Housing White Paper – A Tortuous Game of Twister for the Property Industry?

06.02.17

Patience is a virtue and nowhere is this more true than when it comes to sitting out the much anticipated 'big reveal' of the government's White Paper on Housing. It was initially due to see the light of day alongside the Autumn Statement back in November. That soon morphed into a December target and now it has seen a further 'unspecified' delay and only after being rubber-stamped by 10 Downing Street.

Ministers have painted a picture of a landmark document that will provide the framework for housing policy for the foreseeable future, but some in the industry are worried that it will be a damp squib. So what can we expect?

If housing minister Gavin Barwell and communities secretary Sajid Javid are to be believed, the document will contain punitive measures for developers aimed at speeding up delivery.

In November, Barwell spoke of “carrots and sticks” to boost build-out rates and raise the spectre of a tax on development aimed at capturing some of the uplift in land value that developers receive through planning permission.

In the same month, Javid pledged to end the “stranglehold” large builders have on the market, saying: “It’s time to stop sitting on land banks and stop delaying build-out.”

Some in the industry are concerned about such language, perhaps with good reason when one of the measures understood to be on the cards is fines for developers that don’t meet specified build-out rates on sites.

The government has been closely examining the planning model adopted in central Bedfordshire early last year, in which build-out rates are agreed between the council and developers and written into planning permissions.

Developers who miss build-out targets currently face the prospect of having their planning permission revoked, but Ken Matthews, chair of the council’s development management committee, says that fines might be a better idea.

“At the end of the day, if we revoke the planning permission then completions won’t happen, so a fine could be the answer,” he explains. “[Developers] don’t like their pockets being hit.”

Such a policy would be “untested and onerous”, says Home Builders Federation planning director Andrew Whitaker. He adds: “There can often be unforeseen and unintended consequences that could threaten the progress being made and the significant increases in housing supply we have seen over the past three years.

David Thomas, chief executive of the UK’s largest housebuilder Barratt, warns that “attempts to try and speed up build-out rates could easily have the opposite effect”. “The industry knows it has to step up and help deliver the homes the country needs and we understand the need for transparency to prove that we are on the case, but it’s vital that policy doesn’t end up reducing development trying to solve a problem that isn’t actually there in the first place,” he adds.

But the government is not just considering getting tough on developers; local authorities are also in its sights. The government is keen to get land allocated for housing as quickly as possible - and that means ensuring local authorities create coherent, detailed local plans.

The government is also keen to increase the diversity of players in the housing sector and sources suggest that housing associations will be among the biggest winners. The government has already pledged extra money - £1.4bn nationally - to deliver more affordable homes, and there could be further encouragement to come.

While the white paper may contain some sour notes for the industry, many including Abode2, think that the government’s renewed focus on supply will provide a clearer vision of the steps needed to speed up building. At the very least, the housing white paper will provide some certainty to the industry - and certainty is what is required to solve this long-running housing crisis.

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