Now that the media hubbub around the Government’s new Housing White Paper has died down, it’s time to take a step back and assess just exactly what it means for North East England.
Unveiled by Local Government Secretary Sajid Javid, the 104-page document outlined the Government’s proposals to give the housing market a boost, with measures designed to encourage developers to meet a target of 275,000 completed units every year in order to cope with the growing demand for housing. It’s widely recognised that housebuilding in England has lagged behind demand, but will the proposed solutions set out in the white paper help?
First time buyers should welcome the Government’s commitment to the Help to Buy equity loan scheme, which has seen it set aside £8.6billion until 2021. There are also signals that the scheme will continue beyond that period as the Government enters consultations with the sector to define its future.
For people with a lower income there is also good news. To bring it in line with the current shared ownership regulations, the starter-home initiative, which offers first time buyers under the age of 40 the chance to buy a home at 20 percent below market value, will be available exclusively to those earning less than £80,000 (£90,000 in London). To prevent cash buyers, buyers in the scheme must have a mortgage.
We should also see more affordable housing being developed up as housing providers will be required to make 10 percent of new developments affordable. This includes Rent to Buy homes which allow tenants to rent a new-build home at 20 percent below market value for five years, with an option to purchase a part under shared ownership or the entire property if they can afford it.
Those who dream of building or designing their own homes also have reason to rejoice. Custom building, where people are able to choose the design and layout of their home but the developer sources the land, securing permission before building the property to specification, has received significant backing in the White Paper. New Right to Build rules place the responsibility of finding land for those pursuing a custom-build, and keeping a register of those who have expressed an interest in custom-build, on local authorities. Planning departments will receive extra funding to cope with the increased workload along with powers to shorten the period between planning permission being granted and work starting from two to three years. If ground isn’t broken, authorities will have the power to issue compulsory purchase orders in a bid to prevent developers artificially inflating prices through land banking. The authorities will then auction off the land with any profit passed back to the initial owner.
The document didn’t just focus on property owners, there was also good news for renters, who will see new protections and safeguards put in place. In its most recent budget, the Government pledged to ban letting agent fees for tenants, but the white paper goes further with a pledge to bring forward this legislation. In addition, the Government is looking to implement measure from the Housing and Planning Act 2016, which will see rogue landlords and agents banned from operating, and local councils gaining powers to issue fines and prosecute where appropriate.
Whilst some in the media have dubbed the white paper as a ‘sticking plaster’ or ‘kicking the can down the road’, there can be no doubt it will shake up the property market as measures are acted upon and, I believe, give it a welcome jolt.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.