The Government has set out new plans to re-dress a huge lack of housing stock in England and start to build new houses. They have unveiled a raft of measures which it hopes will stimulate the housing market, encourage more developers to build and increase transparency around land ownership in order to solve the UK’s housing crisis.
However, while the White Paper covered a lot of ground – including protecting the Green Belt and planning for development on public land – there was little detail on how many of the proposals will play out in practice.
The Plans include:
• Consulting on the principle of a new, standardised way of calculating housing demand. Every local area will need to produce a realistic plan and review it at least every five years. Currently, 40 per cent of local planning authorities do not have an up-to-date plan that meets the projected growth in households in their area. Fixing this will help make sure enough land is released for new homes locally, while continuing with maximum protection for the green belt. Councils and developers will also be expected to use land more efficiently by building at a higher density where there is a shortage of land and in locations well served by public transport.
• Developers will be required to start building within two years, not three, after planning permission is granted.
• Developers will be required to give more information on the progress of delivery of new housing in order to help address the growing gap between the number of planning permissions granted and the number of new homes completed.
• Help for small independent builders, including through the £3 billion Home Building Fund. Currently around 60 per cent of new homes are built by just 10 companies. The fund will help build more than 25,000 new homes this Parliament and up to 225,000 in the longer term by providing loans for small builders, offsite construction and essential infrastructure.
But the feeling is that other very pressing issues have been side stepped:
• Downsizing; It is estimated that only 90,000 people downsize to smaller homes every year, leaving £835bn of housing equity tied up in 2.9m houses lived in by over-65s with more than two extra bedrooms. There had been suggestions that the Government could reduce stamp duty for downsizers although this, as well as any other reforms to the unpopular tax, did not materialise.
• Starter Homes and Stamp Duty; A previous commitment to build a total of 200,000 starter homes was not mentioned in the white paper, nor was the long-standing one million homes target by 2020. There was also no indication of any changes to stamp duty – something which some developers say has been subduing the market.
• Council House Building; Despite plenty of detail on how councils should be planning development in their area, the Government also seems to be moving away from encouraging councils themselves to build, instead choosing to encourage private housebuilders and housing associations.
The truth is that our housing supply-demand imbalance will not be solved any time soon: the Government’s pledge to build 200,000 homes per year is still way off target. Investment in house building is on hold and until there are enough homes built, the lack of supply will mean steady increase in house prices in the U.K., regardless of Brexit.