Tag Archives: Shelter

Can they fix it? Reactions to the white paper on housing

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By James Carson

After a delay of several months, the government’s housing white paper was finally published last week.  Its title – “Fixing our broken housing market” – makes clear that England’s housing market requires radical reform. The communities secretary, Sajid Javid underlined this when presenting the paper to MPs:

“We have to build more, of the right homes in the right places, and we have to start right now.”

The key proposals

The white paper contains 29 policy proposals. These include:

  • developers will be forced to use-or-lose planning permission within two years
  • local authorities will be required to keep an up-to-date local plan to meet housing demand
  • an expanded and more flexible affordable homes programme, for housing associations and local authorities
  • developers will be encouraged to avoid “low-density” housing where land availability is short
  • the time allowed between planning permission and the start of building will be reduced from three to two years
  • incentives for build to let
  • the Green Belt will continue to be protected, and may only be built on “in exceptional circumstances”

In addition, the paper proposes the establishment of a £3bn fund to help smaller building firms challenge major developers, and a “lifetime ISA” to help first-time buyers save for a deposit. The white paper also confirmed government plans to ban letting agency fees for tenants.

The paper proposes placing a cap of £80,000 (£90,000 in London) on starter homes (new-build homes for first-time buyers between 23 and 40 years old and sold at least 20% below market value). And it signals that 10% of all new homes should be starter homes (the current requirement is 20%).

Reaction to the proposals: the politicians

The communities secretary described the white paper’s proposals as “bold” and “radical”, but some responses have suggested that the new strategy will fail to meet the challenge of England’s housing crisis.

Describing the plans as “feeble beyond belief”, Labour’s shadow housing minister, John Healey observed: “This white paper is not a plan to fix the housing crisis. And it will do nothing to reverse seven years of failure on housing we’ve seen since 2010. There are 200,000 fewer home-owners, homelessness has doubled, and affordable house-building has slumped to a 24-year low.”

The Green Party’s co-leader Jonathan Bartley said the policies were a “slap in the face for the millions of people in this country desperate for bold plans to reduce rents and make their housing affordable”.

On build to rent, Tom Copley, Labour’s London Assembly housing spokesperson welcomed the shift in focus from home ownership, but was concerned about the scope of the proposals:  “…whilst the promise of longer tenancies is welcome, its bearing will be miniscule unless it is extended to existing rental properties, where the vast majority of renters actually live.”

Reaction: architects, housing bodies and builders

Simon Henley, of architects Halebrown, welcomed the paper’s proposals to help smaller building firms challenge major developers – “More and smaller housebuilders will bring variety and inspiration.”  But he added that “reasonably priced land is vital to the equation for great homes.”

Alex Ely of the Mae architecture practice was disappointed with the continuing restrictions on building on the Green Belt, observing that “We know that just a 1km ring of Green Belt from inside the M25 would yield enough land for a generation of building at current rates.”

Terrie Alafat, chief executive of the Chartered Institute of Housing said the package of measures demonstrates a commitment to tackle the housing crisis. “However our concern is that much housing remains out of reach for a significant number of people and we would like to see the government back up the package of measures with additional funding and resource in the budget.”

Stewart Baseley, executive chairman of the Home Builders Federation welcomed plans to bring forward more developable land: “If we are to build more homes, we need more land coming through the system more quickly.”

Reaction: homeowners and renters

Dan Wilson Craw, director of Generation Rent argued that the white paper failed to offer renters anything of substance. “Renters on stagnant wages need homes that cost no more than a third of their income, not ones let at 80% of the market rent, with a sticker that says ‘affordable’.”

Meanwhile, Paula Higgins, chief executive of HomeOwners Alliance, called for more action and fewer words. “It’s difficult to see how these measures will enable the government to meet its target of one million new homes by 2020.”

Reaction: the LGA and Shelter

Speaking for the Local Government Association (LGA), housing spokesman Councillor Martin Tett noted that the white paper contains signs that the government is listening to councils on how to boost housing supply and increase affordability. But he called for more support to enable local authorities to tackle the housing shortage: “…councils desperately need the powers and access to funding to resume their historic role as a major builder of affordable homes. This means being able to borrow to invest in housing and to keep 100 per cent of the receipts from properties sold through Right to Buy to replace homes and reinvest in building more of the genuine affordable homes our communities desperately need.”

