Today, Sajid Javid unveiled the new Housing White Paper, the Government’s proposals to fix “our broken housing market”. From its title onwards, it puts the shortage of housing and affordability crisis into sharp focus, and sets out many ideas to try and address these. In The Commons today, Javid called it “one of the biggest barriers to social progress this country faces”. The paper doesn’t shy away from the 2015 target of 1 million new homes by 2020, which means that the target is now for 250,000 new homes build per year. The paper is broken down into four parts, which we will look at in turn, before providing our thoughts.

HOMES IN THE RIGHT PLACES

To identify where housing need is highest, councils will be required to publish realistic projections and review them at least every five years, and the Government will consult on how to implement a standardised way of calculating this.

Councils and developers will be encouraged to avoid low density housing where land is in short supply, especially around transport hubs, and height restrictions will be relaxed. Alongside this, there will be a consultation and review of space standards: influenced by the work of developers like Pocket Living, the Government will review the Nationally Described Space Standard, to ensure that they suit modern demands and design methods.

To get more out of unused sites, there will be a de-facto presumption in favour of housing on suitable brownfield land, and on surplus public land. The Government already has plans to release land for 160,000 homes over this Parliament, and a further 160,000 from Local Authorities. The Government plans to be more transparent about land ownership – in particular to reduce the issue of ‘land banking’ – and will make more data about land ownership more readily available, with the aspiration for HM Land Registry to become a world leader.

The White Paper sticks to the 2015 manifesto to protect the Green Belt from development except in “exceptional circumstances”.

BUILDING HOMES FASTER

The White Paper contains proposals for both councils and developers to help speed up the housebuilding process, and to reduce the lag between the granting of planning permission and the start on site.

The Government wants to get Local Authorities processing applications faster, and will allow them to increase planning fees from July if this is invested in their planning departments. However, Local Authorities will be subject to a new Housing Delivery Test, to make them more accountable for building new homes. Where they are under-delivering, authorities will be penalised, from having to publish an action plan to address the problem, to implementing the National Planning Policy Framework’s “presumption in favour of sustainable development”, which makes it very difficult to refuse planning permission.

The paper states there is a review planned into CIL and Section 106 payments, with the aim of simplifying developers’ contributions. The stick to that policy carrot however, the Government is planning to amend policy to reduce the time allowed between planning permission and starting on site from three to two years. It will be made easier for authorities to serve a completion notice, where they can withdraw permission if development has stopped and there is no prospect of completion, and new guidance will be prepared to allow local authorities to use Compulsory Purchase powers to see the completion of previously stalled sites.

DIVERSIFYING THE MARKET

In order to encourage competition and diversity in the market, the White Paper is supporting small and medium sized firms to re-enter the market, which has been dominated by a handful of big firms since the Financial Crisis. They will have access to the £3bn Home Building Fund, for SME firms to deliver up to 225,000 new homes, and provide funding for innovative construction methods, and custom-built homes on small plots. This also ties in with the new Industrial Strategy as a way to increase productivity, training and skills in the construction industry, for example off-site production.

The market is also to be expanded in terms of tenure, with a desire to attract institutional investment in the ‘build-to-rent’ private sector, which already has £4.5bn funding allocated. The Government hopes that expansion in this sector will drive up the housing supply, increase choice and quality in the rental market, and provide more family-friendly tenancies of three or more years. 

HELPING PEOPLE NOW

Following up on announcements from the previous Government, the White Paper confirms the introduction of the Lifetime ISA, and Starter Homes. The latter however will be amended, so that rather than insist all new housing developments include 20% starter homes, policy will simply state that 10% must be available for some form of affordable home ownership.

This is part of the recognition that many more people are living in privately rented accommodation, and this is unlikely to change soon, so the Government will continue to legislate to ban letting agents fees to tenants (a policy already introduced by the Scottish Government), and will introduce banning orders for the worst landlords. 

NUDGE FACTORY THOUGHTS

This White Paper has been trailed for many months, and has been delayed several times since Ministers first announced it would be published in Autumn last year. Sajid Javid and Gavin Barwell briefed that it would contain radical new policies and represent a step-change in the country’s approach to housing, and given the delays, expectation built up. It is easy to be disappointed by today’s publication: it contains few proposals that had not already been announced, let alone radical ones.

It would appear that the delays have been a result of back and forth between Javid and Barwell and Conservative backbenchers concerned about development on the Green Belt, and the firm commitment to protecting the Green Belt suggests it was the backbenchers who won. Conservative MP Andrew Mitchell, who has vocally opposed construction on the greenbelt in his Sutton Coldfield Constituency, has been on the news talking about the issue several times recently.

However, there are many positive changes made that will encourage the industry. Pressuring councils to make more land available for housing in their Local Plans, and introducing a standardised way to measure housing need, will be a vital way to ensure local accountability. There are plenty of incentives for developers to build houses faster, and it is very sensible to allow greater densification in urban areas and around transport hubs, while reviewing space standards is well-overdue to ensure that legislation catches up with improvements that have been made in designs which allow much better use of smaller homes.

Giving greater support to smaller builders will certainly help diversity and quality in the market, and are better suited to unlocking smaller sites, as well as taking advantage of innovative construction methods like modular housing. Whether these changes are just tinkering around the edges of the problem, or will add up to greater than the sum of their parts, remains to be seen.

What this does represent is a change in attitudes from a Conservative government. Moving away from a singular focus on home ownership, this White Paper talks explicitly about building more of every tenure, with a lot of proposals about improving the lot of private renters, with longer tenancies and greater protections. This is quite a firm change in direction from the previous Government, and clearly a lot of political capital is being spent on pushing this through. Javid and Barwell have been working hard for many months on this paper, with support from Greg Clark, and Theresa May has written a two-page foreword to the paper, longer than she has for any other policy paper as Prime Minister. Tackling the housing issue is a key part of her Government’s appeal to the JAMs, the ‘just about managing’, and the Prime Minister and senior Cabinet Members are now heavily invested in hitting the high targets they have set themselves.

Consultation on the White Paper is now open until 2 May 2017, while many of the measures announced are themselves subject to further consultation and legislation. It will likely be several months, and indeed well into 2018, before many of the policies outlined today are implemented. We will be watching carefully to see how these progress, and if today’s rhetoric is matched in future output.

If you are interested in more information about our Local Government practice, please contact David Park (Partner) at david@nudgefactory.co.uk