Housing Strategy 2011

Housing Strategy

On Monday 21 November 2011 the Government published its Housing Strategy Laying the Foundations.

The Strategy aims to set out a package of reforms to:

• get the housing market moving again
• lay the foundations for a more responsive, effective and stable housing market in the future
• support choice and quality for tenants
• improve environmental standards and design quality.

The Prime Minister and Deputy Prime Minister said the Strategy will break the current cycle in which lenders won't lend, builders can't build and buyers can't buy. Addressing the CBI's Annual Conference in London, the Prime Minister said "When first-time buyers on a good salary cannot get a reasonable mortgage, the whole market grinds to a halt. And that ricochets around the economy, affecting builders, retailers, plumbers - all the people that depend on a housing market that is moving." The CBI noted that "The Prime Minister gave an upbeat speech, focused on how the Government intends to move up a gear on its growth strategy and also made clear that within one week, when the Chancellor makes his autumn statement, we would have a new strategy for infrastructure, which will aim to leverage private sector balance sheets to stimulate growth.

Amongst the new proposals in the Strategy of particular relevance to planning for housing are:

• The Strategy will work with the grain of the market encouraging lenders sensibly to give buying power to those willing and able to support home ownership, and allowing housebuilders to respond better to demand.
• A £400m Get Britain Building Investment Fund; this programme will be managed by the Homes & Communities Agency (HCA) and will aim to unlock up to16,000 homes on stalled sites and boost the economy. Starting in July 2012 developers will compete funding to take forward "shovel-ready" projects which meet the right criteria, among them a commitment to affordable homes.
• More support for local areas that want to deliver larger scale new development to meet the needs of their growing communities through locally planned large scale development with a programme of support for places with the ambition to support new housing development on various scales. The Strategy suggests that these developments could take advantage of "streamlined and collaborative planning".
• A consultation on a proposal to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled.  
• An additional £50m allocated, on top of the £100m already confirmed, to tackle the worst concentrations of empty homes, bringing vacant properties back into use.
• Supporting and encouraging more individuals to build their own homes through a Custom Homes programme, including making available up a £30m new fund to support provision of short-term project finance.
• A mortgage indemnity scheme, in which Government will underwrite part of the risk, could help up to 100,000 people. The Home Builders Federation said the lack of mortgage availability since 2007 had been "the biggest constraint" on new homes and the indemnity scheme would help to address this.
• A commitment that for every home bought under the reinvigorated Right to Buy scheme, a new affordable home will be built.
• The Government will launch an independent review into investment in the private rented sector as it seeks to spark institutional investment.

One day after the Strategy was published, new housing data showed that affordable housing starts in the six months to September 2011 in England had fallen by 97% when compared to the same period last year

REACTIONS FROM THE SECTOR 

The RTPI's Chief Executive Trudi Elliott CBE said: The RTPI welcomes Governments focus on the delivery of homes. The Institutes members have a considerable experience of, and longstanding commitment to, working with communities and developers to deliver the right homes, in the right places, with the right infrastructure, and designed sympathetically for the neighbourhoods that they are being built in.
We look forward to working with government to unblock the barriers that exist to building homes. The challenges vary from place to place, and ensuring that homes people want are built in the places people need in todays economic conditions will not be easy, and requires effective planning.

The Chartered Institute of Housing (CIH) warned that the foundations are not robust enough to achieve its aims. CIH interim Chief Executive Grainia Long said: While we are pleased to see housing recognised as central to the countrys economic success and peoples wellbeing, we fear that the Governments strategy does not offer something for everyone, nor does it create a clear vision for the long term future of housing beyond 2015.

The Town and Country Planning Association (TCPA) welcomed the Governments recognition in the Housing Strategy for the powerful opportunity and benefits that large scale, comprehensively planned new communities, such as garden cities, offer in helping to tackle the housing and employment crisis.

The National Housing Federation (NHF) welcomed the recognition that housing is key to kick-starting economy but warns plans to build more homes don't go far enough.

