How the Government's Housing White Paper might affect you

News at Townends | 17/02/2017

The Government has finally unveiled its plans to fix the "broken housing market" in a white paper spanning 104 pages.

Among lengthy reiterations of existing housing policy schemes, including Help to Buy, were proposals to stop developers land banking, attempts to speed up planning approvals and support for the delivery of more homes to rent.

The main proposals can be surmised under the following 3 categories:

Cutting red tape on planning 

The Government wants to build the ‘right homes in the right places’. To achieve this, they’ve instructed local authorities in England (where they have jurisdiction to control housing policy – London, Scotland, Wales and Northern Ireland have their own) to come up with a plan by April 2018. These plans will focus on meeting local demand for housing and make sure that enough houses are built for the elderly and the disabled.

The Government is also proposing to cut the time local authorities have to approve planning applications from three years to two.

Encouraging smaller builders

Government analysis suggests that nearly 60% of all new homes are built by 10 big builders. They want to change this by encouraging smaller developers who they hope will use modern methods of construction to speed up how quickly homes are built.

The Government also wants ‘higher density’ building in the form of high rise flats, mansion blocks and lots more homes in areas around transport links. To do this, they’re offering local authorities up to a 20% increase on budget if they commit to spending it on planning departments.

No building on Green Belt Land

The Government affirmed its commitment not to build on green belt land and promised to discourage builders from land banking. The White Paper also confirmed it would release more publicly owned brownfield land for development.

Part of its plans to stop firms land banking – where land is bought, but not developed for years as house prices and land values rise – include the proposal that personal ownership details will be made publicly available on the Land Registry. This would name and shame those sitting on empty homes and undeveloped land. Housing targets that were abandoned under David Cameron will also be reinstated from next year with local authorities responsible for setting these.

So, what does the White Paper mean for you?

I want to downsize

Firstly, the Government acknowledged the ‘many barriers to people moving out of family homes that they may have lived in for decades’ by stating their commitment ‘to exploring these issues further and finding sustainable solutions to any problems that come to light’.

There was support for older home owners in the form of encouragement for builders to build homes appropriate for the elderly.  However, there was no mention about the potential that cutting stamp duty or providing other incentives for last-time movers could have on freeing up family homes.

I want to buy my first home

The White Paper did not issue much new information for first-time buyers. It simply reiterated what schemes are already in place such as; Help to Buy equity loans, Isas, shared ownership and Rent to Buy schemes.

‘The Government will help people save for a deposit, buy with a smaller deposit, buy at 20 per cent below the market price, buy the home they are renting from a social landlord, buy a share of a home or save a deposit while paying a below market rent. We will also target more investment into homes for Affordable Rent,’ said the white paper.

I’m a renter

According to the White Paper, more than 4 million households rent their homes from a private landlord. This figure is nearly twice as many as 10 years ago with standard of accommodation and affordability being the key issues.

The White Paper highlighted how an average couple renting ‘spend roughly half their salary’ each month on rent, making it ‘nigh on impossible’ for them to save for a deposit to buy their own property. It continued that building more homes will help with affordability, but renters often face upfront costs including fees charged by letting agents.

The Government has already announced in the Budget that it would ban letting agent fees to tenants, and the white paper has gone further saying it will look to bring forward that legislation.

I’m a landlord

Landlords have been on the Government’s radar for several years and there appears to be no let-up in the white paper. Already having to contend with tax relief reductions and stamp duty rises, landlords may soon have to add extra layers of red tape to their list of woes.

The Government is considering mandatory electrical checks for rented properties and client money protection for letting agents.

However, perhaps the most important aspect of the White Paper for landlords is the Government’s desire to make tenancies ‘more family-friendly’ by introducing longer-term tenancies.

I’m a leaseholder
The Government also announced in the White Paper that it will act to promote fairness and transparency for the growing number of leaseholders, claiming there are currently around four million leasehold homes in England.

It said: ‘Leasehold has been a traditional part of the housing market in this country but there are areas where urgent reform may be needed, particularly when buying a house on a leasehold basis. New leasehold houses can be marketed at a reduced price compared to freehold’.

‘But some purchasers are not aware at the point of sale that the associated costs of buying a new leasehold house can make it more expensive in the long run. Some freeholds and ground rents of leasehold houses are sold on and traded, with leaseholders left in the dark, and facing increasing and onerous payments. This is not in consumers’ best interests.’

It added: ‘In particular, ground rents with short review periods and the potential to increase significantly throughout the lease period may not be offering a fair deal. We are absolutely determined to address this.’

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