Yesterday we saw the long-awaited release of the Housing White Paper presented by Secretary of State for Communities and Local Government Sajid Javid. While it did well in recognising that the UK housing industry is ‘broken’, did actually put forth any worthwhile ideas or plans?
Right at the beginning it presents the three main problems the housing market faces.
Only around 11 per cent of land in England has been built on. The problem is threefold: not enough local authorities planning for the homes they need; house building that is simply too slow; and a construction industry that is too reliant on a small number of big players.
Making Better Plans
With over 40% of local planning authorities not having a sufficient plan to deal with projected growth in their area, the Government wants local planning authorities to step their game up. Plans will need to be looked at regularly with a requirement for it to be reviewed every five years. Greater transparency is also needed with the release of commercial and corporate ownership data set, and the overseas ownership data set through the HM Land Registry.
Building Homes Faster
Thanks to the Government’s reforms, more planning permissions have been granted to build homes. Yet more than a third of these have not been acted upon. Infrastructure is a well-known issue with regards to new homes as increasing the number of homes in an area places strain on the current schools, roads, transport links etc. The White Paper mentions the £2.3bn Housing Infrastructure Fund that is expected to fund a variety of infrastructure projects (including transport and utilities).
The Government also introduces a new housing delivery test to hold accountable those responsible for delivery new homes in line with projected growth. An example: If delivery of housing falls below 85% of the housing requirement, authorities would in addition be expected to plan for a 20% buffer on their five-year land supply, if they have not already done so.
Enabling More to Build
The current state of affairs of the market show that we are dependent on larger developers to provide new homes. What we need to is encourage small to medium sized builders to grow as every new homes makes a difference. The Government has set up the Home Building Fund that will provide £3bn to small builders in an effort to boost housing supply. Boosting SME builders is an area Relendex is familiar with as peer-to-peer platforms such as ourselves aim to help finance smaller developers that would otherwise be rejected by banks.
Yes the Housing White Paper is certainly a step in the right direction in terms of addressing the housing crisis, but more work needs to be done to ensure that everyone gets the home they deserve.
Read our CEO Michael Lynn’s thoughts on what further action can be taken.
Read the full Housing White Paper here
