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Housing white paper: 'Affordable' rentals set to give construction sector a boost

Housing white paper: 'Affordable' rentals set to give construction sector a boost

Feb 7, 2017 |Richard McPartland |3 Minute Read

The government's bid to fix the UK's 'broken' housing market switches focus this week as a new white paper is published including measures to deal with the high cost of renting and more relaxed planning rules.

Theresa May has announced a series of housing reforms this week with 'Generation Rent' at the heart of new plans to "fix the broken housing market".

With home ownership now out of reach for millions of families Mrs May has pledged that the number of 'affordable' rental homes will increase and renting will become fairer for tenants.

In a marked shift of focus (in recent years government policy has centered on turning 'Generation Rent' into 'Generation Buy') the government now hopes to encourage councils to build more rental homes and is proposing a change in planning rules to facilitate.

A consultation on how to encourage developers to build more affordable private rented properties faster, with higher density where possible, and within two years not the current three will also be launched.

A white paper, published on Tuesday 7 February, explores the proposals in more detail.

"We understand people are living longer in private rented accommodation which is why we are fixing this broken housing market so all types of home are more affordable," said Sajid Javid, the Communities Secretary.

The government now hopes to encourage councils to build more rental homes and is proposing a change in planning rules to facilitate.

At-a-glance guide to the proposals

Tenancies

  • The government aims to ensure more longer-term tenancies are available in private-rented scheme and will work with the British Property Federation and National Housing Federation to spur adoption.
  • The government has re-affirmed its commitment to build more 'affordable' rental homes.
    In addition to the £1.4bn fund announced in the Autumn Statement, the Affordable Homes Programme will also now include Affordable Rent. A consultation has also been promised on proposals to allow developers to offer more affordable rent alongside other forms of affordable housing.

Planning

  • Local areas will be expected to produce a realistic Local Plan, updated every five years, to improve the rate of housebuilding.
  • Councils will be expected to use land more 'efficiently' by building at higher density where there is land shortage and good transport links exist.
  • Councils will be given powers to help them build more homes - details to follow.
  • Options to make it easier for councils to issue Completion Notices will be explored (cutting timescales from planning permission granted to build required to within two years (currently three).
  • Planning rules will be amended to allow councils to plan for longer-term Build to Rent schemes.
  • Developers will be expected to provide greater transparency (particularly around pace) so this can be incorporated in council's local planning.

 Development

  • The £3bn Home Building Fund (announced at the Conservative Conference) aims to help more SME builders into the market. In addition loans will be provided to customer builders and to provide offsite construction and essential infrastructure.

Home ownership

  • The government aims to see 200,000 more home owners by the end of the parliament and hopes the new Lifetime ISA vehicle will give young tenants flexibility when saving for the long term.

Starter homes

  • Shared Ownership starer homes will only be available to households that need them most (with an income of sub £80k (sub 90k in London).
  • The Help to Buy mortgage guarantee scheme, which offered first-time buyers the opportunity to purchase a home with a Government-backed loan worth up to 95% of the value of the property has been scrapped.

Empty properties

  • The government aims to see "efficient use of existing stock" and local authorities have the powers to tackle these. The financial incentive through the New Homes Bonus scheme (which also applies to returning empty properties to use) will continue. There is flexibility for councils to impose council tax premium of up to 50% on properties that have lain empty and unfurnished for more than two years.

Leaseholders

  • There will be a consultation on a range of measures to “tackle all unfair and unreasonable abuses of leasehold" to ensure that purchases are aware of differences and to tackle significant increases in ground rents over time.

Green field sites

  • Building on green belt will continue to be permitted only in 'exceptional circumstances'.
  • Renewed commitment to protect ancient woodland sites.

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