MARKET COMMENTARY

The Housing and Planning Bill was recently announced by the government as another way to “kick-start” the UK housing market.

The Housing and Planning Bill has taken the Starter Home Initiative (announced in February of this year) and embellished it further with new plans to turn “generation rent into generation buy”. The government intends to do this through:

>>New affordable starter homes – a legal obligation will be placed on councils to guarantee the provision of 200,000 Starter Homes on all reasonably sized new development sites; these will be offered to first-time buyers at a 20% discount on market prices.

>>Local Plans – providing the government with targeted powers to ensure that all councils put Local Plans into place by 2017, ensuring that homes are provided for their communities.

>>Pay-to-Stay – making sure that tenants on higher incomes who are living in social housing pay a rent that reflects their ability to pay, while still supporting those who cannot pay higher rents.

>>Automatic planning permission in principle on brownfield sites – to bring forward more brownfield land to build new homes quicker.

>>Planning reforms to support small builders – councils will be obligated to help allocate land so 20,000 custom and self-build homes a year can be built by 2020.

>>Measures to tackle rogue landlords – councils will have the power to blacklist and ban landlords who don’t abide by the law, while helping decent landlords recover abandoned homes quicker.

>>Ensuring high value assets are managed effectively – guaranteeing that the sale of high value council assets will be used to support home ownership initiatives.

The government has come under considerable criticism, with critics saying that the initiatives don’t do enough to address the lack of housing stock in the UK and the elephant in the room – affordable housing. Opponents support a new plan of council house building, which has been declining for more than a decade.

Research from a well-known housing charity reports that, in order to afford one of the new starter homes, you will need to earn £77,000 per annum making the starter home initiative far from accessible to the demographic it is aimed at.