Fixing our broken housing market.
When the Prime Minister appointed me as her Minister for Housing & Planning back in July, she was very clear about what she wanted me and my boss Sajid Javid to do: come up with a plan to fix our broken housing market. Today we are publishing that plan.
It’s very easy to diagnose what’s wrong. For at least 30 years now, governments of all colours have not been building enough homes. And as any student of economics will tell you, when supply fails to keep up with demand prices rise.
Median house prices in England are now nearly eight times median earnings. As a result, young people today are finding it harder and harder to realise the dream of owning their own home. Rents have risen to. The average couple in the private rented sector now pays nearly half their salary to their landlord, making it all but impossible to save for a deposit. And increasing numbers of people find themselves unable to find anywhere to live if they lose their existing tenancy and are accepted as homeless and re-housed, often in temporary accommodation, by their local council.
The Prime Minister spoke movingly on her first day as Prime Minister about making this a country that works for everyone, not just the privileged few. If we’re going to do that we have to fix our broken housing market.
But if the cause of the problem is simple, the solution is not. If there was a silver bullet, one of my predecessors over the last 30 years would have found it. I spent the first few months in this job talking to as many people as possible to try to understand why we don’t build enough homes. After all, our economy produces enough food, clothes and smart phones for our growing population. What’s different about housing?
Part of the problem is the planning system. The state controls what you can build and where and in some parts of the country we are simply not releasing enough land to meet housing need.
But that’s only part of the problem. In the year to September 2016, English councils granted planning permission for 277,000 homes, the highest figure ever. But people can’t live in a planning permission and unfortunately a record number of planning permissions hasn;’t translated into a record number of homes being built. So we need to speed up the process of converting a planning permission into a home someone can live in.
And third we need to diversify the market. We are far too dependent on a small number of large developers. They are not the enemy - we need them to carry on what they are doing and indeed do more, but they are honest enough to admit that on their own they are not going to build all the homes we need so we need to get more people involved.
I am proud of the package we have produced, but it’s important to be straight with people: it’s going to take time to make a difference. And that’s why while the first three chapters of the White Paper focus on what we’re going to do to get more homes built, the last chapter focuses on what we need to do in the meantime until these policies take effect to help people who are struggling right now.
If you’re interested, you can read the White Paper at https://www.gov.uk/government/publications/fixing-our-broken-housing-market, but if you don’t have time to read the whole thing I’ve included a summary of the key policies below.
Planning for the right homes in the right places
• Make sure every part of the country has an up-to-date, sufficiently ambitious plan so that local communities decide where development should go, not speculative applications.
• Simplify plan-making and make it more transparent so it’s easier for communities to produce plans and easier for developers to follow them.
• Ensure that plans start from an honest assessment of the need for new homes and that local authorities work with their neighbours so that difficult decisions are not ducked.
• Clarify what land is available for new housing through greater transparency over who owns land and the options held on it.
• Make more land available for homes in the right places by maximising the contribution from brownfield and surplus public land, regenerating estates, releasing more small and medium sized sites, allowing rural communities to grow and making it easier to build new settlements.
• Maintain existing strong protections for the Green Belt and clarify that Green Belt boundaries should be amended only in exceptional circumstances when local authorities can demonstrate that they have fully examined all other reasonable options for meeting their identified housing requirements.
• Give communities a stronger voice in the design of new housing to drive up the quality and character of new development, building on the success of neighbourhood planning.
• Make better use of land for housing by encouraging higher densities where appropriate, such as in urban locations where there is high housing demand, and by reviewing space standards.
Building homes faster
• Provide greater certainty for authorities that have planned for new homes and reduce the scope for local and neighbourhood plans to be undermined by changing the way that land supply for housing is assessed.
• Boost local authority capacity by increasing planning fees.
• Consult on deterring unnecessary appeals by introducing a fee (refunded if your appeal is successful).
• Ensure infrastructure is provided in the right place at the right time by coordinating Government investment and through the targeting of the £2.3bn Housing Infrastructure Fund.
• Secure timely connections to utilities so that this does not hold up getting homes built.
• Support developers to build out more quickly by tackling unnecessary delays caused by planning conditions, facilitating the strategic licensing of protected species and exploring a new approach to how developers contribute to infrastructure.
• Take steps to grow the construction workforce.
• Speed up build out by encouraging modern methods of construction in house-building.
• Speed up build out on surplus public sector sites through our Accelerated Construction programme that can build homes more quickly than traditional builders.
• Having addressed the things that developers say slow them up, hold them to account for the delivery of new homes through better and more transparent data and sharper tools for local authorities to drive up delivery.
• Having given them extra powers, hold local authorities to account through a new housing delivery test.
Diversifying the market
• Help small and medium-sized builders to grow through the Home Building Fund and supporting development on small sites.
• Support custom-build homes with greater access to land and finance, giving more people more choice over the design of their home.
• Bring in new contractors through our Accelerated Construction programme.
• Encourage more institutional investors into housing, including for building more homes for private rent with family friendly tenancies.
• Support housing associations to deliver more homes through a package of measures.
• Ensure the public sector plays its part by encouraging more building by councils and changing the way the Homes and Communities Agency operates.
Helping people now
• Continue to support people to buy their own home through Help to Buy and launching Starter Homes.
• Help households who are priced out of the market to afford a decent home that is right for them through our investment in the Affordable Homes Programme, which delivers homes for shared ownership, rent to buy and affordable homes for rent.
• Make renting fairer for tenants.
• Take action to promote transparency and fairness for the growing number of leaseholders.
• Improve neighbourhoods by continuing to crack down on empty homes and support areas most affected by second homes.
• Encourage the development of housing that meets the needs of an ageing population.
• Help the most vulnerable who need support with their housing, developing a sustainable and workable approach to funding supported housing in the future.
• Do more to prevent homelessness by supporting households at risk before they reach crisis point as well as reducing rough sleeping.