The Housing White Paper: severe shortage of homes has led to broken property market

Developments on disused land, discounted starter homes and fairer rules for renters will target soaring property prices and the huge gap in housing supply faced by a growing population

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England's housing market is broken, admits the Government in its much-anticipated Housing White Paper, and the reason is simple: "For too long, we haven't built enough homes."

Since the Seventies, an average of 160,000 homes a year have been built in England, 115,000 less than is now needed to keep up with the country's growing population and catch up with years of under supply.

While the housing shortage is particularly acute in London, it is also getting worse up and down the country. 

Communities Secretary Sajid Javid said he was setting out “proposals to help fix the housing market so that more ordinary working people from across the country can have the security of a decent place to live”.

Commenting on the White Paper, Richard Snook, senior economist at PwC, says: “While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking. There appears to be no major new initiatives on tax, the greenbelt or enabling local authorities to borrow to build."

In the 104-page report, new reforms sit alongside existing policies, although most of the detail on how the proposals will be implemented is still to come.

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Points covered in the Housing White Paper:

1. Identify areas where housing is needed most

Councils will be required to produce a realistic plan for housing demand and review it at least every five years.

At the moment, 40 per cent of local planning authorities do not have an up-to-date plan that meets the projected growth in the number of households in their area.

2. Protection of the green belt

Commitment to the green belt is confirmed: "Only in exceptional circumstances may councils alter green belt boundaries."

Instead, key "abandoned" sites in towns and cities and brownfield land near major transport hubs will be targeted as places on which to build homes.

3. Build higher where necessary

Councils and developers will be expected to build higher-density homes in areas where there is a shortage of land and in locations well served by public transport.

4. Speed up house building

Developers will be required to start building on land where planning permission has been granted within two years, rather than three years, or permission will lapse.

5. Encourage more house builders

As 60 per cent of new homes are built by just 10 companies, the Government will back small independent builders through the £3 million Home Building Fund.

6. Help first-time buyers on to the ladder

Those hoping to see relief on stamp duty charges to stimulate the property market will be disappointed.

Existing schemes such as Help to Buy will continue and a plan to offer discounted starter homes will be launched. Such starter homes will have a 15-year repayment period and if they're sold within this time some or all of the discount must be repaid in order to discourage speculative purchases.

Shared-ownership homes will be targeted at first-time buyers who need them most, for those with a household income of less than £80,000, or £90,000 in London.

In April, the Government will introduce a Lifetime ISA to help first-time buyers save for a deposit. On savings of up to £4,000 a year, the Government will pay in a 25 per cent bonus. 

7. Make renting fairer for tenants

The report confirms that letting agent fees to tenants will be banned "as soon as parliamentary time allows", to give renters greater clarity and control over what they pay.

The Government is also proposing to make the private rental sector more family-friendly by promoting longer tenancies, in order to avoid frequent high moving costs and saving children from having to change schools often. The Government also aims to offer longer leases on homes supplied through housing associations and institutional investors.

The Affordable Homes Programme will also be opened up to include Affordable Rent.

8. Encourage build-to-rent homes

Planning rules will be amended to make it easier for councils to plan more long-term build to rent homes.

9. Leasehold fees and charges

Consultation will be held on a range of measures to "tackle all unfair and unreasonable abuses of leasehold", including uncontrolled ground rent rises.

10. Make the best use of existing homes

The Government also aims to consider the shortage of homes for older people - or last-time movers - including retirement housing, in order to release more family homes on to the market for younger buyers.

Local authorities will continue to receive the same financial rewards for bringing an empty home back into use as building a new one. A council tax premium of up to 50 per cent can also be charged on top of the council tax bill on "properties that have been empty and substantially unfurnished for more than two years". 


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