Prime Minister announces new measures to tackle housing crisis

Prime Minister Teresa May addressed the National Planning Conference yesterday, and introduced a range of measures to reform planning in the UK, and promised to make changes to make home ownership more affordable.

Mrs May said the cost of housing, both for ownership and rent, was reinforcing economic divisions and leading to growing social immobility, with public sector workers unable to take jobs in certain parts of the country.  She described current levels of homelessness as a ‘national shame’ and promised to halve the numbers of homeless people by 50% by 2022.

The Prime Minister used the speech to announce reforms, including:

  • 10% of homes on major sites should be available for affordable home ownership
  • Builders to be more open about affordable housing commitments at planning stage
  • Councils will have to adopt a new nationwide standard showing housing need in their areas
  • Infrastructure needs to be considered at pre-planning stage
  • Councils to consider revoking planning permission after two years if building has not started
  • Ancient Woodland and aged trees to get specific protection

A separate review will look at creating an automatic right for homeowners to extend upwards and to make it easier to develop agricultural land for housing.

Significantly, the Prime MInister promised to tackle the practice of ‘land banking’, saying:

“The gap between permissions granted and homes built is still too large.  I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.  I expect developers to do their duty to Britain and build the homes our country needs.”

“The bonuses paid to the heads of some of our biggest developers are based not on the number of homes they build but on their profits or share price. In a market where lower supply equals higher prices that creates a perverse incentive, one that does not encourage them to build the homes we need.  Oliver Letwin is currently reviewing the causes of the planning permission gap. If he finds evidence of unjustifiable delay, I will not rule out any options for ending such practices.”

 

Mark Hayward, Chief Executive, NAEA Propertymark said that the reforms would deliver slow change but warned that first time buyers still face a tough year ahead:

“Clearly we need more houses and we welcome these announcements from the Government; however given the nature of housebuilding we need to recognise that it will inevitably be a slow process before people feel that they have more homes available to them. Our monthly housing market report showed demand for housing boomed in January, creating competition among buyers and causing the number of sales to first time buyers (FTBs) to drop. It looks like those trying to get their first foot on the property ladder are in for tough year.”

 

Anthony Aitken, Head of Planning at Colliers International said the speech was ‘all talk and no action’ and a ‘missed opportunity’:

“It seems rather ironic that housebuilders were criticised in the NPPF announcement for not building enough homes and were asked to ‘do their duty’ to achieve this aim. This does not strike me as the means to motivate the housebuilders to address this crisis – it seems to be more a case of direct criticism without understanding the wider factors. The consultative NPPF could have suggested that the green belt, as a land use, needs to be reviewed nationally, as its founding reasons in 1947, need to be reassessed to meet societies modern needs, namely ‘housing our population’.

“The government has clearly failed to ‘do its duty’ in providing clear guidance on how 300,000 houses per annum are to be delivered in England, with green belt policy unaltered, no new resource for the public sector to advance local plans or determine applications, encouragement of neighbourhood plans which seek to thwart residential development and no penalties for local authorities who fail to plan. Each provide barriers to quick development for housebuilders to progress sites and build more homes.”

 

May also promised to improve the way tenants are treated, with more rights, more availability and better regulation of rogue landlords.  The Prime Minister said:

“Private landlords play an important role in the housing market. Talk to tenants, however, and you’ll repeatedly hear complaints that people are paying more and more for less and less. So this government is taking action to clean up the rental market and bring down the cost of renting.

“Too many tenants have got used to being hit with rip-off fees by letting agents, facing huge upfront bills to check references or sign contracts. That’s simply not fair, so we’re banning letting agents from charging most tenants any fees at all.

 

Alex Eid, CEO and Founder of Homie, welcomed the Prime Minister’s comments, saying:

“As an industry, we need to work together to ensure that people are ending up in homes they want to be in, not ones they have been forced to choose as a result of a crowded market.  Time-short professionals are often left with a property that is of lower quality than what they wanted, and frequently more expensive, simply because it is available. Combine this with the cost of travelling to viewings and deposits, renters are already spending upwards of £2,000 per move. It is time for a shift in the market in favour of the renter, and as an industry we need to cut down the inefficiencies and lack of transparency.”

 

Dominic Martin, Business Development Director, of build-to-rent developer Atlas Residential, said local authorities needed to have more awareness of the build to rent model:

We need more homes and both Local Authorities and developers / housebuilders have their part to play.   From a Build to Rent perspective, one of the biggest barriers, as cited in an industry forum only last month, is a lack of awareness by Local Authorities in many secondary and tertiary UK towns and cities about what this new product really is and how it can benefit their local renting community.

 Therefore, an education of officers (both planning and housing) but also members, especially those on planning committees is critical and  requires a fresh drive from both those within the sector and wider government.”

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