At the Conservative Party Conference in Birmingham today, the Communities Secretary Sajid Javid, and the Chancellor, Philip Hammond, announced a package of new measures to build more houses, more quickly, in the places people want to live.
As part of the Government’s action to tackle the housing deficit and ensure everyone has a secure place to live, the Communities Secretary and the Chancellor made it clear that they are determined to take action and get more homes built.
A Government White Paper will be published later this year. At a Home Builders Federation conference fringe event this afternoon, Housing Minister, Gavin Barwell confirmed that this will effectively act as a strategy for rest of the parliament. Once published, he stated that his role will then turn to one of implementation. The minister also said that this will focus on a range of tenures, including specialist housing for older people.
The announcement was in three parts:
1. The launch of a £3 billion Home Builders Fund
The Home Builders Fund will provide £1 billion of short term loan funding. This will be used for small builders, custom builders, and innovators, delivering 25,500 homes by 2020. This is an increase of £325m over the previous commitment through the £525m Builders Finance fund and the £150m Build to Rent fund (both of which will now be incorporated within the new combined fund)
The fund will also provide £2 billion of long term funding for infrastructure. This will be used to unlocking a pipe line of up to 200,000 homes over the longer term – with the emphasis on developments on brownfield land (see below). As is often the case with government announcements of “new” funds, £1.2bn of this £2bn had been previously announced as the Large Sites Infrastructure Fund in 2015.
2. Accelerated Construction
The Accelerated Construction project will be paid for through £2 billion of new public sector net borrowing but is expected to deliver value uplift for the Government in the long term.
Government intends to use this money to step in to address “failures in the market”. They have stated that “traditional housebuilders take too long to build houses – so Government will take direct action, using surplus public land to build faster, including by encouraging new developers with different models into housebuilding, and to support SMEs”.
Sites within the Government’s portfolio which can be built on by 2020 will be identified, and the Government will work with local authorities to help them bring forward their own sites. Government will deliver outline planning permission and undertake the costs of some remediation work to reduce development risks on their sites, and offer support to local authorities to do the same on theirs.
This commitment builds on the public sector land release programme utilising direct commissioning, originally announced by David Cameron in January 2016.
Government will diversify the market by partnering with new entrants, SMEs, custom builders, specialist PRS schemes and offsite manufacturers that, they believe, can build out sites at up to twice the rate a traditional developer might. By using public land better, for example as equity, rather than expecting an upfront receipt, Government intends to lower developer risk and overcome issues with access to finance.
3. Urban Regeneration
The announcement focusses heavily on proposed changes to the planning system that have been previously consulted on or are contained within the Housing and Planning Act 2016. While there is a focus on bringing forward brownfield sites for redevelopment there is no return to a “brownfield first” strategy, either explicit or implied.
The announcement to “strengthen national planning policy to create a “de facto” presumption in favour of housing on suitable brownfield land and to drive up density levels in high demand areas while ensuring that developments are well-designed and respect the character of the local area” is not yet clearly explained in any further detail. However, the fact that the government believes that this could deliver an additional 25,000 new homes by 2021 suggests that it is not as extensive as a blanket presumption in favour of brownfield land within built up areas for which the HBF has been lobbying.
The proposal to allow local planning authorities to grant permission in principle on sites suitable for housing-led development identified in the new Brownfield Registers is a clear sign that the government are committed to the implementation of various parts of the Housing and Planning Act 2016 relating to both initiatives and reflects HBF representations that sites on Brownfield Registers should have Permission in Principle. This, the government claims, will make development of up to 140,000 homes per annum on brownfield land less risky for developers.
The government has also announced that it will build on recent permitted development rights allowing conversion of offices to residential development, by extending the right to allow for demolition of the offices and replacement with housing on a like-for-like basis.
This move was announced by the previous Planning Minister, Brandon Lewis when making the permitted development right permanent in October 2015. However, details of how this will work in practice have not yet been announced and whilst HBF is positive about the move we have offered to work with advisers and officials to determine the rules for what will be considered within the definition of “like-for-like”.
Home Builders Federation
London, SE1 9PL
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