Housing White Paper: how the government will solve the housing crisis

The Housing White Paper was published today, with a focus on supporting SME housebuilders and giving councils greater flexibility to get Britain building

Today the government has published its highly anticipated white paper. The document outlines how to fix the broken housing market and build more new homes across England, solving the ever growing housing crisis.

There is little doubt the Housing White Paper has been a long time coming. In fact, its arrival comes some months after it was expected in November’s Autumn Statement.

Housing shortages have been a thorn in the side of the government. It remains a key topic of discussion, and one that the public are genuinely concerned about. Communities Secretary Sajid Javid admitted the system isn’t working as it is and said failure to own property remains one of the greatest barriers to social progress.

So what measures are included in the document and will it do enough to fix the broken housing market?

New measures

The Housing White Paper sets out a number of key areas that will be a focus for the government. This includes:

• Getting the right homes built in the right places
• Speeding up housebuilding
• Diversifying the market

Javid said local areas will need to produce realistic plans of housing demand in their local community and revisit it at least every five years. Currently, 40 per cent of local planning authorities are without an up to date plan.

Land will also be expected to be used more efficiently to avoid building homes at low density. In areas where land is scarce there will be a focus on building higher.

Javid also outlined measures to give local authorities the ability to speed up the process of building homes. Councils will be able to issue completion notices with greater ease, and the timescales for developers to start building will be shortened from three to two years.

Developers will also have a responsibility to deliver correct information on the timescale expected for projects to complete. This will help councils when considering their local need.

Councillor Martin Tett, Housing spokesman at the Local Government Association, said the white paper showed the government was listening to local authorities.

“Communities must have faith that the planning system responds to their aspirations for their local area, rather than simply being driven by national targets.

“To achieve this, councils must have powers to ensure that new homes are affordable and meet their assessments of local need, are attractive and well-designed, and are supported by the schools, hospitals, roads and other services vital for places to succeed.”

Independent builders

Small independent builders will be given a helping hand to enter the market through the £3bn Home Building Fund. This, the government said, will see more than 25,000 new homes built this parliament and up to 225,000 in the long term.

The Federation of Master Builders (FMB) said the ability for councils to increase planning fees by 20 per cent should also increase housebuilding capabilities by SMEs.

Chief Executive Brian Berry said: “Both house builders and local authorities agree that the Government will not be able to build one million homes by 2020 unless council planning departments are properly funded.

“That’s why SME house builders will give a cautious welcome to the announcement in today’s Housing White Paper that central Government will allow councils to increase planning fees by 20 per cent if they commit to investing the extra funds in planning alone and not in other areas.

“This is something that the FMB has been calling for and in our view, is one of the biggest game changers to come from today’s 100 page Housing White Paper.

“If this can be shown to deliver real improvements in planning, then it would make a good case for further increases along the lines the White Paper suggests.”

SMEs certainly have a major role to play in the delivery of new homes. Giving more support to smaller housebuilders will help deliver more homes more quickly.

Berry added: “Delivering more homes on small sites doesn’t just provide opportunities for SME builders but on average delivers homes more quickly than on large sites.

“This White Paper will result in ambitious new housing targets for councils which they will have to deliver against – these targets will not be met through an over-reliance on large developers and large sites.

“If local authorities fail to meet their targets they could lose control over their own planning policy and the threat of this should provide the impetus for councils to push more small sites through the system.

“It is in everyone’s interest to see SMEs play a far greater role in house building and small sites are key to this.”

Housing costs through the roof

The average house now costs eight times more than average earnings, said Javid. Furthermore, the number of people living in expensive private rented properties has doubled since 2000, with more than 2.2 million working households with below-average incomes spending a third or more on housing costs. This is preventing people from saving for a deposit.

Javid said: “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.”

To help with deposit saving the government is introducing a lifetime ISA. This will give a 25 per cent bonus on up to £4,000 of savings a year. This can be used towards the purchase of a first home and provides greater flexibility to save in the long term.

Starter Homes

First time buyers will be eligible to buy starter homes as a way of getting a foot on the ladder. Starter homes, like shared ownership, will be made available to households that need them the most.

The government said there will be a shift from starter homes to a wider range of affordable properties.

It is hoped this will help over 200,000 people become homeowners by the end of the parliament.

Renting

In the Autumn Statement the government announced an extra £1.4bn for the Affordable Homes Programme. This took total investment to over £7bn, enabling the construction of some 225,000 affordable homes during this programme.

While the programme originally focused on shared ownership properties the government has opened it up to enable a range of homes available for affordable rent. This will include Rent to Buy, which gives households the opportunity to save for a deposit to purchase their home.

The high cost of renting will also be a focus, with a push for long term tenancies to be available through private rented schemes.

Green belt

Commitments to protect green belt land were reaffirmed by the government, with the assurance construction will only take place under exceptional circumstances.

National planning policy will be strengthened in favour of housing on brownfield land, with the aim of creating more homes and bringing abandoned sites back to life.

Empty homes

The government will also utilised existing housing stock, with a focus on long term empty properties. Local authorities have financial incentives in place through the New Homes Bonus to bring an empty home back into use, as well as implementing council tax premiums on empty properties.

Leasehold

With leasehold properties making the news recently the government outlined plans to ensure transparency for leaseholders. This includes making buyers aware that leaseholds can cost more in the long term than freehold, particularly if ground rents increase. A consultation will take place to address the issue and put together a range of measures to prevent abuse in this area.