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Briefings

Member Briefing: Government publishes White Paper aimed at ‘fixing the broken housing market’

Date: 07/02/17

Government publishes White Paper aimed at ‘fixing the broken housing market’

The Government has published its long-awaited Housing White Paper, Fixing Our Broken Housing Market, following a House of Commons statement by the Communities Secretary, Sajid Javid. 

The White Paper, which represents a new ‘comprehensive approach to tackling failures at every point of the system’, focuses on four pillars: (i) Planning for the right homes in the right places, (ii) Building homes faster, (iii) diversifying the market, and (iv) helping people now. A significant number of the proposals will require consultation or be part of the review of the NPPF to take place later this year. 

Many of the key proposals will require further study of forthcoming detail and consultation before determining the effectiveness of the overall package. 

The strategy includes a number of priorities and suggestions put forward by HBF over the last year, including a robust housing delivery test, a presumption in favour of brownfield development, allocation of more small sites for SMEs and local policies to promote the housing needs of older people 

The 105 page document, published alongside several supporting documents, is available here and includes broad questions to which Government invites responses from stakeholders. 

1. Planning for the right homes in the right places 

 

Getting plans in place

Government has reiterated its commitment to ensure that every part of the country has an up-to-date, ‘sufficiently ambitious’ plan. New regulations will be set out to require reviews of local plans at least once every five years, and sooner if the authority’s housing target can no longer be justified. This will work in conjunction with the new Housing Delivery Test. 

A consultation will be published on changes to the NPPF to require authorities to prepare a Statement of Common Ground, explaining how they will work together across boundaries. 

Making enough land available in the right places 

Local authorities will be asked to demonstrate that they have a clear strategy in place to maximise the use of suitable land with identified housing need being accommodated elsewhere if appropriate sites cannot be found. As part of these changes Government proposes clarifying which national policies it regards as providing a strong reason to restrict development at the time of preparing plans. 

Assessing housing requirements 

The Government will consult on options for introducing a standardised approach to assessing housing need. This is intended to be in place by April 2018 and be the universal approach for calculating objectively assessed housing need. 

Local authorities will also be expected to have clear policies in place to address the housing needs of older people and others with specialist needs. 

Making plans easier to produce 

Each authority will be required to be covered by a plan but this need not necessarily be at the local authority level, allowing for more strategic planning across multiple local authority boundaries. Spatial development strategies in areas covered by combined authorities or elected mayors will be given the power to allocate sites for development. National policy will set out the key strategic priorities that every area is to plan for. 

Making land ownership and interests more transparent 

The Land Registry’s plans to achieve a comprehensive land registration by 2030 will include an ambition to improve the availability of information about options and other interests in land which may not currently be recorded by the Land Registry. A consultation will be published to determine how this may be achieved. 

Bringing brownfield land back into use 

The Government will go further than current plans to promote a presumption that ‘brownfield land is suitable for housing unless there are clear and specific reasons to the contrary (such as high flood risk).’ 

Supporting small and medium sized sites, and thriving rural communities

The NPPF will be amended to make clear that at least 10% of the sites allocated for residential development in local plans should sites of half a hectare or less, another key recommendation from HBF’s recent Reversing the Decline of Small House Builders report. 

Policy will be amended to expect authorities to have policies in place that support the development of small windfall sites, and indicate that additional weight should be given to using small undeveloped sites within settlement boundaries where these are suitable for housing. 

An expectation will be placed on authorities to work with developers to encourage the sub-division of large sites. 

The Delivery Test, proposed by HBF for some time, including in the recent HBF report, should also provide for additional allocations of smaller sites in areas where assessed housing need is not being met. 

Using land more efficiently 

Amendments to the NPPF will be made to increase densities in areas where there is a shortage of land for meeting identified need. In particular, locations that are well-served by public transport should be considered for housing, replacing or building over low density uses such as car parks and warehouses. Greater flexibility around the Nationally Described Space Standard is hinted at to ensure that high density delivery is possible ‘while avoiding a race to the bottom in the sizes of homes on offer’. 

Green Belt 

Following recent media speculation, ministers have re-committed to the Conservative Policy manifesto at the 2015 regarding green belt protections. The Government will amend policy to state that green belt boundaries should only be amended when planning authorities can demonstrate that they have fully examined other options for meeting their housing need, including whether or not densities have been optimised. 

Strengthening neighbourhood planning and design 

Neighbourhood planning groups will be given the right to obtain a housing requirement figure from the local planning authority to help avoid delays in putting a plan in place, and further funding will be provided for groups from 2018 to 2020. The paper highlights the ‘value of using a widely accepted design standard, such as Building for Life’ 

To improve the approach to design, the NPPF will be amended to expect local and neighbourhood plans to establish design expectations. This is also intended to be achieved by strengthening the importance of pre-application discussions. Design should only be used to object to development where it does not meet design expectations in statutory plans. This will be made clear in the revised NPPF. 

