Govt pledges to 'fix broken housing market' in white paper

The Government's new white paper aims to fix Britain's "broken housing market" with thousands of new homes, an extension of its affordable homes programme, and longer-term tenancies.

Related topics:  Finance News
Rozi Jones
7th February 2017
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"The Government says it will also change its focus from starter homes to a wider range of affordable housing, including Rent to Buy and shared ownership,"

The Government aims to help local authorities, developers and SME builders build more than 25,000 new homes by 2020 and up to 225,000 in the long-term. It estimates that currently around 60% of new homes are built by just 10 companies.

As part of the proposals, 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.

The paper places particular emphasis on people on lower incomes, renters, disabled and older people.

Starter homes will be targeted at first time buyers who would otherwise be priced out of the market and will now be available to households with an income of less than £80,000 (£90,000 for London).

The Government says it will also change its focus from starter homes to a wider range of affordable housing, including Rent to Buy and shared ownership, still pledging to help over 200,000 people become homeowners by the end of the Parliament.

Additionally, the white paper has opened up the 2016 to 2021 Affordable Homes Programme, relaxing restrictions on funding so providers can build a range of homes including for affordable rent.

The Government will put measures to tackle the high cost of renting, including amending planning rules so councils can proactively plan for more long-term Build to Rent homes, as well as allowing developers to offer more affordable rent alongside other forms of affordable housing.

As expected, more longer-term tenancies will also be made available in private rented schemes.

In a statement, the Government said it is "working closely with the British Property Federation and National Housing Federation to ensure that these longer-tenancies become widely available".

Ministers have also reaffirmed their 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.

The plan for ‘Urban Regeneration’ includes strengthening national planning policy to "radically increase brownfield development".

It has also reaffirmed its support for local authorities to encourage efficient use of existing stock, making best use of homes that are long-term empty. This includes financial incentives to bring an empty home back into use as well as the 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.

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."

Jayne-Anne Gadhia, Chief Executive at Virgin Money, commented: “We strongly support reforms to planning aimed at increasing housing construction in England. The government’s commitment to addressing the shortage and high cost of housing is essential to underpin the wider health of the economy, consumer confidence, productivity and social mobility. We are particularly keen to support the increased role of shared ownership, starter homes and custom build, which will not only contribute to supply, but also ensure that new homes meet people’s specific needs.”

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