Louise Cutts, Associate at commercial property consultants Vail Williams, navigating through the government’s latest policies and signals, asks: “In supporting the rapid delivery of housing and development land, has the government gone far enough?
“The Autumn Statement clarified and consolidated many of the housing rumours that have abounded over the last few weeks, with a continued emphasis on the rapid delivery of both private and affordable homes and a commitment to the release of Brownfield land. As part of a five-point plan to accelerate the supply of housing, the government has committed to doubling the housing budget to support the delivery of 400,000 homes by 2020 - 2021.
“Local authorities and developers defending housing proposals derided for their lack of accompanying infrastructure will welcome the announcement of funding for supporting infrastructure. At Vail Williams, the support for fast-tracked SME developments is also welcomed, against a growing realisation of the comparative speed with which small developments can be delivered. The cross-party Lyons report published last year made it clear that smaller sites are crucial in maintaining delivery rates together with larger sites.
“The commitment to housing is made at both central and local government level with 160,000 homes promised through the release of publicly owned sites, with additional targets to come for local authorities. The influx of land to the market currently held by the public sector may also assist in keeping land prices more stable, possibly improving affordability in the short to medium term.
Death of affordable renting?
“However, the affordable rented sector, where much of the affordable need lies, appears to be suffering a painful death. Following the 2015 Budget announcement making significant reductions to the funding available for social rented housing, Brandon Lewis recently wrote to all local authority leaders in a bid to reduce any potential delay to housing delivery as a result of renegotiations between developers and housing associations.
“Although the ability to renegotiate Section 106 affordable housing requirements on the grounds of viability has been available for some time, existing guidance has encouraged local planning authorities to be “flexible”. Mr Lewis now implores planners to “respond constructively, rapidly and positively” and to “take a pragmatic and proportionate response to viability”. Local authorities are charged with assessing such applications under delegated powers rather than seeking full Committee approval and requiring only the “minimum amount” of information necessary to justify the renegotiation.
Clamour of S106 changes
“Combined with the Autumn Statement, Mr Lewis’s letter is likely to result in a clamour of Section 106 modification requests for social rented properties to be replaced with shared ownership units, starter homes for those under 40, and other forms of affordable housing; arguably ending the most easily accessible and affordable form of housing for those unable to access homes on the open market.
“Dovetailing with the Starter Home initiative, which seeks a proportion of homes to be available to the under-40s for 20 per cent below market value, the proposals underline the current ideological aim to increase levels of home ownership.
How will affordable housing be delivered?
“However, the Autumn Statement makes no reference to how affordable homes will be delivered in the future with what many see as the impending privatisation of housing associations. Will the Government directly fund developers (including ex-Housing Associations), and directly subsidise the purchase of sites, or will grants be made available to developers specifically for affordable homes? The devil, no doubt, will be in the detail.
Green Belt: the elephant in the room
“At Vail Williams, we welcome the commitment to the release of Brownfield land is welcomed, there is no way-marker in relation to how councils and developers can work together more proactively to bring forward these often highly constrained sites. For some time, collaborative working on such sites has been lacking, but will become crucial if these sites are to feature in rapid housing and employment land delivery.
“Most worryingly is the silence relating to the ever-expanding elephant in the room: the development of Greenfield and Green Belt land. With a continuing need for housing and employment land there is no commitment to a comprehensive review of Green Belt land around our major town and cities, and little that relates to, or promotes the release of Greenfield land.
“It is widely accepted that an expansion in both the availability of land and delivery rates is required to address the housing crisis. To achieve this aim both Brownfield and Greenfield land is required. Whilst one half of the conundrum is on the way to being unpicked, the other continues to be locked down.”
The Autumn Statement at a glance:
- Government commits to release public sector land to provide 160,000 homes.
- Additional targets for the Greater London Authority and Local Authorities are to be announced in the forthcoming budget.
- Establishment of a task force for housing.
- £20 billion committed for the support of housing and local growth.
- Major investment in road, rail, and flood defences.
- Doubling the housing budget from 2018 to deliver 400,000 additional affordable homes which represents the largest investment in housing since the 1970s. This will include:
o 200,000 Starter Homes;
o 135,000 Help to Buy shared ownership homes;
o 10,000 Rent to Buy homes.
- £310 million to deliver 15,000 houses in Ebbsfleet Garden City.
- 40 per cent equity loan for Help-to-Buy initiative for first time buyers in London.
- Housing Association Right to Buy.
- £2.3 billion to be made available for Council Estate regeneration and infrastructure investment for major housing schemes.
- Higher rates of stamp duty for second homes and Buy-to-Let properties.
- Delivery test for timely delivery of Local Plans.
- Additional commitment to Neighbourhood Plans.
- Amendments to planning policy to ensure the release of previously undeveloped commercial/retail/industrial for starter homes.
- Confirmed recommitment to brownfield redevelopment within the Green Belt with reduced red tape, provided starter homes are included.
- SME house builders to be placed on a planning fast track to enable faster delivery on smaller sites.
- Standardised viability assessment approach.
- Right to Buy pilot scheme proposed in partnership with five Housing Associations.
- 27 new Enterprise Zones
For more information about Vail Williams LLP, please visit www.vailwilliams.com.