More homes on public sector land 

A more flexible approach to local authority land disposals is mooted in the White Paper, with a consultation due on allowing councils to dispose of land at less than best consideration. 

Government is also interested in views as to what powers are needed for local authorities to play a more active role in land assembly, including the prevention of ‘ransom strips’. In this regard, the case study of Bonn and land pooling is highlighted. 

Building good quality homes 

Following last year’s All Party Parliamentary Group for Excellence in the Build Environment’s inquiry, the Government will keep requirements under review to ensure standards are maintained while looking for further opportunities for rationalisation and red tape reduction. On energy performance, the Government has stated that it will consult on standards and requirements on new homes this Parliament if evidence suggests that this is possible without affecting affordability. More detail will be included in the Government’s forthcoming Emissions Reduction Plan.

2. Building homes faster 

 

The Government is to take forward the recommendation of the Local Plans Expert Group (LPEG) around annual monitoring reports, by giving local authorities the opportunity to have their housing land supply agreed on an annual basis and for a fixed one-year period. Authorities that wish to take advantage of this policy will need to provide a 10% buffer on their five-year land supply. 

Housing Delivery Test 

A new test for delivery (measured as net annual housing additions) will be introduced to hold accountable the various interests involved in planning for and building homes. Delivery would be assessed as the average over a three year rolling period with the first assessment period being 2014/15. These will be published annually alongside net housing supply statistics 

 This will take effect later this year:  

  • From November 2017, if a delivery of housing falls below 95% of the authority’s annual housing requirement, LPAs will be instructed to produce an action plan setting out the reasons for failing to meet housing need and what action will be taken to address the shortfall
  • Also from November 2017, if delivery of housing falls below 85% of the requirement, authorities will be expected to plan for a 20% buffer on their five-year land supply
  • From November 2018, if delivery of housing falls below 25% of the housing requirement, the presumption in favour of sustainable development would apply automatically
  • From November  2019, if delivery falls below 45% the presumption will apply
  • From November 2020, if delivery falls below 65% the presumption will apply  

A robust delivery test has been proposed for some time by HBF as a means of engendering a greater sense of realism in allocations and addressing shortfalls as and when they arise, particularly through the allocation of more small sites. 

Sharpening local authority tools to speed up building 

Government proposes an amendment to national policy to encourage authorities to consider how realistic it is that a site will be developed when deciding on the merits of a planning permission. This is intended to discourage applications where failure to implement on previous permissions suggests that intention to develop is not in existence. The White Paper therefore invites views on whether it is possible to take into account an applicant’s track record of delivery when determining planning applications. 

The timescales for developers to implement a permission will be reduced from three years to two years, except where a shorter timescale could hinder viability or deliverability. This will be subject to consultation. Alongside this, the Government proposes, through legislation, a simplification of the completion notice process in instances where development on a site has stopped and there is no prospect of completion. Local authorities already have powers to withdraw permission but such notices are seldom used in this way. Ministers are keen to tackle instances of developers making a token start to building. 

For stalled sites, Government will prepare new guidance for local authorities to encourage the use of compulsory purchase orders. 

Greater transparency through build out phases 

More information will be required on the timing and pace of new housing delivery while DCLG will increase the quality of data it collects on delivery against local plan requirements to empower communities to challenge developers on their performance. This will be introduced on a consistent basis across local authority areas. 

Additionally, a consultation will be brought forward on a proposal to require large house builders to publish aggregate information on their build out rates. 

Keeping the delivery of land with planning permission under review 

The White Paper states that the practical measures to speed up planning and delivery should lead to house builders no longer requiring such a significant ‘stock’ of land. It goes on ‘we will monitor the situation closely, and will not hesitate to take further action if required. 

Building out more quickly 

Building on the efforts in the Neighbourhood Planning Bill to tackle the delays caused by planning conditions, the Government has invited further suggestions for how to address the widespread use of planning conditions to slow down starting on site. 

Strategic approach to habitats 

The system piloted in Woking for a new strategic approach to licensing of protected species will be rolled out across the country. This approach replaces site by site licencing with a new system of plan level licensing allowing developers to buy into strategic mitigation via the local authority rather than individual site surveys and on-site mitigation. 

Boosting local authority capacity 

From July 2017 local authorities will be given the power to increase planning fees by 20% provided they commit to investing the additional income in their planning department. Government will also consult on allowing a further 20% increase for those authorities deemed to be delivering on their housing requirements. Further detail will be required as to the additionality involved given that the wording in the White Paper references a ringfence only for the 20% premium, and the risk that this merely displaces other planning resources which could be redirected elsewhere. 

