Fixing our broken housing market - Housing White Paper published

• measures to reduce the obstacles to house building and help local authorities, developers and SME builders build the homes Britain needs
• sensible measures to improve affordability and protections for renters and home purchasers
• Sajid Javid sets out “ambitious proposals to help fix the housing market so that more ordinary working people from across the country can have the security of a decent place to live”

The government has today (7 February 2017) introduced bold new plans to fix the broken housing market and build more homes across England.

Communities Secretary Sajid Javid says the current system isn’t working and is one of the greatest barriers to progress in Britain today.

The reforms in a white paper published today sets out new measures to ensure the housing market works for everyone, including people on lower incomes, renters, disabled and older people by:

Getting the right homes built in the right places

Consulting on the principle of a new, standardised way of calculating housing demand to reflect current and future housing pressures. Every local area will need to produce a realistic plan and review it at least every 5 years.

Currently 40% 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 to be built in the parts of the country where people want to live and work and ensure developments take heed of local people’s wishes, while continuing with maximum protections for the green belt.

Councils and developers will also be expected to use land more efficiently by avoiding building homes at low density and building higher where there is a shortage of land and in locations well served by public transport such as train stations.

Speeding up house building

Giving local authorities the tools to speed up house building as well as powers to make sure developers build homes on time. The government will make it easier for councils to issue completion notices, shortening the timescales to require developers to start building within 2 years, not 3, when planning permission is granted.

We will also require greater transparency and information from developers on their pace of delivery of new housing so councils can consider this when planning their local need. This will help address the serious and growing gap between the number of planning permissions granted and the number of new homes completed.

Diversifying the market

Action to help small independent builders enter the market given including through the £3 billion Home Building Fund. Currently around 60% of new homes are built by just 10 companies.

The fund will help us to build more than 25,000 new homes this Parliament and up to 225,000 in the longer term by providing loans for SME builders, custom builders, offsite construction and essential infrastructure, creating thousands of new jobs in the process.

Sajid Javid is highlighting research that shows it is difficult to get on the housing ladder, with the average house now costing 8 times more than average earnings – an all-time record.

The proportion of people living in the expensive private rented sector has doubled since 2000 and that more than 2.2 million working households with below-average incomes spend a third or more of their disposable income on housing.

This means they have less money to spend on other things every month, including putting aside money for a deposit.

Communities Secretary Sajid Javid said:

Walk down your local high street today and there’s one sight you’re almost certain to see. Young people, faces pressed against the estate agent’s window, trying and failing to find a home they can afford. With prices continuing to sky rocket, if we don’t act now, a whole generation could be left behind. We need to do better, and that means tackling the failures at every point in the system.

The housing market in this country is broken and the solution means building many more houses in the places that people want to live.

We are setting out ambitious proposals to help fix the housing market so that more ordinary working people from across the country can have the security of a decent place to live. The only way to halt the decline in affordability and help more people onto the housing ladder is to build more homes. Let’s get Britain building.

Housing Minister, Gavin Barwell said:

We are setting out lasting reforms that will get more of the right homes built in the right places, right now.

We owe it to our children and our grandchildren to fix the broken housing market problems and help them find a home of their own.

Further measures in the housing white paper ‘Fixing our broken housing market’ include:

Homeowners

We have already helped more than 360,000 people buy through government-backed homeownership schemes since 2010; helping people save for a deposit, buy with a smaller deposit, buy at 20% below the market price, buy the home they are renting from a social landlord, buy a share of a home or save a deposit while paying a below market rent.

Now in April 2017, the government will introduce the Lifetime ISA. This will support younger adults to save flexibly for the long term, giving them a 25% bonus on up to £4,000 of savings a year. Savings and the bonus can be put towards the purchase of a first home, or withdrawn once they reach the age of 60.

Starter homes will be targeted at first time buyers who would otherwise be priced out of the market. We intend to make clear through the National Planning Policy Framework that starter homes like shared ownership homes, should be available to households that need them most, with an income of less than £80,000 (£90,000 for London). The result of these changes means we will change our focus from starter homes to a wider range of affordable housing.

The wider range of government programmes will help over 200,000 people become homeowners by the end of the Parliament.

Affordable Rent and Rent to Buy

The government is committed to building more affordable homes to boost house-building and support households who are locked out of the market.

At Autumn Statement we announced an extra £1.4 billion for our Affordable Homes Programme, taking total investment in this programme to over £7 billion to build around 225,000 affordable homes in this Parliament.

This investment will help families to find a decent home that is right for them. The 2016 to 2021 Affordable Homes Programme was originally designed to focus on delivering shared ownership. Now we have opened up the programme, relaxing restrictions on funding so providers can build a range of homes including for affordable rent.

This includes Rent to Buy homes alongside shared ownership, which will enable thousands of households to access home ownership through a product that fits their circumstances. Rent to Buy will help hard-working households to benefit from a discounted rent set flexibly at levels to make it locally affordable so they can save for a deposit to purchase their home.

Renters

The government will put measures to tackle the high cost of renting at the heart of its plan to fix the broken housing market.

This includes amending planning rules so councils can proactively plan for more long-term Build to Rent homes and a consultation has been launched to allow developers to offer more affordable rent alongside other forms of affordable housing. Also ensuring more longer-term tenancies are available in private rented schemes to provide more stability to families renting.

We are working closely with the British Property Federation and National Housing Federation to ensure that these longer-tenancies become widely available

Green belt

Ministers have reaffirmed this government’s commitment to the green belt – that only in exceptional circumstances may councils alter green belt boundaries after consulting local people and submitting the revised Local Plan for examination, and set out for the first time all the actions local authorities must take before considering the green belt.

The plan for ‘Urban Regeneration’ includes: strengthening national planning policy to create a ‘de facto’ presumption in favour of housing on suitable brownfield land and to drive up density levels in high demand areas while ensuring that developments are well-designed and respect the character of the local area.

Also taking action to radically increase brownfield development and to bring life back to abandoned sites. That means high quality housing for families in town centres, breathing new life back into our high streets, turning abandoned shopping centres into new communities and increasing density of housing around transport hubs to build homes that people want to live in.

Empty homes

We will also continue to support local authorities to encourage efficient use of our existing stock, making best use of homes that are long-term empty.

Local authorities have powers and incentives to tackle empty homes. Through the New Homes Bonus they earn the same financial reward for bringing an empty home back into use as building a new one. They also have flexibility to impose a Council Tax premium of up to 50% (on top of the Council Tax bill), on properties that have been empty and substantially unfurnished for more than 2 years.

Great progress has been made in recent years and the number of empty homes stands at its lowest since records began. At May 2010 over 300,000 homes in England had been standing empty for longer than 6 months. As of October 2015 the number of long-term empty properties had fallen to 203,596.

Leasehold

The government will act to promote fairness and transparency for the growing number of leaseholders.

Some buyers are not aware that buying a leasehold house can be more expensive than a freehold house in the long run. Some ground rents can increase significantly over the lease period and be traded with leaseholders left in the dark. We will therefore consult on a range of measures to tackle all unfair and unreasonable abuses of leasehold.

Further support to help households who are currently priced out of the housing market to save for a deposit, and to buy or rent a home of their own. We will introduce a new Lifetime ISA in 2017, extend the Right to Buy discounts to housing association tenants, and invest in new homes for Shared Ownership, Affordable Rent and Rent to Buy.