White paper could put our housing market in order

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The Secretary of State for Communities and Local Government, Sajid Javid, has now unveiled the much anticipated Housing White Paper – Danielle Newbon from our property team looks at the key issues the consultation paper raises for homebuyers, developers and the rental sector.

The Housing White paper follows a push by the government to build at least one million homes by 2020 (200,000 per annum), an extremely tough target when you consider 190,000 homes were built in 2015/16 while the average build rate since the 1970’s has been 160,000.

Danielle says: “This is certainly not a new concern as there has been talk of a housing crisis for some time, as there are more people wanting to buy than there are residential properties for sale.

“We hope that the result of this Government White Paper will be an increase in residential property for sale in the UK, as it has the potential to make a difference over the long term.”

So far the paper has met with a mixed reaction from the property industry, so here are some of the headlines:

Developers

• Developers that do not build on sites where they have planning permission could have their land seized by local authorities using compulsory purchase powers. The land will then be auctioned off and the proceeds paid back the original developer.
• Developers will be expected to give up-front information about the scale and timing of their developments, and large builders may have to publish their build out rates.
• The government is considering shortening the time for a developer to implement a planning permission from three years to two, and make it easier for local authorities to serve completion notices which revoke planning permission on sites with no prospect of completing.

Local Authorities

• The introduction of a new housing delivery test will highlight local authorities that do not deliver the homes their area needs. In these areas a presumption in favour of planning permission will be introduced.
• From November 2018 if housing delivery is less than 25 per cent of need as identified in the local plan then developers could be granted automatic permission. This increases to 45 per cent in 2019 and 2020.
• Every local authority will have to draw up and regularly review their local housing need. Any authority which does not have a local plan in place (which should be revised every five years) may risk government intervention.

Homebuyers and renters

• The starter homes policy allowing first-time buyers a 20 per cent discount on new homes, and required builders to ensure these homes accounted for 20 per cent of their developments has been dropped. Now 10 per cent of developments will have to consist of ‘affordable home ownership’ properties.
• There was encouragement for “build to rent” schemes where private companies and Housing Associations build large-volume affordable rental flats for tenants. The government is also considering plans to offer three-year tenancies on all BTR schemes.
• Encouragement for older people to downsize through measures such as help with moving costs by changing the stamp duty charges in a bid to help free up larger properties which are currently under-occupied.

Danielle concludes: “Whether such measures will work in practice will have to be seen, as shareholders in the construction industry will resist attempts to restrict the number of sites held as part of their investment portfolio.

“But the commitment to full transparency on the ownership of land and land options is welcoming. More information from developers could help cut the discrepancy between planning permission being granted and new homes being built.

“Councils will also have an opportunity to release public land for new housing, though the rules on building on green belt remain unchanged and will only be considered in exceptional circumstances.”

Anyone interested in legal advice on buying, developing or renting land or property can contact Danielle on 01889 598888 or email dn@bowcockpursaill.co.uk