Out-Law News | 02 Dec 2019 | 11:27 am | 3 min. read
A future Conservative government would amend English planning laws to ensure that supporting infrastructure is built before new homes, and allow councils to offer homes at a discount to local families.
The Conservative Party manifesto also restates a previously-made commitment to build at least one million new homes over the next five years, and targets the construction of 300,000 new homes a year by the mid-2020s.
Councils in England would be able to use developers' contributions via the planning process to discount local homes by a third for "local people who cannot otherwise afford to buy in their area", according to the manifesto. The party suggests that councils could use this power to prioritise homes for police, nurses and teachers needed to work in the area.
Amendments would be made to planning rules to ensure that necessary infrastructure such as roads, schools and healthcare facilities are built before people move into new housing developments. The manifesto pledges a new £10 billion 'Single Housing Infrastructure Fund' to help deliver this infrastructure. Planning rules would also be made "simpler for the public and small builders, and support modern methods of construction", according to the manifesto.
The manifesto also promises support for "new kinds of homes that have low energy bills and which support our environmental targets" and protection for the green belt, with 'brownfield' development prioritised for regeneration projects.
Housing expert Natalie Harris of Pinsent Masons, the law firm behind Out-Law, said: "While many of the housing proposals may fly under the radar, some developers will question the fundamentals that underpin them".
"A one third reduction of house prices in perpetuity may be laudable in terms of immediate affordability but could constrain viability and discourage much needed development if housebuilders are expected to shoulder the cost during the planning process," she said.
Anne Bowden of Pinsent Masons said that it was not clear from the manifesto whether the funding for infrastructure differed from, and was additional to, existing funding, "but public sector funding will be absolutely critical to pump-prime large schemes if the government is insisting that infrastructure be delivered before any housing".
"If this isn't available then developers will not want to touch these complex schemes. It's difficult enough getting major projects off the ground without being saddled with the carrying costs of major infrastructure, potentially for years before developers see a penny of return," she said.
A future Conservative government would encourage the development of long-term fixed rate mortgage products requiring lower deposits across the UK, intended to benefit those who are struggling to obtain a mortgage for their first home. It will "review new ways to support home ownership" once the English Help to Buy scheme ends in 2023; reform and simplify the rules around shared ownership; and extend the right to buy for housing association tenants to further regions around the country.
The housing crisis needs both short term and long term measures to address it. Reform of the planning system is never going to be a quick fix.
The manifesto confirms that a future Conservative government would take forward plans to ban the sale of new leasehold homes, restrict ground rents on existing leaseholds and introduce redress mechanisms for tenants. The party has also put forward a 'Better Deal for Renters', including abolishing 'no fault' evictions and allowing tenants to save up a single 'lifetime' deposit which would transfer to any future rental.
Housing expert Helen Robinson said that extending the Help to Buy scheme to 2023 may be seen as "controversial" by some as "it is has been criticised for driving housebuilder turnrover and profits whilst perhaps only providing a short-term fix to the housing crisis".
"The crisis needs both short term and long term measures to address it," she said. "Reform of the planning system, which will take significant investment and bold steps, is never going to be a quick fix. Extending Help to Buy avoids the inevitable cliff edge if the tap is turned off, but it will need to be wound down eventually."
"Banning leasehold houses is a sledgehammer to crack a nut. It is a tried and tested method of effectively managing estates over the long term, to maintain standards and provide a basic level of property management. The real issue is the disproportionate level and escalation of ground rents that have been set by a small number of unscrupulous developers," she said.
"Homes England will continue to have a key role in delivering the government's housing pledges including supporting modern methods of construction (MMC), which is continuing to gain ground and become a more accepted method of delivery. At present MMC is not particularly cheaper, but it is substantially quicker and more efficient than traditional build. It also requires a different workforce which can be upskilled more quickly than traditional skilled tradespeople," she said.
The Conservative Party has also proposed a new stamp duty surcharge on foreign buyers. The money raised will be used to partly pay for measures to tackle homelessness and rough sleeping. However, Natalie Harris warned that the surcharge could affect the UK's ability to tackle the housing crisis by discouraging much needed investment.
"Foreign investors are piling in to build to rent, student housing and senior living," she said. "Making this more costly might discourage investment."
28 Nov 2019
22 Nov 2019