Housing policy has probably never been higher up the political agenda. Property commentators agree the most significant challenge currently facing the property market is the shortage of good quality – especially affordable – homes for sale and to rent.

The Government’s own figures acknowledge that completions need to double just to keep pace with annual household formation rates of 245,000 and by even more to clear the estimated 1million shortfall.

The new Bill aims to redress the balance by transforming Generation Rent into Generation Buy as part of the Government’s home ownership “crusade.”

Key points include:

One million new homes by 2020 – this ambitious target includes 200,000 starter homes to be sold to first time buyers under 40 at a 20 per cent discount to market value. Local authorities will be able to bid for a share of a £10 million Starter Homes Fund and replace planning obligations for builders to provide affordable housing (mainly to rent) on all ‘reasonably-sized’ new developments; Automatic planning consent – offered in principle for starter homes developments on brownfield land and publicly-owned sites in particular;

• Registers – local authorities required to keep a register of development opportunities on brownfield and sites in public ownership;
• SME builders-local authorities to support small builders and specifically allocate land for up to 20,000 self-built homes by 2020;
• Local plan intervention – ministerial power to directly intervene if Councils don’t have local plans in place by 2017;
• Neighbourhood, CPO, planning etc –requirement by local authorities to speed up and simplify neighbourhood planning, reform compulsory purchase orders, extend use of planning performance targets – especially relating to smaller planning applications;
• Sale of high-value council-owned homes – local authority duty to sell their most expensive vacant homes for re-development; and

Office-to-residential –permitted development (PD) rights introduced on temporary basis in 2013 (due to lapse on 30 May 2016) have now been made permanent. Provisions go further than before as now easier to demolish offices to make way for new homes and deadline for developers of current PD schemes extended by three years, which should improve viability.

Politicians are out of date if they fail to recognise that people now aspire to home ownership less – and later – than their parents.

Note: those places presently exempt from office-to-residential permitted development rights will have until May 2019 to make an ‘Article 4’ direction if they wish to continue determining planning applications for change of use. There are currently 17 local authorities in England with individual buildings, roads or zones such as the City of London, parts of Westminster, Camden, Islington, Stevenage, Ashford, East Hampshire and Manchester City Centre, etc. which are exempt from these rights.

Additional permitted development rights will enable a change of use of light industrial buildings and launderettes to new homes, subject to prior approval by the local authority.

Routing the rogues

Marginalising rogue landlords and letting agents – local authority powers to establish a database of rogue operators and prevent those convicted of letting offences such as banning orders from renting out property. Hopefully, these measures will not compromise the vast majority of landlords letting desperately needed rental stock.

The Residential Landlords Association believes that the new Bill could render landlord licensing schemes obsolete and actually reduce rents. Councils will in future be able to use council tax registration to collect relevant information levying extra charges on PRS landlords which may have otherwise been passed on to tenants as higher rents. Local authorities can also use council tax registration to ask tenants for details of a property’s tenure and  their landlord which should help identify criminal operators. Information from statutory deposit schemes should at the same time contribute to better enforcement of PRS regulations. Compliance is certainly a problem with little incentive for local authorities to maintain decent standards through the courts as prosecutions continue to prove costly and time consuming. More than a quarter of Councils in England have not prosecuted a single landlord in the past five years for providing unsafe accommodation, following a recent investigation by The Times.

WILL IT WORK?

In my view, more must be done to raise the supply of not just homes for sale, but also to rent which is more likely to suit modern lifestyles and working arrangements of younger people in particular seeking flexible accommodation. Politicians are out of date if they fail to recognise people now aspire to home ownership less and later than their parents.

Over 25% of local councils in England have not prosecuted a single landlord in the past five years for providing unsafe accommodation.

I believe the Government are making a mistake by apparently treating rented housing as second class. Many first time buyers won’t be able to afford a new home even if offered at a 20 per cent discount in some areas. For example, the Investment Property Forum considers that a hypothetical 1,000 home scheme in London could be delivered roughly 2.5 times faster if including 70 per cent PRS homes as opposed to 100 per cent for sale.

Another of the principal obstacles to progress is planning. Local authorities are apparently struggling to cope with the number of applications being submitted, according to a recent British Property Federation survey. The average time to determine major planning applications is now 32 weeks in London and other big cities despite the government’s 13 week target. And that is to say nothing of continuing problems with raising finance!

I’m not convinced the industry even has the capacity to virtually double existing production within the next five years. For instance, will the loss of local authority revenue for section 106 payments reduce infrastructure provision and will we have a suitable workforce as well as sufficient materials at an appropriate price? Building more homes won’t necessarily mean we end up with the right homes in the right places, solve the housing crisis or improve transactions which remain at similar levels to the mid-1990s.