Writing on the organisation’s blog, Shelter’s Steve Akehurst described the white paper as a step, rather than a leap in the right direction:

“Overall, the shift in emphasis – towards tackling big developers and dysfunctions in the land market, towards making renting more stable, and delivering more affordable homes – is really welcome, and there are some good first steps to making them a reality. In reality more will be needed to deliver upon these lofty ambitions in full… But today is a good start.”

The next steps

The government is consulting on the planning proposals set out in the first two chapters of the white paper, with a closing date of 2 May 2017. After considering the responses, the government will decide on how to take its strategy forward.

As the paper concludes, millions of people who can’t afford to buy or rent already know that the housing market is broken. Fixing it will be a job not only for the government, but for local authorities, developers, housing associations and local communities.

Time will tell whether the proposals set out in the white paper are radical enough to help the homeowners and tenants of tomorrow.

You may also find these blog posts on housing of interest:

Ensuring that growth and great places aren’t incompatible … reflections on the RTPI Convention

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The 2016 RTPI Convention earlier this week was attended by over 400 people keen to discuss how the profession and the planning system can support the delivery of growth. Being held just a few days after the UK’s Brexit vote, there was a predictable inevitability when every speaker prefaced their talk with the caveat ‘of course everything is uncertain now’. A consistent message across the day however was that regardless of the political uncertainty, the key challenges of demographic change, enhanced mobility and a national housing shortage still need to be addressed. And planning is central to producing long-term, strategic responses to these issues.

While Idox were at the conference exhibition in order to highlight the success of the i-Apply combined online planning and building control submissions service, our Knowledge Exchange team were at the convention itself.

Planning great places

Although there was plenty of discussion during the day about the ongoing impact of planning reform – especially the current review of the planning system in Scotland, the Housing and Planning Act 2016 and the role of the National Infrastructure Commission – the most inspiring sessions focused on practical examples of collaboration and inclusion in strategic planning.

Paul Barnard, Assistant Director for Strategic Planning & Infrastructure at Plymouth City Council described the key ingredients of aspirational plan making. The council has twice won the RTPI’s Silver Jubilee Cup for their pioneering approach, firstly in 2006 and then again last year for their Plan for Homes. This city-wide planning framework addresses issues including land release, infrastructure and delivery. Incredibly, the overarching Plymouth Plan replaced over 138 different strategies.

Paul explained that the challenge for the team was to develop credible policy responses to the social challenges facing the area, and then win over hearts and minds to support these solutions. The benefits of having one integrated strategy is that it sets a vision for ‘place’ that all departments can mobilise behind. Paul argued that the profession has to “believe in proactive, positive planning” and make the case for that every day in their work.

Delivering housing growth

Throughout the conference, the need to deliver more housing was a recurrent theme. A number of speakers argued that direct intervention in the housing market, for example through local housing companies or councils buying sites, was becoming a necessity. Toby Lloyd, Head of Policy at Shelter, pointed out that central government interventions have been focused on the consumer end of the market (for example, Starter Homes) rather than on delivering development sites and land.

Discussions during the day highlighted the current disconnect between where new housing is being delivered and where there are employment growth opportunities. Yolande Barnes, Head of Savills World Research, also suggested that we need to stop planning in terms of ‘housing units’ – people live in neighbourhoods and communities, and we shouldn’t forget this.

The question of how we capture land value, and use this to fund infrastructure development, was also raised repeatedly. In many situations, we have fragmented development delivered by different developers and the question of responsibility for wider public benefits is difficult. Planning tools such as the Community Infrastructure Levy and Section 106 have attempted to address this, but do not necessarily provide a timely or joined up approach to infrastructure delivery.

What if cities could change our world?

While recognising the challenges facing the profession, there was a strong emphasis during the day on the transformational potential of planning.

Alfonso Vegara, of Fundación Metropóli, describing the rejuvenation of Bilbao, suggested that successful planning needs to recognise the new scale of cities and economic development. The interconnections mean that growth corridors or city regions are only going to become more important. Successful economic growth will be dependent on retaining and attracting talent and skills in polycentric areas, and strategic planning needs to take this into account. The successful regeneration of Bilbao “was not a miracle, but the result of vision and leadership.”

