What's NEW in the Government’s housing strategy?

Published by 24publishing for 24dash.com in Housing and also in Communities, Local Government

We've all heard the well-trailed messages of new Right to Buy discounts, a public land giveaway and a mortgage indemnity scheme to help first time buyers, but what is new in the Government's housing strategy?

Well, there is a £30 million fund to help self-builders, the emergence of a plan for land auctions and a consultation out next month which plans to enshrine in law priority on waiting lists for armed forces personnel.

100,000-home self build aspiration – and some new cash

Housing minister Grant Shapps has previously set out his intentions to increase the number of homes from self build. Currently, ‘custom home builders’ (as the strategy calls them) are building as many homes each year as each of the volume housebuilders, with around 13,800 custom homes completed in the UK in 2010/11, according to the strategy document.

The Government wants to double the size of the market over the next decade to create up to 100,000 additional self build homes. It will make available public sector land sites and ask councils to investigate the demand for it in their areas. It will also make £30 million available to support provision of short-term project finance to the sector on a “repayable basis”. It is planning to consult with councils on options “shortly” and publish plans in early 2012.

Extra cash to bring empty homes back into use

The Government has pledged an extra £50 million – on top of the £100 million pledged within the Affordable Homes programme already – to tackle empty homes. The £50 million, it says, will be used to tackle concentrations of poor quality homes in areas of low demand. In typical ‘more bang for your buck style’, the Government wants to seek match funding from partners to double the new money. The funding plans will be announced in spring 2012.

Change of law for Armed Forces

The Government will consult next month on a change to the law to ensure that service personnel with urgent housing needs should receive ‘additional preference’ (i.e. high priority) in council allocation schemes – so that they should always be at or near the top of any waiting list.

It is also launching a £1.5 million fund to support the successful integration of retired Gurkha soldiers and their dependants who, having served in the British Army, now wish to settle in the UK.

Private sector and institutional – investment

The Government wants to attract institutional investment in private homes for rent. Only 1 per cent of residential stock in the UK is owned by institutions, compared with around 10–15 per cent in most European countries.

The Government says changes to the Stamp Duty Land Tax could lure large-scale investors into residential property as they’ll only have to pay a typical 1% instead of 5% on bulk purchasers.

It has consulted on plans to significantly reform the Real Estate Investment Trusts, which it says, offers “real potential for large scale residential investment to begin to happen”.

Savills and Willmott Dixon have already announced the launch of a joint venture to develop a national portfolio of private rented housing. They plan to bring forward sites that would otherwise be undeveloped.

Build to let to fund social rent

It cites the model used by the London Borough of Barking as a way to highlight how council’s entering the build-to-let market can build homes for social rent.  In that example, the council provides the land at nil cost and will let homes at a variety of rents – from social up to 80% of market rents. In return, the investor funds the build, earns income from the rents and the houses return back to the council after 60 years.  

The Government wants to pilot in partnership with local authorities, investing Homes and Communities Agency land in the development of new rental homes.

The first scheme will be at Spencers Park in Hemel Hempstead. It will include homes for rent and sale, including plots for self builders (or custom home builders). Further sites will be announced in April 2012.

Private sector enforcement

The Government says it will leave councils to regulate the private rented sector and “make full use of the robust powers they already have to tackle dangerous and poorly maintained homes”.

It had been thought the Government might take steps to regulate the sector.

Supporting people

The Government has come under intense pressure from charities and support providers to restore a ring fence to the programme, after councils - who have had their budgets slashed - have been making bigger cuts to the programme than expected.

The Government says it’s working with several councils and other partners to explore “personalised budgets” for Supporting People services – providing people with cash budgets they can use to pick services that best suit their lives.

According to the strategy, these areas are currently developing their own local methodologies with a view to the delivery of the first Supporting People personal budgets in 2012.

The Government adds that 10 local authorities will be “testing out a range of innovative payment-by-results models” with provider partners in relation to Supporting People services. It says these models are being tested until 2013 and are focusing on approaches which aim to “improve innovation, outcomes and the value for money of housing-related support services”.

By spring 2012 the payment-by-results models will go live in the pilot areas.

Section 106s

The Government wants to cut the period of time developers have to wait before asking for the renegotiation of section 106 planning obligations. The plan, which it will consult on next month or in January, is to reduce the period from five years to two years for planning applications agreed on or before 6 April 2010.

Setting a date for ‘land auctions’

The Government has finally set a date for its land auction pilots, nearly nine months after announcing the initiative in the Budget.

It thinks auctioning parcels of land with planning permission has the potential to bring forward more land for development, increase competition in development and provide greater certainty for developers.

With the Ministry of Defence and the HCA, it says it has identified a number of public sector sites, for example in Catterick, West Lancashire and Hastings, where it will invite local authorities to work in partnership with the Government in the auction pilot.

It says it has set aside funding to support the participating local authorities.

The document says: “Working with the landowners, the local authorities would make arrangements for applying for planning permission and selling the sites in open competition, and for the sale proceeds being shared between the local authority and the landowner.”

Next month, it will confirm the sites and by March 2012 it will secure the details and fund councils. In the same month, it will report on progress and learning.

26,000 new homes…over 10 years

The Government has estimated that 26,000 new homes could be built over 10 years as a direct result of two of its flagship policies – Neighbourhood Planning and the Community Right to Build.

Neighbourhood plans will see communities able to set their own vision for the future of their neighbourhood and following a referendum, consolidate this vision in a statutory plan.

Community Right to Build is where communities will have the power to take forward development in their area without needing to apply for planning permission, subject to meeting certain safeguards and securing 50% support of the community through a referendum.

Both rights will be introduced in April 2012.

Housebuilders to fund new mortgage scheme

It was originally thought that the ‘new build indemnity scheme’ – which will see first time buyers front up just 5% of the deposit for a house – was going to be underwritten by taxpayers.

However, housebuilders will be asked to part-fund it contributing a set percentage of sale price to a fund for each transaction. This fund will take the first loss in the event of repossession. The Government will then provide an additional guarantee to increase the total security against each loan.

The scheme, says the Government, will enable people to secure up to a 95% Loan to Value (LTV) mortgage on all new build (houses and flats) in England, and would be available to all mortgage lenders and housebuilders.

Older people’s housing

The Government has set out a package of measures to help the elderly adapt their homes, or move into alternative housing, to meet their changing needs. As part of this package, the Government will work to develop simple and attractive financial products that help older home owners safely release equity that they can then use to maintain or adapt their homes.

The Government is also providing £51 million of funding for so-called ‘handyperson’ schemes between 2011-15 to deliver small home repairs and adaptations.

The Government is working with Home Improvement Agencies (HIA) - who deliver 50% of all Disabled Facilities Grant-funded adaptations – to extend the reach of HIA services and to ensure that the Green Deal works for older people.