Building for the Future: Will the Housing White Paper deliver?

Sophie Pedder, 21 March 2017

After several delays, the long-awaited housing white paper, entitled “Fixing our broken housing market”, was finally published on 7th February 2017. It opens with a frank admission from both the Prime Minister and the Secretary of State for Communities and Local Government (the Rt Hon. Sajid Javid) on the current state of the housing market. Theresa May admits that “our broken housing market is one of the greatest barriers to progress in Britain today.” Meanwhile, Sajid Javid emphasised that “the shortage of the right homes in the right places has slammed the door of the housing market in the face of a whole generation.” The report opens with the statistic that home ownership among 25 – 34 year olds has fallen to just 37%, a figure that stood at 59% a decade ago.

As is evident from its title, the housing white paper is very clear about the challenges facing the sector.  It also provides a much-needed indication of the future direction of housing policy.  The paper focuses on several key themes: improving and streamlining the planning process, boosting local authority capability to deliver homes, facilitating the availability of land for housing, speeding up the house building process, and diversifying the housing market away from major house builders.  The common goal of all these themes is to boost investment in new housing, but in the “right” locations and with less delays. 

Of these themes, several stand out as particularly notable for investors in the sector.  First is the Government’s openness to different types of housing, which is good news for investment into the private rented sector (PRS).  For investors in PRS, this is a welcome acknowledgment that home ownership is not the goal for everyone and long term, stable rented accommodation is an alternative that should be embraced.  In addition, the government is openly encouraging institutional investment in this type of housing in order to drive up overall housing supply and increase choice and standards for people living in privately rented homes.  It is logical that PRS should help to provide the solution to the UK’s housing crisis, in addition to new build-to-own projects.

Second, in order to speed up the delivery of new homes the government is focused on tackling delays caused by the current planning system.  This will involve increasing system transparency and giving local authorities greater control over the process.  For example, it is proposed that local authorities receive additional information regarding the likelihood of a site being developed before granting planning permission.  It is also proposed that local authorities can withdraw planning permission if a development has stopped and has no prospect of finishing, and the time scale for developers to implement permission is being shortened from 3 years to 2.  This gives authorities greater control over ensuring the developments they granted permission for come to fruition. Furthermore, a new housing delivery test will ensure local authorities are also held accountable for their role in housing development.  A speedier house building process is good news for all parties – from those waiting to buy or rent, to private investors waiting for the return on their investment.

Despite these welcome changes, there are challenges that still require resolution. For example, the availability of land is a key issue and many commentators expected the Conservatives to prioritise housing and withdraw on their pledge to protect the greenbelt.  However, this was ultimately upheld with emphasis instead placed on opening up brownfield sites.  In addition, building new houses isn’t always a smooth process, and developers can face opposition from local communities.  The paper acknowledges that previous governments have failed to “align new infrastructure with new housing”. Additional homes put a strain onto an area’s resources – more competition for a space at the local school, a strain on the local school, a strain on the local GP already feeling the heat or an increase of cars on the road making your commute to work that bit longer. A £2.3 billion Housing Infrastructure Fund had been announced in the 2016 Autumn Statement with the objective of targeting the areas of greatest housing need. Open to bids from local authorities in 2017, money will be available over a four year period and is expected to fund a variety of infrastructure projects from transport to improvements in utilities. This is alongside a further £5 billion in funds announced to tackle other issues surrounding housing. These additional construction works clearly add time to the creation of new homes, but the in the long term positive change will be seen in the new communities created with the social infrastructure in place to support further house building.

Overall, this Cabinet’s white paper makes a strong start at outlining the key policies necessary to rebuild our broken housing market. It is reassuring that the way has been paved for alternative forms of housing such as PRS, and that private investment into the market is encouraged.  Similarly, the proposed steps to streamline and expedite planning applications is a much needed and welcome change. However, the report does not shy away from acknowledging the challenges faced by opposition to new sites or to the slow progress made by local authorities and industries. Disappointingly, there were no further announcements in Phillip Hammond’s 2017 Spring budget for the residential sector, and looking ahead towards the next six months it is likely progress will be overshadowed by Brexit negotiations.  Ultimately we will have to wait and see if the effects of this paper through actions and not just words lead to any positive change and reopen the door to home ownership not exclusively for current first time buyers waiting to take their first step onto the property ladder, but also for those to come.


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