The Government’s new Housing Strategy for England, published on 21 November 2011, is designed to stimulate the house building sector

1. Support for home buyers

The strategy includes the creation of a mortgage indemnity scheme, with collaboration with the Home Builders Federation and Council of Mortgage Lenders, to offer loans of 95% of mortgage values for new build properties in England. This will be supported by a housebuilder indemnity fund. This complements further support, particularly aimed at first time buyers, which was announced in the Budget, through the FirstBuy equity loan scheme. This scheme will see a joint action between the Government and over 100 housebuilders providing £400 million to help an estimated 10,000 first time buyers purchase a new home in England with the aid of 20% equity loan.

2. Stimulating stalled developments

A further part of the strategy is aimed at developers. In the current economic climate many developments with planning permission have not started or construction has been halted. According to the Government, there is an estimated 133,000 stalled units, with 90,000 units not started and a further 43,000 units which have started construction but have not progressed over the last 12 months. The aim of the new £400 million ‘Get Britain Building’ investment fund is to support building firms in need of finance to continue development to further progress of stalled development sites.

3. Freeing Public Sector Land

An estimated 40% of formerly used sites suitable for development are held by the public sector, both by local and central government. As a consequence the government is aiming to fast track the process of freeing up publically held land for development purposes.

This is already underway with four key landholding government departments publishing strategies last month to release thousands of acres of land to be earmarked for development. The ultimate ambition, according to the Government, is to release land with a capacity of building up to 100,000 homes with the added advantage of potentially supporting up to 200,000 construction and associated jobs in the process. To ensure that the potential of such sites is fully utilised, the Government also proposes implementing a ‘Build Now, Pay Later’ model designed to entice builders, who will not have to pay the upfront cost of the land until the housing is being sold.

planning + development associates

Planning & Development Associates Ltd 123 Pall Mall, London, SW1Y 5EA | T: 0207 1010 789 | E: info@plandev.co.uk | www.plandev.co.uk This briefing contains general information only and is not intended to be comprehensive nor to provide professional advice to cover specific situations. It is not a substitute for such advice and should not be relied upon or used as a basis for any decision or action that may affect you or your business. We accept no duty of care or liability for any loss occasioned to any person acting or refraining from acting as a result of any material in this briefing. © Planning & Development Associates Ltd 2011. All rights reserved.

“If we don't do something like this we are not going to get this vital market moving. We will restart the housing market and get Britain building again.” David Cameron MP, Prime Minister

“This announcement will create more jobs, build more homes and help people to buy a home they can afford. Simple as that. It is incredibly important at this time.” Nick Clegg MP, Deputy Prime Minister

Briefing: A Housing Strategy for England

With a combination of low levels of mortgage lending, a lack of affordable housing and historically low rates of house building, the Government recognises that financial guarantees from both a demand and supply side perspective are needed to reinvigorate the housing sector. As a result, it has put forward a new strategy designed to increase house building.

4. Promoting Planning flexibility

As a further action to encourage progress on stalled developments, developers will be able to require local authorities to reappraise s106 agreements made prior to April 2010, when market conditions were more buoyant and favourable to development. This proposal will be subject to further consultation. The Government will also seek to ensure that any appeals that may result from this provision are dealt with quickly by the Planning Inspectorate to ensure that developers and local communities are given certainty. This is part of a more flexible approach to planning obligations that the Government is advocating which is designed to safeguard against unexpected shifts in market conditions.

5. Dealing with empty homes

With over 700,000 empty homes in England, the strategy aims to increase the supply of housing through reducing the proportion of empty housing, whilst at the same time redressing urban blight which is associated with areas that suffer from high levels of vacant property. As a consequence, empty homes that have been successfully brought back into use will qualify for the New Homes Bonus. Furthermore, £100 million in capital funding will be provided, through the Affordable Homes Programme, to deal with those properties that are likely to remain empty without direct financial support. When properties which are long-term empty, have a negative impact on surrounding properties, the local authority will be able to require owners of such properties to carry out repairs, and in extreme circumstances may even take over the management of the property.

6. Design and sustainability

Complementing the recent Localism Act, which has recently joined the statute books, the Government is engaged in encouraging local communities to have a greater input into the look and design of their neighbourhoods. This, in part, is reflected in the provisions for neighbourhood planning included in the Localism Act. Beyond this, however, the strategy aims to provide funding through the Design Council, to strengthen design support for communities.

This reflects the importance that the Government is placing on good design that reflects local character to ensure that new development has the support of the communities where it is being built. A further provision within the strategy aims to improve the energy efficiency and sustainability of new build property with the introduction of a zero carbon standard requirement for all new homes from 2016. The Government is also aiming to improve the energy efficiency of existing housing stock through the ‘Green Deal’ initiative, due to launch late next year. This will see companies offering energy efficiency investments for householders, the cost of which will be recovered through householders’ energy bills.

If you would like to find out more, or to discuss the implications of the new strategy for your organisation, please contact Alan Gunne-Jones on 0207 1010 789.

planning + development associates

Planning & Development Associates Ltd 123 Pall Mall, London, SW1Y 5EA | T: 0207 1010 789 | E: info@plandev.co.uk | www.plandev.co.uk This briefing contains general information only and is not intended to be comprehensive nor to provide professional advice to cover specific situations. It is not a substitute for such advice and should not be relied upon or used as a basis for any decision or action that may affect you or your business. We accept no duty of care or liability for any loss occasioned to any person acting or refraining from acting as a result of any material in this briefing. © Planning & Development Associates Ltd 2011. All rights reserved.

Briefing: National Housing Strategy

"In recent years many people have been unable to realise their dreams of buying a home because of the huge deposits required by lenders. (The mortgage indemnity scheme)…will allow people to buy their new home on realistic terms and help in particular hard pressed first time buyers." Stewart Baseley, Home Builders Federation