key themes follow through from that paper into the White Paper.
So is this the grand fix of the (to take a phrase from the Communities Secretary Sajid Javid) "broken" housing market, or is it (as in the past) a further rehashing of historic policies, tantamount to 'tinkering around the edges'? Well it seems fair to say that it falls somewhere in the middle - it stops short of being a grand plan to cure all ills, but does go further than previous policies in identifying the need for supply-side reform of this particular market. It has a more focussed feel to it, and (more importantly) it recognises the need for long term change rather than a short-term fix, and it also proposes ways to help 'people now' to prevent them being shut out of the market until the changes take effect. This two tiered approach has not often been seen in such papers and is welcomed.
The White Paper sets out four areas of focus:
- Planning for the right homes in the right places
- Building Homes faster
- Diversifying the Market
- Helping People Now
1. Planning for the right homes in the right places: this aims to ensure the release of enough land in the places it is needed, to make the best possible use of that land, and to allow communities to control development and what it looks like. Highlights of some of the key points here are:
- Increased transparency around land ownership: All publicly held land in "areas of greatest housing need" will be registered by 2020, with the rest to follow by 2025. There is also a proposal for increased transparency on contractual arrangements over land (i.e. option agreements). In addition, proposals are set out to reform covenants and interests over land.
- Maximising brownfield and Surplus Public Land sites: There will be a presumption in favour of brownfield sites (supported by amendment to the National Planning Policy Framework (“NPPF”)), and a £45m fund for Local Authorities (“LAs”) to release their surplus land for development. Brief reference is also made to allowing LAs to dispose at less than best consideration - though is likely that already stretched LA budgets may prefer to seek the best value for these assets in many cases.
- Facilitating the delivery of more small and medium size development sites: This is to be encouraged, and goes hand in hand with diversifying the market, below. However, the success of this may well depend on the success of other measures regarding simplification of planning.
- The government is to legislate to allow New Town Development Corporations to be set up for local areas.
2. Building Homes Faster: This is a statement of intent to tackle the delays and opacity of the planning system.
- Planning Fees: LAs are to be permitted to increase planning fees by 20% from July 2017, on a ring-fenced planning departmental basis. This seems a logical step (albeit one which many developers and housing associations may view with dread) but one hopes such fees will still need to be reasonable.
- An additional £25m of funding to help ambitious authorities in areas of 'high housing need' to plan new homes and infrastructure.
- Planning Conditions: The government plans to legislate, through the Neighbourhood Planning Bill, to allow the Secretary of State to prohibit any conditions that do not meet national policy tests (so as to streamline delivery of developments).
- Community Infrastructure Levy (“CIL”) reform: the government does not believe CIL has simplified the system of developer contributions enough since its introduction and proposes to review the CIL system and announce any changes in Autumn 2017.
- Apprenticeships: a skills shortage is anticipated as being a risk to progress, so apprenticeships are proposed.
- Compulsory Purchase (“CPO”): CPO is pushed as a preferred option for stalled sites. As well as local authorities utilising this further on stalled sites, the HCA (which has broad CPO powers) is to be directed to use these more 'proactively', whereas its previous policy was to only intervene where LAs could not use their powers.
- Improved planning tools: It is proposed to:
- allow LAs to take into account previous failures to implement permission on a site, or an applicant's track record;
- reduce the period for implementation from three years to two years;
- amend the completion notice procedure to allow permission to be withdrawn over part of a site.
- Testing delivery: There is to be a new Housing Delivery Test to monitor progress in delivering the above proposals.
3. Diversifying the Market: The current monopoly by the big 10 developers is not healthy to either pricing or innovation. The paper states a desire to diversify the market to achieve greater amounts, quality and choice of housing. Some key points here are:
- Smaller developers: The Government wants to open the market up to smaller builders, and has already taken steps in this regard with the £3bn Home Building Fund launched in October last year. Custom build homes (i.e. homes built to specifications of individual purchasers who are identified and pay up front) are also identified as an area for increased delivery.
- A separate regulator for housing: The housing regulator is once again to become a stand-alone body.
- Housing Associations: the government confirms it will set out its rent policy for the period beyond 2020 shortly (though the 1% rent reduction will remain until 2020). There is also an expectation that Associations continue to build where they can.
- Local Authority building: LAs are to be encouraged to build homes.
- Modern Methods of Construction: There is also a stated desire to push for more modular and factory built homes (i.e. off-site builds), though it is doubtful how much of an impact this will have.
4. Helping People Now: Current pricing in England is among the highest (and affordability among the worst) in the Organisation for Economic Co-operation and Development. The reforms proposed in the paper will take time to have effect so in the meantime the government proposes the following:
- Help to Buy: This is being extended to 2021
- NPPF: The NPPF is to be amended to:
- promote Starter Homes, and their acceptance on rural exception sites;
- require a minimum of 10% of affordable homes on all housing sites.
- Voluntary right to Buy: This is to be continued to be pursued via HAs.
- Relaxation of Affordable Homes Programme funding: This has been relaxed to now allow funding for multiple types of units (including the favoured Affordable Rent) in place of the previous restriction for shared ownership only.
- Help for Renters: There is help proposed on:
- banning letting agents fees (subject to consultation) and
- (further to plans in the Housing and Planning Act 2016) identifying and banning the most unsafe landlords and agents from operating, with fining powers for LAs; and
- Promotion of longer tenancies in the private rented sector.
- Homelessness: a (welcome) reform of homelessness legislation is proposed.
Overall, the view of this paper must be that it is a solid foundation on which to reshape the market, and it seems much more focussed in its aims than previous attempts. There are no efforts here (as in previous ‘reforms’) to shore things up by simply piling money at buyers to keep up with prices, but there seems a real desire to attack the causes of the problem. That is to be acknowledged and welcomed, especially proposals for LPAs to keep the planning fees and be able to take non-implementations into account; reforms to land ownership information and pushes for development of brownfield land and development by those outside the usual big-10 developers. However the hard work will start now as while the Paper is, in all reality, a list of proposals, serious work will be needed to bring them into policy and start delivering these long-overdue reforms, and ensure the 'broken market' is repaired more permanently.
Please contact Kevin Edwards, Associate in our Development team for more information or advice on any issues raised in this report.