The Housing White Paper: More power and responsibility for local authorities

22 February 2017

The steep rise in the value of residential property has been partly driven by a chronic undersupply of new homes. The Housing White Paper, launched in February, seeks to tackle this housing shortage.

Its 106 pages offer no quick fix solutions, prompting criticism that it stops short of the ‘radical vision’ promised by Sajid Javid. What the White Paper lacks in terms of a headline-grabber, it seeks to make up for with a more pragmatic approach that tackles the housing crisis on multiple fronts.

Wide-ranging measures place greater responsibility on local authorities to adopt up-to-date plans that meet housing requirements, increase pressure on housebuilders to accelerate construction and provide support for a wider range of tenure.

The Housing White Paper is not a manifesto for revolution but a detailed blueprint for evolution. Here are some of the key proposals:

More power and responsibility for local authorities:

Driving greater economic productivity is one of the Government’s key aims. Providing enough homes in the right places is part of the solution and local authorities are to take more responsibility for making it happen.

Under the proposals, councils must provide up-to-date local plans based on an ‘honest assessment of the need for new homes’. There is also more support for collaboration across local authority boundaries.

Councils will be held to account through a new ‘housing delivery test’, which will highlight whether housebuilding is meeting housing requirements and from November 2018 automatically apply “the presumption in favour of sustainable development” if delivery falls below 25% of housing requirement (rising to 65% over time).

A separate consultation will look into ways local authorities can make more active use of compulsory purchase powers to promote development on stalled sites. Additional support will come from the Homes and Communities Agency (HCA), which will take a more proactive role on compulsory purchase.

In recognition that councils are under-resourced, there are plans to allow local authorities to increase planning fees by at least 20% and £25 million of new funding will be made available for “ambitious” authorities in areas of greatest need.

Planning support for development:

The planning policy framework in the White Paper is supportive of higher levels of development by aiming to simplify and speed up planning. Government will also be exploring a new approach to developers’ contribution to infrastructure, expecting more efficient land use through higher density and reviewing space standards.

The document stopped short of making radical changes to the Green Belt with a reiteration of the Conservative’s Manifesto commitment to protect it. But the Paper provided a clear process for local authorities to challenge the planning constraint, if they can demonstrate there is not enough land for development.

Higher expectations of developers:

Private developers are expected to speed up delivery, engage with communities and invest in their skills base. Timing and pace of delivery will be monitored against Plan targets and there are proposals to require larger housebuilders to publish data on build out rates.

There are proposals to reduce the time required for builders to start work once a permission is granted from three to two years. Where no progress has been made and there is no prospect of completion, there is a proposal to withdraw planning permission for the remainder of the site.

Innovation and modern methods of construction are being encouraged in a drive to support a wider range of developers. Government will encourage a greater diversity of builders, by partnering with SMEs and contractors in the £2bn Accelerated Construction programme and helping smaller companies access finance.

Housing associations are also expected to build a wider range of tenure through an expanded and more flexible Affordable Homes Programme worth £7.1 billion.

Smaller players will also be given a boost by moves to encourage planning authorities and bigger developers to sub-divide large sites.

Support for a wider range of tenure:

Gone is the previous government’s ambition to deliver 400,000 affordable homes for homeownership during this Parliament. Instead there is an expectation that 200,000 people will be helped onto the housing ladder by a range of schemes such as Help to Buy, shared ownership and starter homes. There is a recognition that we also need more homes for rent.

The previous target to deliver 200,000 starter homes has disappeared and rules have changed to restrict eligibility. First-time buyers will be required to have a mortgage and subject to the same £80,000 (£90,000 in London) household income cap as those accessing shared ownership schemes. Buyers will also have to repay some or all of the 20% discount if the home is sold within the first 15 years of ownership.

Developers will no longer have to deliver 20% of schemes as starter homes, which would have been detrimental to other forms of affordable housing. But there will be a policy expectation that housing sites will include a minimum 10% of homes for affordable homeownership.

Click here to see a map of Housing Targets vs Objectively Assessed Need (OAN) in England

Will it work?

The Paper’s greatest strength is its multi-pronged coherent approach. It will instigate faster construction by focusing planning consents on build out rates. It will add muscle to the National Planning Policy Framework with more stringent requirements for local plan based on real need.

It will target development around new strategic infrastructure and drive local authorities to look beyond municipal boundaries to deliver joined up thinking. None of this will happen overnight. It quietly takes us in the right direction, rather than delivering a shouting game changer.

 
 

General Enquiries

Savills Margaret Street

 

Key Contacts

Susan Emmett

Susan Emmett

Director
Residential Research

Savills Margaret Street

+44 (0) 203 107 5460

 

Sue Laming

Sue Laming

PR Director
Press Office

Savills Margaret Street

+44 (0) 20 7016 3802