This theme was also reflected in Ed Cox’s session on the RTPI’s work with IPPR on the need for an integrated, spatial approach to growing the economy in the North of England. Producing a vision for prosperity will depend on addressing key structural challenges. Maximising opportunities within an interconnected metropolitan region needs to recognise the importance of both cities and their hinterlands. It was also argued that the ‘Northern Powerhouse’ ambition will fail if citizens aren’t helped to feel engaged economically, politically and socially.

A rallying cry for leadership

There has been a trend in recent years for the planning system to be portrayed as a barrier and a bureaucratic obstacle which is getting in the way of growth. One speaker quoted Joseph Konvitz saying “planning has been discredited in the public mind and starved by the public purse”. There was a strong sense during the conference of ‘enough is enough’. The consistent message was that planning and planners are not the problem, and are doing the best they can in a difficult context.

As a profession, planners are trained to take a holistic view. They operate at the junction between politics, finance and community. And they are perfectly placed to provide leadership, foresight and clarity. The skills to deliver great places, which people want to live in, are needed now, more than ever. And there is a need to “rekindle the idea of planning as a key democratic process”.

The challenge at the end of the Convention was “do it with passion, or not at all”. Planning is not a ‘numbers game’ – we need to consider quality of place and ambition, not just the drive for housing completions.

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Starter Homes: affordable housing at an unaffordable cost?

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By James Carson

A report from homelessness charity Shelter has suggested that one of the UK government’s key affordable homes initiatives will be out of reach for many people on average incomes.

The ‘Starter Homes’ initiative was launched in December 2014, offering first time buyers under the age of 40 in England a discount of up to 20% off the normal price of new homes built on brownfield land. During the general election campaign, David Cameron promised that by 2020 200,000 Starter Homes would be built by private builders and sold for no more than £450,000 in London and £250,000 in the rest of England.

The government has claimed that first-time buyers paying an average of £218,000 for a home would save £43,000 under the Starter Homes scheme.

However, analysis of the programme by Shelter suggests that it will not help the majority of people on the new National Living Wage or average wages into home-ownership in England by 2020.

Cheaper homes but not cheap enough

Shelter looked at three typical household formations in each local authority in England earning a range of different salaries to assess whether they were likely to be able to afford to buy a Starter Home. The study found that:

  • Starter Homes for families earning average wages will be unaffordable in over half of local authorities across England in 2020.
  • Families on the National Living Wage will only be able to afford a Starter Home in 2% of local authorities.
  • Single people on low or average wages will struggle to afford a Starter Home in 2020 in the majority of local authorities.
  • London, the South East and the East have the lowest number of areas where affordable Starter Homes under the schemes threshold could be built, despite high demand in these areas.

The scheme is being funded by changes to the planning system, exempting developers from their obligations to include affordable housing in building schemes. The government says that these ‘Section 106’ obligations typically add £15,000 to the cost of each new home being built.

However, even before its latest analysis, Shelter was expressing concerns that the removal of these requirements would lead to Starter Homes ‘cannibalising’ genuinely affordable housing. There are also questions about whether the homes will come with the necessary infrastructure in place.

Government pressing ahead

Nevertheless, the government is pressing ahead with the programme and extending its scope. In August, chancellor George Osborne announced that the Starter Homes scheme would be extended to some villages as part of the government’s rural productivity plan. At the same time, some of England’s major house builders have pledged their support for the scheme, including Barratt, Cala and Taylor Wimpey.

Even if it meets the target of 200,000 new homes by 2020, the Starter Homes scheme on its own will not solve the national housing shortage. Around 250,000 homes need to be built each year to keep up with demand, but in 2014 fewer than 119,000 homes were built in England. As the Shelter report concludes, the Starter Homes programme is no silver bullet for the housing crisis:

“Starter Homes would primarily help those on very high salaries or couples without children, but they are not a good replacement for other forms of affordable housing and will not help the majority of people on average wages struggling to get an affordable, decent home. The government needs to look very closely at this policy before going down the wrong track.”

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The Idox Information Service can give you access to a wealth of further information on housing; to find out more on how to become a member, contact us.

Further reading*

The home front (interview with Brandon Lewis outlining plans for housing)

Building to order (development on brownfield sites)

A living countryside: responding to the challenges of providing affordable rural housing (CPRE Housing foresight paper no 5)

Housing summary measures analysis

Tackling our housing crisis: why building more houses will not solve the problem

*Some resources may only be available to members of the Idox Information Service