The Government’s Housing White Paper:
A Quick Fix to a Broken Housing Market?

On 7th February 2017, the government published a white paper looking into the state of the British housing market and setting out how Housing Minister Sajid Javid intends to encourage house building across the United Kingdom.

While the government had previously set itself a target of building one million affordable new homes by 2020, opposition politicians were quick to point out that the white paper made no mention of this ambition, falling far short of their expectations and those of housebuilders and tenants desperate to buy.

The Liberal Democrat’s Shadow Housing Minister John Shipley was scathing in his criticism of the document, describing it as ‘utterly vacuous’ and ‘not the ambitious, radical plan we need to solve the housing crisis’.  Labour’s John Healey, Shadow Secretary of State for Housing, was equally dismissive and branded the white paper ‘feeble beyond belief’.

The ‘Broken’ Housing Market

While some have criticised the emotive language used in the debate over housing, few disagree that there has been a crisis long-building in the property sector.  There are currently 35,000 people who have been on waiting lists for affordable homes for over a decade, and affordable house building has slumped to its lowest levels in almost quarter of a century.  There is also significant evidence that homelessness across the country has almost doubled since the financial crash of 2007, while more and more people say they are struggling to save for a deposit on their first home.

Among the proposals set out in this new white paper was an extension of the Conservatives’ controversial ‘Right to Buy’ scheme, with tens of thousands of previously exempt new-build properties being made eligible for sale.  The policy has been criticised in the past for benefitting only wealthy property owners, with almost 40% of properties sold under the system ending up in the hands of private landlords rather than promoting home ownership among those desperate for a first foot on the property ladder.

The Right to Buy scheme has also curbed local authorities’ willingness to build new homes, as many local councils fear being left to pick up the bill when they are forced to offer tenants a chance to buy new homes at discounted prices.  Property industry experts have warned that extending the Right to Buy policy could be counterproductive and lead to local authorities building fewer homes in the long-term, finding no incentive to do so if they cannot be privately sold to generate income.

Issues Raised by the Property White Paper

Among the issues raised by Sajid Javid’s new white paper are how local authorities identify sites suitable for building on and how reforms to planning legislation might affect property developers’ decisions about the types of property they can build.   There has long been heated debate about the extent to which developers should be allowed to encroach onto the greenbelt, while questions about how brownfield sites might be better utilised are also raised by the white paper.

For many years councils have used Sustainability Appraisals (SAs) and Strategic Environmental Agreements (SEAs) to assess the likely impact, both good and bad, which a planned development might have on the local environment, economy and community.  Although SAs have been criticised for being overly-complicated due to the high likelihood of legal challenges, some property and planning experts now believe that a ‘new generation’ of SAs could help tackle some of the issues raised in the new housing white paper.  Many hope that the white paper will encourage developers, planning departments and local communities to think more closely about what a ‘sustainable site’ is and speed up the process of bringing vacant or previously built-on land back into the housing market.

How the White Paper Might Help Self-Build Projects

With many people finding they are unable to save enough for a deposit or being priced out of the rental market in certain areas of the country, self-builds have become a much more attractive alternative in recent years.  The 2017 white paper contains a line in which the government states that they ‘do not believe local authorities are taking sufficient action to promote opportunities for custom building and self-building’ and ‘will consider taking further action including possible changes to legislation’.  The pledge that they will ‘make it easier for people who want to build their own homes’ bodes well for the thousands of people currently exploring the options around self-build.

While there are no definite recommendations made, the report’s authors do highlight where they believe the obstructions to self-building lie:

The main barriers to custom built homes are access to land and finance.  Mortgages for custom and self-built homes represent a very small proportion of the overall lending market.  We have already taken steps to improve access to land.  The new ‘Right to Build’ requires local planning authorities to find land for those seeking a custom built home in their area, and they must keep a register of those wanting to build their own home. And the Home Building Fund will help custom build firms.

The government has already announced a £45million Local Authority Land Release Fund for small-scale infrastructure and land remediation projects, and has said there will be greater investment in their Accelerated Construction programme, which aims to help smaller and medium sized developers gain better access to the finances they need for their home building projects.  Through the Accelerated Construction fund, the government has said it hopes 15,000 more homes will be built using more innovative and faster construction methods over the course of this parliament.

While the new housing white paper has been criticised for a lack of direct solutions to the UK’s housing shortfall, for those interested in self-building their own homes there are some promising suggestions of further changes to funding arrangements and the planning system.  If pledged government investment is made and more progressive legislation introduced, self-building may become easier and could contribute significantly to filling the housing shortage.

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