Latest housing strategy by the government – review by the NAEA

GOVERNMENT HOUSING STRATEGY NOV 2011 The Government published a rather weighty housing strategy review last week. One of the points in it is a Mortgage Interest Guarantee for First Time Buyers purchasing a brand new property. This is something that the National Association Of Estate Agents have mentioned to the Government on quite a few occasions and will help First Time Buyers to obtain a 95% loan. In addition they have announced an independent review into the lack of investment in the Private Rental Sector. Finally it is good to see that they accept there is a need to work with the industry to drive up standards in the lettings industry.

A précis can be found below together with a link to the full document.

Regards
Peter Bolton King

The Government has published its housing strategy, which can be found in full at http://www.communities.gov.uk/documents/housing/pdf/2033676.pdf

‘Laying the Foundations: A Housing Strategy for England’ aims to:

1. Get the housing market moving again
2. Lay the foundations for a more responsive, effective and stable housing market in the future
3. Support choice and quality for tenants
4. Improve environmental standards and design quality

The document claims that the Government will not achieve their aspirations for a thriving and stable housing market “by attempting to control the market from Whitehall. The system of setting top-down targets for housing, vast amounts of planning guidance and excessive regulation did not deliver the homes we need nor the places that people want to live in. This Government is doing things differently – freeing up local areas to provide the homes needed for their communities and enabling the market to work more efficiently and responsively”.

The current Government, it is claimed, inherited the following problems:

• Buyers can’t buy – with the average age of an unassisted first time buyer continuing to rise and families struggling to ‘trade up’
• Lenders are not lending enough – with high deposit requirements excluding young people and families from home ownership
• Builders are not building – without consumers ready to buy and without enough land for development or access to finance
• Investors are not investing – without the right framework or incentives in place
• Affordable housing can do more – to deliver new homes and support the social mobility and aspirations of tenants and communities
• Tenants are struggling – as pressures increase in the private rented sector

The Government sets out its proposed solutions as follows:

1. Immediate action to get the housing market moving:

• Supporting a new and innovative new build indemnity scheme led by the Home Builders Federation and Council of Mortgage Lenders to provide up to 95 per cent loan to value mortgages for new build properties in England, backed by a housebuilder indemnity fund
• Consulting on a proposal to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled
• The establishment of a new £500 million Growing Places Fund which will support infrastructure that unblocks housing and economic growth
• Launching a new £400 million ‘Get Britain Building’ investment fund, which will support building firms in need of development finance, including small and medium-sized builders. This will help to unlock progress on stalled sites which have planning permission and are otherwise shovel ready
• Freeing up public sector land with capacity to deliver up to 100,000 new homes – with Build Now, Pay Later deals on the table, where there is market demand and where this is affordable and represents value for money, to support builders who are struggling to get finance upfront
• Supporting and encouraging more individuals to build their own homes through a Custom Homes programme, including making available up to £30 million of new funding to support provision of short-term project finance on a repayable basis

2. Longer term measures to promote a “more responsive, effective and stable housing market in the future”:

• Provision of more support for local areas that want to deliver larger scale new development to meet the needs of their growing communities – through locally planned large scale development – with a programme of support for places with the ambition to support new housing development on various scales
• Strong new incentives for housing growth through the New Homes Bonus, Community Infrastructure Levy and proposals for local business rates retention
• Consultation on simplifying planning policy through the draft National Planning Policy Framework (NPPF)
• Giving communities new powers to deliver the development they want through Community Right to Build

3. Supporting choice and quality for tenants:

• Supporting growth and investment in the private rented housing market. There will be an independent review of the barriers to investment in private homes to rent. The Government are also supporting new Build to Let models of development, where homes are built specifically for the private rental market, with funding from investors with a medium to long term interest. There will be pilot projects to develop this approach.
• Giving more freedom to local authorities which have retained their housing stock. Local authorities will have direct financial and strategic responsibility for the 1.7 million council homes
• Introduction of a radical programme of reform of social housing through the Localism Act 2011, changing the way in which people access social housing, the types of tenancies which are provided and the way that the homelessness duty is discharged
• Doing more to tackle fraud and tenancy abuse – the Government propose to give social landlords the tools to identify and recover properties that are being used unlawfully; to charge more reasonable market orientated rents from people earning very high salaries; and to prevent people who already own a suitable home from seeking social housing as well
• Consideration of how more affordable housing can be encouraged – supporting greater innovation and competition between social landlords – including encouraging new private entrants into the social housing market, and considering innovative new approaches to funding affordable housing in the medium term
• Reinvigorating the Right to Buy by raising the discounts to make it attractive to tenants across England. The Government is matching this with a commitment that, for every additional home bought under Right to Buy, a new affordable home will be built

4. Tackling empty homes:

• £100 million of funding to bring empty homes back into use as affordable housing; £50 million of further funding to tackle some of the worst concentrations of empty homes; consultation on changes to Council Tax to help tackle empty homes and bring them back into productive use

5. Better quality homes, places and housing support:

• Providing appropriate support, protections and opportunities to struggling households and to making the best use of social housing: prioritised protection for the vulnerable in last year’s Spending Review; establishment of a Ministerial Working Group to tackle the complex causes of homelessness; a new deal for older people’s housing, with a better offer to support older people to live independently for longer
• A commitment to improving the design and sustainability of housing in ways which give communities a say over the design of new homes and neighbourhoods; funding the Design Council to support communities in shaping development in their area; improving the energy efficiency of both new and existing homes; ensuring protection of the green belt and protected areas
• A commitment to delivering the Zero Carbon Homes standard for all new homes from 2016, which will mean that all the carbon emissions covered by Building Regulations – such as from heating, lighting, hot water and other fixed building services – will need to be abated

Specifically on the private rented sector, the Government states (see Chapter 4) that it is:

• Supporting investment in homes to rent by introducing changes to Stamp Duty Land Tax and legislating on changes to Real Estate Investment Trusts in the 2012 Finance Bill
• Marketing new Build to Rent pilot sites through the Homes and Communities Agency (HCA)
• Putting in place an independent review of barriers to investment in private homes for rent
• Working with industry to drive up standards and improve consumer awareness
• Encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes

Of particular note, Chapter 4 states that: “industry also has a key role to play in driving up standards and improving consumer awareness