Associate solicitor Manisha Bhula, in Blandy & Blandy LLP’s leading residential property team, takes a closer look at the government’s new White Paper titled “Fixing our broken housing market”.
“Our housing market is broken,” was the message from communities secretary Sajid Javid, as the government unveiled a White Paper on the state of the sector. Javid pointed the finger at low rates of house building, and said: “We have to build more, of the right homes in the right places, and we have to start right now.”
He suggested that the number of new homes being built needs to rise from 2016’s figure of 190,000 to between 225,000 and 275,000 a year. During the financial crisis the level dropped as low as 95,000 new homes.
The White Paper, titled “Fixing our broken housing market”, confirms that average UK house prices dropped in January, for the first time in five months. It also warns that development density in urban areas will likely need to increase, while property sizes may shrink. New-build homes and apartments in England are already among the smallest in Europe.
All local councils will be required to publish projected figures for new home building and to provide an “honest assessment” of local housing demand, while new measures to speed up development once planning permission has been granted may be introduced.
Government figures highlight an increasing gap between the number of new homes planning permission is granted for and the number actually delivered. This gap has risen from 25,000 to just short of 10,000 homes in the past decade. The White Paper reads: “There is concern that it may be in the interest of speculators and developers to snap up land for housing and then sit back for a while as prices continue to rise.”
The paper outlines plans to strengthen local authorities’ planning functions and to provide departments with additional powers. Developers will have two years to build once planning permission is granted, whereas permission currently lapses after three years.
Developing on brownfield sites is a key component of the government’s plans, with land suitable for a total of 160,000 new homes to be released during this parliament. Local authorities are to be encouraged to follow suit. Older homeowners will also be incentivised to downsize, making room for younger families.
Javid added: “This paper will not entail recklessly ripping up our countryside,” confirming that restrictions on building on greenbelt land will not be changed.
Large housebuilders all saw their share price rise following the news, while a promise of assistance and new steps to help smaller developers to grow was made.
The White Paper also reiterated that the government’s proposed ban on letting agency fees for tenants, first announced in November 2016, will get the go ahead, but no timescales have yet been given. The ban would means tenants no longer being required to pay fees, potentially totalling several hundred pounds, when signing a new tenancy agreement.
In summary, key points are:
As a firm Blandy & Blandy is home to specialist expertise in advising landowners and developers, and on all commercial and residential property matters. The firm is actively involved in a number of key developments and strategic projects across the Thames Valley.
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