Housing: forward, cautiously

HOUSING WHITE PAPER: “Really, is that it?” That was the response to the housing white paper from shadow housing minister John Healey yesterday.

The Labour MP wasn’t alone in suggesting the policy document fell short of the “radical” policy shake-up promised by communities secretary Sajid Javid. Many of the initial reaction comments coming into EG’s inbox within minutes of the document’s release said it did not go “far enough” in trying to solve the housing crisis. Had those commentators actually read the 104-page document?

There was much in the paper that the industry had asked for. National policy recognition for build to rent; a relaxation of starter homes policy; greater funding for local authorities; and a simplification of local plans.

So what was missing? Changes to the community infrastructure levy (an announcement has been delayed until the autumn); measures to promote local authority housebuilding; a reversal of stamp duty surcharge for buy to let investors and a relaxation of green belt release rules were all measures the industry had hoped to see.

The most punitive measure for housebuilders is that they will have to start construction two years after obtaining planning consent, instead of three – unless they can prove viability issues. It could have been far worse.

The paper essentially delivers on what housing minister Gavin Barwell has promised – improvements to the planning system in return for greater expectations on developers. In the new order of things, there are sticks and carrots for both councils and developers.

“I think this is the government looking for a return on its investment in schemes such as Help to Buy, Starter Homes [although it looks like that role will be watered down] the accelerated construction fund and the homebuilders’ fund,” said Savills residential director Lucian Cook.

The key question, is, will this all add up to delivering the 250,000 homes a year the government says we need? “There’s still a need to think about some more radical options,” says Lord Bob Kerslake, president of the Local Government Association and former head of the civil service.

Long on research, graphs and consultation, the white paper was short on much detailed policy.

Plenty of questions still remain. Will higher density in town centres be enough to support new homes without building on the green belt? Is there enough infrastructure investment to support and encourage new developments? Will longer-term tenancies for build-to-rent schemes deter developers?

Consultation on proposed changes will run for 12 weeks, closing on 2 May. The government will then consider representations before drafting a bill to bring forward the new policies. The next opportunity for a policy boost for the market will come with the March Budget, where hopes are high for changes to business rates and stamp duty.

The one thing we can expect from Number 10 is caution.

“The No 10 agenda has taken back control from Treasury,” said Pinsent Masons planning expert Iain Gilbey. Under prime minister Theresa May, that means not rushing into policy decisions. It also means making an effort to speak to a wider audience than a Treasury document would usually target, with an accessible document title: “Fixing our broken housing market.” Is this government recognising housing as a complex industry that needs to be treated with caution? In an era of uncertainty, there is something to be said for playing it safe.

Sticks to be used on councils:

• local plans or other development documents to be reviewed every five years;

• a new housing delivery test to force local authorities to grant planning permissions if they fail to reach land release targets;

• a standardised approach to assessing housing requirements by April 2018.

Sticks to be used on developers:

• developer to provide more information about the timing and pace of delivery of new housing;

• large housebuilders to publish aggregate information on build-out rates;

• councils may be able to consider an applicant’s track record of delivering previous, similar housing schemes when determining planning applications for housing development;

• developer may have to implement a permission for housing development in two years instead of three, except where a shorter timescale could hinder the viability or deliverability of a scheme.