The Government has released its much-anticipated Housing White Paper, vowing to fix Britain’s “broken” housing market and increase the delivery of new homes, and housebuilders and construction industry experts have had mixed reactions.
Communities Secretary Sajid Javid stated that with at least 250,000 new homes needed each year to keep up with demand, the White Paper proposes “bold” measures to reduce barriers to construction, allegedly improve affordability, and better protect renters and buyers.
According to the proposals, each local area will be required to develop a “realistic” plan for meeting housing demand, which will be reviewed every five years. Currently, 40 percent of local governments, according to Javid, do not have an up-to-date strategy to meet projected household growth. Fixing this will free up more land for development in areas of the country where people want to live while still protecting the greenbelt, he says.
Councils and developers will also be expected to avoid low density housing and instead build higher in areas with limited land or in areas well served by public transportation.
The white paper will make it easier for councils to issue completion notices, reducing the timeframe for developers to begin construction after planning permission is granted from three to two years.
Developers will be required to detail the rate of housing delivery in order to assist councils in planning for local need. According to Javid, this will help address the “serious and growing gap” between the number of planning permissions granted and the number of completed homes.
Another measure is a £3 billion fund to assist smaller builders in entering the market. Currently, only ten companies deliver approximately 60% of new homes.
In April, a Lifetime ISA will be introduced to assist young people in saving for a deposit, and discounted Starter Homes will be available to first-time buyers with household incomes of less than £80,000 (£90,000 in London).
The Federation of Master Builders (FMB) has reacted positively to the white paper’s proposals, believing that it contains a number of key measures that will increase opportunities for SME house builders.
“I’m pleased that the white paper recognises the potential for SMEs to deliver far more homes than they do now,” says Brian Berry, FMB CEO.
“It also accurately identifies the key barriers to them doing so, such as land, planning, and finance.”
“The most significant single barrier is locating small sites and then obtaining planning permission.” In far too many places, the approach to new home planning has become almost entirely focused on large sites and large-scale delivery. This approach has slowed home delivery and contributed to an uncompetitive housing industry and an unresponsive housing supply – this must change.
“There’s a proposal in the white paper to take forward a presumption in favour of small scale development of sorts, and this is a huge step forward,” Berry continued. The proposal to encourage permissions on so-called windfall sites, that is, sites not allocated in local plans, is also problematic.
“Smaller windfall sites must be viewed as critical components of the supply of land and new housing, rather than as awkward add-ons.” Furthermore, plans to increase resources for planning departments could be used to give a shot of adrenaline to a planning system that has been running on near-empty for far too long.
Berry believes that the white paper should be viewed as a springboard for a genuine step change in delivery.
“The proposed 20% increase in planning fees, which will only apply where local governments agree to invest the extra resources in planning, will be met with scepticism by most small developers,” he says.
“If this can be shown to deliver observable improvements in planning services, it will make a strong case for further increases along the lines suggested by the white paper.”
However, actions, according to Shraga Stern, director of London construction firm Decorean, speak louder than words.
“As a home builder, we naturally welcome the news that the government has set a goal of constructing one million homes by 2020.”
“However, we have seen promises and plans made in the past that never came to fruition, and we must ensure that this does not happen again.”
“For real change to occur, the government must enact changes to the planning system and regulations, which serve as a roadblock for many smaller developers.” The white paper is a welcome sight and a step forward in providing more housing for our ever-increasing population.”
According to Ian Anderson, partner at Cushman & Wakefield’s planning and development consultancy, “the white paper does little to add anything new to realistically speeding up the supply of housing.”
“There should be applause for the recognition of the important contribution of the rental sector to housing and the Government’s continued support for brownfield development,” he says, “but the paper offers nothing radical and, in some cases, seeks to impose or curtail current planning flexibility, which may actually result in delays in the submission of planning applications and, as a result, a longer lead time to development.”