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How will the new housing white paper affect housing associations?

Social housing providers have a pile of new initiatives in their in-trays. For housing associations and other not-for-profit developers, the paper stresses that ministers have already promised £7.1 billion in funding through the Affordable Homes Programme and have pledged to ‘provide clarity over future rent levels’. But it adds that in return for this, the government expects them to build ‘significantly more’ affordable homes during the current Parliament.
The government is offering local authorities higher fees and new capacity funding to develop planning departments, simplified plan-making, and more funding for infrastructure. They have promised to make it easier for local authorities to take action against those who do not build out once planning permission has been granted. The paper also alludes to the government being ‘interested in the scope for bespoke housing deals to make the most of local innovation’ but offers no further detail.
The request from government is for local authorities to be ‘as ambitious and innovative as possible’ to get homes built in their area and insists all local authorities should develop an up-to-date housing plan, to decide applications for development promptly and ensure the homes they have planned are built out on time.If local authorities do not fulfil this deal, the white paper promises that the Government will intervene and take action.
For housing associations and social landlords, the government has promised to set out a new rent standard for social landlords for the period after 2020 “in due course” to help housing associations build.
The government’s controversial 1% rent cut will continue but pledged measures to help them borrow against future income thereafter. The document also urged housing associations to become more efficient and develop more housing, and said it was developing proposals to set up ways of measuring the sector’s efficiency.

Specific measures in the white paper aimed at social housing providers and local authorities include:

  1. Providing greater certainty for authorities that have planned for new homes and reducing the scope for local and neighbourhood plans to be undermined by changing the way that land supply for housing is assessed;
  2. Boosting local authority capacity and capability to deliver, improving the speed and quality with which planning cases are handled, while deterring unnecessary appeals;
    Supporting housing associations and local authorities to build more homes
  3. Holding local authorities to account through a new housing delivery test.
  4. Encouraging the development of housing that meets the needs of our future population and helping the most vulnerable who need support with their housing, developing a sustainable and workable approach to funding supported housing in the future;

Government announcements are routinely described as ‘radical’ and this white paper was no exception. Sadly, beyond community secretary Sajid Javid’s rousing calls-to-arms to the housebuilding and housing sectors to provide more places for people to live, was a distinct lack of detail. This has led to commentators labelling the White Paper a damp squib. While this may be a little unfair – in parts there are bold moves – in many ways it is by no means clear that ‘Fixing our broken housing market’ is anything like the promised silver bullet to get the UK building more homes. The government has at least acknowledged that the ‘home ownership for all’ ideal is looking further away than ever and has put its weight behind the build-to-rent industry. For instance, there are measures in the paper which promote the building of apartment blocks managed by professional companies and backed by institutional lenders. The rise in stamp duty last April badly hit this sector and it needs help to become established. In addition the emphasis on modern methods of construction is a welcome boost which may help open the market to new – possibly quicker, possibly cheaper – ways of building and therefore selling homes. But it is developers, housebuilders and councils who will be feeling the effect of the proposals the most. Forcing councils to provide comprehensive local plans which calculate their housing needs and which will need to be revisited every five years could put significant pressure on those that do not submit or stick to them. The rises in fees by 20 per cent will help soften the blow and some will say that central government holding local authorities to account more readily is a welcome move.
But what are developers to make of the announcement? Is the spectre of compulsory purchase orders on those developers which retain land for future development enough to scare them into altering their entire approach to creating a pipeline of development land? Some in the industry fear this will actually have the reverse effect of that intended and lead to fewer planning applications. Land is, in effect, the industry’s raw material and needs to be carefully managed if developers’ business models are to work properly. Forcing an increase in the rate of building once work has begun could also be counter-productive and cause developers to only apply for planning permission for smaller sites. If landbanking does exist in real life to the same extent and in the same way as it does in the febrile imaginations of newspaper editors then the government’s plans to beef up the powers of the Land Registry – not so long ago planned for privatisation – could make the ownership of land that much clearer. Ministers hope to have comprehensive land registration complete by 2030.

All in all, the fear lingers that, rather than providing a radical solution to a notoriously intractable public policy problem, ‘Fixing our broken housing market’ just slaps some go-faster stripes on previous white paper policies and calls itself a Ferrari.

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