A ‘bold, radical vision for housing’ or a ‘White Flag’ of defeat?

Today, the Secretary of State for Communities and Local Government, Sajid Javid, finally delivered the long-awaited Housing White Paper.

Heralded as a “bold, radical vision for housing in this country” by the Communities Secretary in his statement to Parliament, the Housing White Paper sets out the government’s plans to fix our broken housing market.

In this review, PLMR analyses the White Paper, highlights for you some of its key contents, and assesses how it has been received by stakeholders in central and local government, and in the property sector.  Is it the bold and radical plan needed to solve the Gordian knot of the UK’s housing crisis, or is it, as the Shadow Housing Secretary John Healey said, nothing more than the ‘white flag’ of a government with no new solutions to this decades-old problem?

What is the problem?

There is no doubt that radical measures need to be implemented to fast-track the delivery of new homes, both for ownership and for rent.  The White Paper highlights some of the challenges we face:

•We need between 225-275,000 new homes every year, but on average have built no more than 160,000 per annum since the ‘70s, creating an enormous shortfall
•The average house price has risen from less than four times the median wage in 1997 to nearly eight times median wage today
•In the 1990s a first-time buying couple on a low-to-middle income could save for a deposit in three years.  Today, they would have to save for 24 years
•An average couple in the private rented sector have to spend approximately half of their monthly salary on rent

Why is it so bad?

The White Paper identifies three major problems that need to be solved to deliver more new housing

1. Over 40% of local authorities do not have a plan that meets the projected growth in households in their area
2. The pace of development is too slow, with a large gap between permissions granted and new homes being built
3. The current structure of the housing market makes it harder to increase supply, with 10 commercial developers dominating the housing market

What’s the solution?

The White Paper acknowledges that the current problem is one that has built up over many years, and needs a ‘radical re-think of our whole approach to housebuilding’.

The proposed measures fall under four categories, and are set out in brief below:

1. Planning for the right homes in the right places
2. Building homes faster
3. Diversifying the market
4. Helping people now

Planning for the right homes in the right place

These measures are primarily targeted at local authorities, and developers may well be concerned at references to ‘giving communities a stronger voice in the design of new housing’, which many would argue is an ideal way of slowing housing delivery even further.  The proposed measures include:

• Ensuring every part of the country has an up-to-date, sufficiently ambitious plan so that local communities decide where development should go, not speculative applications.
• Simplifying plan-making to make it more transparent, so it’s easier for communities to produce plans and easier for developers to follow them.
• Ensuring plans start from an ‘honest assessment’ of the need for new homes and that local authorities work with neighbouring authorities more often when appropriate.
• Clarifying what land is available for new housing through greater transparency over who owns land and the options held on it.
• Making more land available for homes in the right places by maximising the contribution from brownfield and surplus public land, regenerating estates, releasing more small and medium sized sites, allowing rural communities to grow and making it easier to build new settlements.
• Maintain existing strong protections for the Green Belt and clarifying that Green Belt boundaries should be amended only in exceptional circumstances when local authorities can demonstrate that they have fully examined all other reasonable options for meeting their identified housing requirements.
• Giving communities a stronger voice in the design of new housing to drive up the quality and character of new development, building on the success of neighbourhood planning.
• Making better use of land for housing by encouraging higher densities where appropriate, such as in urban locations where there is high housing demand, and by reviewing space standards.

Building homes faster

Here we see some of the more potentially controversial measures, including increases to planning fees by up to 20%, and consultation on charging for appeals.  Measures that could make a significant positive difference include the encouragement of modern construction methods, such as offsite, and the implementation of the government’s new Accelerated Construction programme.  Measures include:

• Providing greater certainty for authorities that have planned for new homes and reducing the scope for local and neighbourhood plans to be undermined by changing the way that land supply for housing is assessed.
• Boosting local authority capacity by increasing planning fees.
• Consulting on deterring unnecessary appeals by introducing a fee (refunded if the appeal is successful).
• Ensuring infrastructure is provided in the right place at the right time by coordinating Government investment and through the targeting of the £2.3bn Housing Infrastructure Fund.
• Securing timely connections to utilities so that this does not hold up getting homes built.
• Supporting developers to build out more quickly by tackling unnecessary delays caused by planning conditions, facilitating the strategic licensing of protected species and exploring a new approach to how developers contribute to infrastructure.
• Taking steps to grow the construction workforce.
• Speeding up build out by encouraging modern methods of construction in house-building.
• Speeding up build out on surplus public sector sites through the Accelerated Construction programme that can build homes more quickly than traditional builders.
• Having addressed the things that developers say slow them up, hold them to account for the delivery of new homes through better and more transparent data and sharper tools for local authorities to drive up delivery.
• Having given them extra powers, hold local authorities to account through a new housing delivery test.

