Head of Research Nicola Almond considers tomorrow’s housing White Paper
Housing Minister Gavin Barwell is expected to announce several measures to speed up house building in tomorrow’s housing White Paper, which it is hoped will help the government meet its own objective of building 1 million new homes by 2020. This aim, announced in 2015, is already looking challenging, with the 167,920 completions in 2015/16 way short of the 250,000 annual target. Not surprisingly, the government is focusing instead on the figure for net additions to housing stock, which reached 190,000 in 2015/16.
The long awaited White Paper is expected to provide a package of measures to encourage the institutional investors into the Build to Rent (BtR) sector, including amending planning rules so more homes can be built specifically for rent. The government says it is not giving up on its dream of a property-owning democracy, but that it needs to provide for people who want to rent as well as those who want to buy. BtR homes can offer longer tenancies, which are especially important to young families.
Measures are also expected to encourage smaller developers back into the market to reduce what the government regards as the sector’s reliance on a small number of large developers.
Freeing up more land for development is expected to be a key objective. Currently only 3% of land on England is built on, with an estimated additional 0.5% of brownfield land potentially available. Compare to this the 13% designated as green belt, and it’s easy to understand the demands for new rules for building on this land. Communities Secretary Sajid Javid has previously said that councils should not stand in the way of development provided all other options have been considered.
Land banking is also expected to be targeted, with the suggestions that developers may see planning permission withdrawn if they sit on parcels of land without building homes. The land around railway stations has been identified as a target for homes, and moves are expected to relocate station car parks underground to free up development land. Height restrictions on tall buildings are also expected to be relaxed, with the suggestion that home owners and developers may be allowed to build to the height of the ‘tallest building on the block’ without needing to seek planning permission.
Further measures are expected to include incentives for older people to downsize to smaller properties, thus releasing a supply of larger homes. This may include more housing for over 55s but is not expected to include the previously mooted idea of exempting older people from stamp duty to incentivise them to vacate under-used homes.
With 220,000 homes needed per year just to keep up with projected population growth, the government needs to find an answer to the question of how to increase house building. With the structural imbalance between supply and demand continuing to fuel price growth and challenge affordability for many, a range of effective measures is long overdue.