The Federation of Master Builders (FMB) warned that "the Government's new housing strategy is far from radical and only makes a small step in tackling the worst housing crisis we have seen for many years. In particular, it does little to help small and medium sized (SME) house builders who have the potential to deliver the homes that are required if the right policies and incentives were put in place".

The Homes & Communities Agency suggested: "The announcement is a boost to the housebuilding industry, which will also create new quality homes, jobs and contribute to economic growth. [We are] keen to start working with the sector on the design and delivery of the new programmes, and we will be publishing more details in the next few weeks."

The Local Government Association (LGA) commented: "Councils are trusted by local people to ensure that housing meets the needs which they highlighted in their local plans. Councils make a real difference to those needing social housing and help avoid the costs to society caused by insufficient and poor quality housing.

The British Property Federation (BPF) welcomed the new housing strategy, but "warned there must be no delay or timidity in its execution with both house building and the wider economy at crisis point".

The Campaign to Protect Rural England (CPRE) commented: We welcome todays announcement, which acknowledges that it is not the planning system that has been constraining house building, but a lack of finance. Now that the Government has recognised this fact, we hope it will feed into the review of their proposed planning reforms.

The Royal Insititute of Chartered Surveyors (RICS) said: "The focus on new build will not free up chains and may reduce demand for second hand property, putting those who wish to move but have little equity at a disadvantage. Whilst any attempt to stimulate supply and demand will help both consumers and developers, limiting funding to niche areas of the market in this way does not solve the wider need for adequate levels of funding in all parts of the market".

IPPR suggested that "The Governments housing strategy is offering a lot to big builders while asking for too little in return".

The Policy Exchange commented (reported by the BBC): "You cannot solve the problem of expensive housing just by encouraging greater lending. The key isn't demand but supply. We've built fewer and fewer homes despite higher immigration and, much more importantly, older people are living for decades in large family homes. No-one wants to push out people who worked hard for their home, so we need to build more quality family homes where people want to live - in attractive new city suburbs across the UK".

The Human City Institute characterised the Strategy as far from strategic and is effectively a list of policy rehashes, previously announced initiatives and last minute add-ons.

DCLG published its own selection of responses to the Housing Strategy.

MEDIA REPORTING

Inside Housing reported the new strategy with the headline Cameron unveils radical plan to revitalise housing.

Planning ran with Ministers to ease planning rules for new wave of large-scale schemes.

The BBC reported on "Vows to get Britain Building".

The Independent headline was that The Government is set to underwrite mortgages for first-time buyers as part of efforts to "unstick" the housing market.

The Guardian report opened with: David Cameron and Nick Clegg have announced the introduction of taxpayer-backed 95% mortgages as part of a package of measures to help "unstick" the housing market and make the "dream of home ownership" a reality for more people.

The Telegraph in a comment column suggested that Falling house prices, not rising Government intervention, are first time buyers best hope. 

The Times (subscription content) headlined £930m plan to unstick the housing market.

Building (subscriber content) says that Twenty-seven builders, including listed players, back 95% mortgages.

The Chris Brown Blog on Regeneration Development suggests that overall the strategy fails to set out a coherent and credible analysis of the problems or to link the various initiatives together in a mutually reinforcing (strategic) way.

The Live Planning Blog covered a wide range of immediate reactions including A war of words over housing between Labour and the Conservatives.

Prior to the publication of the Strategy the interim Chief Executive of the Chartered Institute of Housing had warned that the Strategy might merely repeat previous announcements. According to the Financial Times the Prime Minister was poised to announce a sharp rise in the number of brownfield sites owned by Whitehall departments, paving the way for a surge in homebuilding, as the Government looks for ways to kick-start the economy. According to the Daily Telegraph the Government was set to hand a boost to first-time buyers by stepping in and 'underwriting mortgages' allowing aspiring homeowners to take out lower deposits. A Guardian Leader noted: This financial crisis began with housing, and any hope of its ending must lie with housing.