£25m of new funding is pledged for ambitious authorities in areas of high housing need to plan for new homes and infrastructure. 

Deterring unnecessary appeals 

A consultation will be brought forward on the introduction of a fee for making a planning appeal. Government is keen to hear from developers and others as to how this can be done without deterring SMEs from making legitimate appeals. The option mentioned in the paper is for capped fees with refunds due where appeals are successful. 

Ensuring infrastructure is provided in the right place at the right time 

National policy will be amended so that local planning authorities are expected to identify development opportunities that are created by strategic infrastructure, i.e. High Speed 2. 

Simplifying developer contributions 

Government has confirmed that it will respond to the independent review of CIL, published alongside the White Paper, at the time of the Autumn Budget 2017. 

Utilities and digital infrastructure 

Government will review what more can be done to ensure that utilities investment and delivery keeps pace with house building. Subsequent performance of utilities providers will be monitored ‘to ensure house building is not being delayed’. If necessary Government reserves the right to impose a duty on utility companies to take account of proposed development. 

Consultation will be used to determine how digital infrastructure can be incorporated into local planning policies. Government will also consider how to capitalise on new development to enhance 5G broadband, potentially through mobile infrastructure on new housing schemes. 

3. Diversifying the market 

 

Boosting productivity 

Government will support a joint working group with lenders, valuers and builders to ensure mortgages are readily available on more innovatively produced new homes while exploring the barriers in the planning system preventing more widespread use of modern methods of construction. 

The Accelerated Construction programme announced last autumn will be used to stimulate and promote investment in modern methods of construction. 

SMEs 

The main support for SMEs comes in the form of the land and planning announcements outlined above. Plans announced last year for local authorities to maintain a ‘small sites register have been withdrawn following consultation. 

Institutional investment 

Changes to the NPPF will be brought forward so that authorities plan proactively for Build to Rent where there is a need, and make it easier for Build to Rent developers to offer affordable private rental homes. 

Housing associations 

Housing associations are to be ‘urged to explore every avenue for building more homes’ while improving their efficiency, particularly those that currently undertake little or no building. 

Local authorities 

Government would like to explore bespoke housing deals with authorities in high demand areas which have a genuine ambition to build their own homes. 

Homes and Communities Agency 

Following the recent review of the HCA, the agency will this summer be relaunched as Homes England with the purpose of ‘making a home within reach for everyone’. 

4. Helping people now 

 

Starter Homes 

Following last year’s consultation on the parameters for the Starter Homes initiative, the Government has confirmed the terms they will consolidate in regulations and through changes to the NPPF later this year. This means: 

  • Resales within the first 15 years will require some level of repayment of the initial discount
  • Qualifying households must have an income of less than £80,000 (£90,000 in London)
  • Rather than an explicit Starter Homes requirement on all reasonably sized sites (originally expected to be 20% of the site), the NPPF will be amended to introduce a broader expectation that housing sites deliver a minimum of 10% affordable home ownership.  

This is expected to be a key component in the target to ‘help over 200,000 people become homeowners by the end of this parliament’ by changing the focus away from purely Starter Homes ‘to a wider range of affordable housing’, including shared ownership, Right to Buy and Help to Buy. 

Help to Buy 

Echoing HBF’s recent calls for advanced signals and early planning for the currently planned for conclusion of the Help to Buy Equity Loan scheme in 2021, the White Paper confirms that the Government will ‘work with the sector to consider the future of the scheme’. HBF has already begun such discussions with ministers and lenders with a view to preventing a sudden ‘cliff-edge’. 

A fairer deal for renters and leaseholders 

Action is promised to promote fairness and transparency for the growing number of leaseholders, particularly where consumers interests are being ignored. Ground rents with short review periods and the potential to increase significantly are highlighted as causes of concern with the White Paper stating categorically ‘we are absolutely determined to address this’. A consultation will come forward with a range of measures to tackle all unfair and unreasonable abuses of leasehold. HBF has recently been engaging officials, interest groups and members to ascertain the current practice. 

As announced previously, Government remains concerned over affordability and security for renters. A consultation will shortly be published on banning letting agent fees to tenants. 

Housing for our future population 

A new statutory duty in the Housing and Planning Bill will mandate local authorities to plan for the housing needs of older and disabled people. A further commitment to build an evidence base and explore sustainable solutions, particularly with regards to the addressing the disincentives to downsize for older people living in large family homes. 

A green paper will be published this spring on the funding for supported housing.

 

David O’Leary

Policy Director

david.oleary@hbf.co.uk