Diversifying the market

Here we see measures designed to broaden out the number and scope of participants in the housebuilding market, encouraging innovation in funding and delivery, and reducing over-reliance on the big 10 housebuilders.  Measures include:

• Helping small and medium-sized builders to grow through the Home Building Fund and supporting development on small sites.
• Supporting custom-build homes with greater access to land and finance, giving more people more choice over the design of their home.
• Bringing in new contractors through our Accelerated Construction programme.
• Encouraging more institutional investors into housing, including for building more homes for private rent with family friendly tenancies.
• Supporting housing associations to deliver more homes through a package of measures.
• Ensuring the public sector plays its part by encouraging more building by councils and changing the way the Homes and Communities Agency operates.

Helping people now

Javid acknowledges that solving the UK’s housing crisis will not happen overnight, and the White Paper includes a range of measures designed to help people from those wanting to get on the property ladder, to those seeking fairer rents, as well as the most vulnerable in society.  Measures include:

• Continuing to support people to buy their own home through Help to Buy and launching Starter Homes.
• Helping households who are priced out of the market to afford a decent home that is right for them through government investment in the Affordable Homes Programme, which delivers homes for shared ownership, rent to buy and affordable homes for rent.
• Making renting fairer for tenants.
• Taking action to promote transparency and fairness for the growing number of leaseholders.
• Improving neighbourhoods by continuing to crack down on empty homes and supporting areas most affected by second homes.
• Encouraging the development of housing that meets the needs of an ageing population.
• Helping the most vulnerable who need support with their housing, developing a sustainable and workable approach to funding supported housing in the future.
• Doing more to prevent homelessness by supporting households at risk before they reach crisis point as well as reducing rough sleeping.

The responses so far

Responses to the Housing White Paper so far have been somewhat muted at best.  Unsurprisingly, John Healey, the Shadow Housing Secretary was fiercely critical, asking Sajid Javid, “Is this it?” and saying the White Paper ‘will do nothing to reverse the housing crisis.’

Even amongst fellow Tories, the response has been less than effervescent.  Conservative MP and former Housing Minister Grant Shapps told the Daily Politics the White Paper “won’t make much difference” less than an hour after Javid’s statement to the Commons.

Brian Berry, Chief Executive of the Federation of Master Builders offered cautious praise for the White Paper, especially plans to allow hard-pressed council planning departments to increase fees, so long as those extra funds are ring-fenced for planning alone.

Philip Aldrick, Economics Editor at The Times, described the White Paper as “disappointingly underwhelming”, and this is a view echoed by numerous commentators from across the property sector.

PLMR’s view

There’s a lot to read through in the Housing White Paper, and as always with new government policy priorities, the devil is in both the detail and the implementation.  Some of the proposed measures to speed up the delivery process, such as encouraging the use of new building technologies, are genuinely innovative and may lead to tangible improvements, but it’s unlikely this will be at a level that will effect substantive change.

The counterpoint to this is that many of the measures will be seen as yet more tinkering by central government, tinkering that could create even more delays.  Local authorities have regularly cited ever-changing central government advice as a root cause in the delayed delivery of their own local plans.  Will we see this White Paper inadvertently causing further delay?

The opportunity for council planning departments to increase fees and generate hugely needed new revenue should be welcomed by all.  Overstretched planning departments desperately need more resources and hopefully this will help to deliver that.  Measures to provide improved security of tenure for private renters and any encouragement for local authorities to build more homes that are genuinely affordable are also to be applauded.

However, the concern remains that the measures proposed in the White Paper aren’t quite radical enough to really address the enormity of the challenge we face.  The rumours persist that truly radical reforms were removed from early drafts because they were seen as too controversial, and too hard to sell to the Conservative heartland.  Before Brexit, housing was seen as potentially the biggest electoral battleground for the next general election and government might have had the appetite to make genuinely bold and radical changes.  Now, with the negotiations to leave Europe likely to dominate proceedings for the foreseeable future, and the NHS re-emerging as a key political conflict, housing appears to have been pushed back out of the spotlight.  Perhaps the government decided this is a battle it doesn’t need to fight right now, hence the White Paper’s less than revolutionary content.