The Housing White Paper 2017 at a glance
Robert Brown and Riccardo Calzavara, Barristers, Arden Chambers
The Government has, at long last, published its Housing White Paper: Fixing our broken housing market. Much of it relates to amendments to the current planning regime which will, invariably, take some time, not just to enact but also to have any effect. As the Secretary of State for Communities and Local Government said this “will take time” but “ordinary working people need help now”. To this end, Chapter 4 of the White Paper is entitled “Helping People Now”, and contains the Government’s proposals to tackle some of the current impacts of the housing shortage in the short term.
The context in which the White Paper is published is a continued housing “crisis”: the median house price is almost eight times median earnings (the ratio has been increasing for most of the last two decades). In part, this is because those who are able to are incentivised to buy a second property, or hold onto a home bigger than their needs, which (in a housing shortage) inevitably pushes up housing prices even further. Infamously, the young are disproportionately affected, particularly as rents continue to increase, locking them into a situation in which they find it increasingly difficult to save for a deposit to buy a house (the White Paper states that “the average couple in the private rented sector now send roughly half their salary to their landlord each month”). The White Paper acknowledges that a shortage of housing has created opportunities for exploitation and abuse of renters, stating that it is “becoming harder to rent a safe, secure property” (which might call into question the failure to support the Homes (Fitness for Human Habitation) Bill 2015-16).
While some of the proposals contained in the White Paper are new, many of them are rehashed. The White Paper’s proposals include the following.
– The Help to Buy and Starter Homes schemes will continue to run, and a Lifetime ISA will be introduced. Previous plans to require 20% of new developments over a certain size to be starter homes have been shelved and will be replaced by an “expectation” in the National Planning Policy Framework that housing sites will deliver a minimum of 10% affordable home ownership units.
– More tenants of private registered providers of social housing will have the right to buy their home, with the pilot extending from 600 households to a further 3,000.
– Further investment into the Affordable Homes Programme, as announced in the Autumn Statement 2016.
– A shift in focus from Starter Homes to a “wider range of affordable housing”, so that the Government expects to help 200,000 people to become homeowners by the end of the current Parliament.
– Renting will be made “fairer” for tenants; in particular, the Government intends to consult on banning letting agent fees (whether this will lead to the Government supporting the Renters’ Rights Bill 2016-17, which is currently at committee stage in the House of Lords, is far from clear, but cl.2 of that Bill would amend the Landlord and Tenant Act 1985 to make charging a fee a criminal offence), and to bring into force the banning orders introduced by the Housing and Planning Act 2016, which are awaiting commencement. The White Paper suggests that longer tenancies will be promoted on new build rental homes (there appear to be similar proposals in the Housing (Tenants’ Rights) Bill 2016-17, as yet unpublished and awaiting a second reading in the House of Commons).
– Action will be taken to promote transparency and fairness for lessees. This appears to arise out of the recent publicity about new build leasehold houses. The Government is particularly concerned about “ground rents with short review periods and the potential to increase significantly throughout the lease period” and proposes to consult on measures to tackle “all unfair and unreasonable abuses of leasehold” (although a proposal to consult probably falls short of the “radical proposals to reset the housing market” that were apparently promised in this report on new build leasehold houses.
– The Government will consider whether any new measures are needed to address second homes and support local authorities to make best use of empty homes. There are currently 204,000 empty homes in England. Higher rates of Stamp Duty Land Tax on purchases of additional residential properties have already been introduced; local authorities have power to impose a council tax premium of 50% on empty properties (under Local Government Finance Act 1992, s.11B, as inserted by Local Government Finance Act 2012, s.12). There are, however, no proposals for what more will be done.
– Development of housing to meet the needs of the future population will be encouraged. This appears to be focused on assisting older people to move, thereby freeing up homes that could be used by the young. The Government will explore how it can do this, in the light of the fees inherent in moving and the invariable emotional attachment that people will have to their homes.
– Supported housing will receive further funding. The application of the Local Housing Allowance rates to supported housing has been deferred until 2019-20. A Green Paper will be published in the Spring with further details.
– More will be done to prevent homelessness by supporting households at risk. In particular, a large number of people are at risk of becoming homeless because of the high and increasing costs in the private rented sector. Indeed, losing a private sector tenancy has become the main cause of homelessness. A programme of reform is already in the process of being debated in Parliament, with the Homelessness Reduction Bill 2016-17 currently awaiting its second reading in the House of Lords. The Government intends to fund “innovative new approaches to preventing homelessness” through the Homelessness Prevention Trailblazer fund, which will be available to 28 local authorities.