Out-Law News | 13 Jun 2014 | 5:10 pm | 1 min. read
In his annual Mansion House speech, Osborne set out proposals to make councils pre-approve residential development at suitable brownfield locations, to help deliver sufficient housing while protecting greenfield sites.
"Councils will be required to put local development orders on over 90% of brownfield sites that are suitable for housing", said Osborne. "This urban planning revolution will mean that in effect development on these sites will be pre-approved – local authorities will be able to specify the type of housing, not whether there is housing."
Osborne also pledged to provide financial backing for the nationwide extension of a brownfield development policy announced on Friday by the chancellor and mayor of London Boris Johnson. The policy provides central government funding to finance the clean up and provision of infrastructure at former industrial sites in designated housing zones in return for commitments from developers and local authorities to use the sites for residential development.
"Tomorrow, Boris Johnson and I will jointly set out plans for new housing zones across London backed by new infrastructure, so that we see thousands of new homes for London families", said the chancellor. "And we’ll take the same approach in the rest of the country; with almost half a billion pounds of financial assistance in total set aside to make it work."
In the same speech, Osborne announced new powers for the Bank of England to cap the loan-to-income and loan-to-value rates of mortgages if it considers the housing market to pose a threat to financial stability. Such measures would apply equally to Help to Buy mortgages, said Osborne.
The chancellor defended the Help to Buy scheme against critics he said wanted it to be withdrawn altogether.
"The facts show that Help to Buy is working as intended", said Osborne. "It is helping lower income families, overwhelmingly first-time buyers outside London, to buy homes priced well below the national average. It is not fuelling house price inflation in London or at the top of the market. It is helping families, and that is how we intend to keep it."
Rebecca Warren, a planning law expert at Pinsent Masons, the law firm behind Out-law.com, said: “The chancellor obviously has felt some pressure to react to the IMF’s recent comments about the UK housing market growth. The cap on mortgage borrowing follows on from the controls and assessment in lending introduced in the spring. Yet the ability of people to obtain an affordable mortgage will not be the panacea to the heat in the market that the IMF is after as this measure will not control the attractiveness of UK housing to buy to let, property rental services and overseas investors all of whom vie for housing stock alongside owner-occupiers.”