Tuesday, February 07, 2017

Helping people to find a home

The government has set out a strategy to make more affordable houses available, helping people to buy and rent.
The new housing strategy for England includes giving councils powers to encourage developers to start building on land they own and are using as a "land back."

Ministers also promised to make renting more "family-friendly," including offers of longer tenancies

The government says at least 250,000 new homes are needed each year to keep up with demand.
Mr Javid set out the details of the housing White Paper in a statement to MPs, with measures including:
  • Forcing councils to produce an up-to-date plan for housing demand
  • Expecting developers to avoid "low-density" housing where land availability is short
  • Encouraging the extension of buildings upwards in urban areas
  • Reducing the time allowed between planning permission and the start of building from three to two years
  • Using a £3bn fund to help smaller building firms challenge major developers, including support for off-site construction, where parts of buildings are assembled in a factory
  • A "lifetime ISA" to help first-time buyers save for a deposit
  • Maintaining protection for the green belt, which can only be built on "in exceptional circumstances"
  • Introducing banning orders "to remove the worst landlords or agents from operating"
  • Banning letting agents' fees
Starter homes, championed by former Prime Minister David Cameron, will be aimed at "households that need them most", those with combined incomes of less than £80,000, or £90,000 in London.

Starter homes are new homes built for first-time buyers between 23 and 40 years old and sold at least 20% below market value. The maximum price after the discount has been applied is £250,000 outside London and £450,000 in the capital.

Under the new proposals, starter home buyers will need a mortgage, "to stop cash buyers", and some or all of the discount will have to be repaid if the property is resold within 15 years, "to reduce the risk of speculation".

A proposal that 20% of all larger developments had to be starter homes is to be dropped and replaced with a "clear expectation" that at least 10% of developments will be "affordable home ownership units".

Many councils already include similar requirements in their district plan or LDF - we had a requirement for developments above a certain size to include a proportion of affordable homes in the St Albans plan while I was planning portfolio holder in that authority - but you have to word the requirement carefully or it can produce perverse incentives.

For example, if you are not very careful you can incentivise developers to provide the market element of housing proposals in the form of large executive houses and the affordable element in the form of one and two bedroom flats. Which is fine if that is what your area needs, but can be a problem if it results in an underprovision of homes in the middle range - for instance, if an area has a shortage of, say, three bedroom houses to buy or rent you need to ensure that your planning policies do not skew housebuilding in favour of larger and smaller units while neglecting mid-size homes.

You also have to make sure that such requirements are sufficiently carefully drafted, and consultation procedures followed carefully enough, that you are proof against legal challenges. Developers are rather prone to make such challenges to council planning policies if they are not fireproof.

We need to provide more homes or a generation of young people will be condemned to suffer housing need. I welcome the steps the government is taking.


Jim said...

Hmmm, I see the flaw in the plan here. You see people dont tend to need any help to find it, its just the buying it part that is a problem for most.

- as always happy to help with these things

Chris Whiteside said...

Well, the reason for that is that there are more people wanting homes chasing too few homes, so the price has been bid up to crazy levels.

As some of the reason for that is things that the state does - operate a planning policy which restricts ability to build houses for instance - it is really rather important to address this.