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Government plan to address long-term housing challenges

Homes England recently set out how they intend to improve housing affordability through a new five-year Strategic Plan – helping more people access better homes in areas where they are needed most. Buildingspecifier takes a look:

The government plan, which runs up to 2022/23, outlines an ambitious new mission and the steps the national housing agency will take, in partnership with all parts of the housing industry sector, to respond to the long-term housing challenges facing the country.

The new plan sets out far-reaching delivery objectives:

  • Unlock public and private land where the market will not, to get more homes built where they are needed
  • Ensure a range of investment products are available to support housebuilding and infrastructure, including more affordable housing and homes for rent, where the market is not acting
  • Improve construction productivity
  • Create a more resilient and competitive market by supporting smaller builders and new entrants, and promoting better design and higher quality homes
  • Offer expert support for priority locations, helping to create and deliver more ambitious plans to get more homes built
  • Effectively deliver home ownership products, providing an industry standard service to consumers

Speaking about the updated plans, Communities Secretary Rt Hon James Brokenshire MP said “This government is committed to delivering 300,000 homes a year by the mid-2020s and help more people get on the housing ladder. Homes England is at the heart of these plans.

“I welcome their comprehensive vision that sets out how through their powers and expertise they will maximise Government investment to deliver the homes communities need.”

Sir Edward Lister, Homes England Chairman, added “Ultimately, we need to disrupt the housing market. Homes England plans to be bold, creative and think big. We hope the whole of the housing sector – big and small, up and down the country – will join us for the next five years and beyond.”

Nick Walkley, Homes England Chief Executive, concluded “The new Homes England is all about making homes happen – and our new 5-year plan sets out our ambitious new approach. We are committing to boosting housing supply, productivity, innovation, quality, skills and modern methods of construction to help make a more diverse and resilient market. In return, we are calling for partners and the wider industry who share our ambition to challenge traditional norms and build better homes faster.”

The five-year Strategic Plan follows the Budget announcement of seven more strategic partnerships with housing associations, which will deliver an additional 13,475 affordable homes by March 2022.

The new partnerships will secure a total of £653m in funding from the Affordable Homes Programme, delivered through Homes England, including homes for social rent in areas of high affordability pressures.

This is in addition to the first eight strategic partnership deals announced in early July, bringing the total number of additional affordable homes that will be delivered to 27,755.

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Over 600,000 homes lay vacant across England alone

  • New study has found that 605,891 homes were unoccupied last year.
  • Liverpool has the biggest problem with vacant homes, with over 10,000 homes remaining empty in 2017.
  • A third of empty homes throughout the country are empty for longer than six months.

A new study has revealed the shocking extent of England’s empty homes crisis, with more than 600,000 homes remaining vacant.

The study, conducted by Good Move, has found that a third of empty homes are classed as long-term vacant, after being empty for more than six months.

The city of Liverpool takes the crown for the most vacant properties, with a staggering 10,512 properties laying empty last year. The data comes despite efforts by Liverpool City Council to reduce the amount of vacant homes with a free matchmaking service to introduce buyers and sellers of empty homes, in a bid to bring more empty homes into use.

Birmingham follows closely behind, with 10,386 empty homes. The city famous for its Bullring accounts for 17% of West Midlands’ total number of vacant homes.

The Yorkshire city of Leeds has the third highest number of empty homes throughout the country, with 10,263 properties vacant. Leeds’ empty homes equates to 14% of Yorkshire and the Humber’s empty homes.

The North West has the most vacant properties, with 102,847 homes laying empty across the region, and 38% of those being vacant for longer than six months. Liverpool has the most empty homes in the North West, and the country as a whole, with 10,512 vacant properties in 2017.

Following closely behind the North West is the South East, with a staggering 86,693 vacant properties last year. Of the 86,000 empty homes, 29% of those are vacant for longer than six months.

The top five cities with the highest number of empty homes are:

City Number of vacant homes (2017) As a % of all housing
Liverpool 10,512 4.70%
Birmingham 10,386 2.40%
Leeds 10,263 3.00%
Durham 10,026 4.20%
Bradford 8,751 4.10%


England regions by number of vacant homes:

Region Number of vacant homes (2017) As a % of all housing Long-term vacant*
North East 43,617 3.60% 17,106
North West 102,847 3.20% 39,344
Yorkshire & The Humber 73,728 3.10% 27,009
East Midlands 52,562 2.60% 18,553
West Midlands 62,919 2.60% 20,996
East of England 58,831 2.20% 17,983
London 62,366 1.80% 20,237
South East 86,693 2.20% 25,378
South West 62,328 2.50% 18,687
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Experts warn that planning system is failing those in greatest need

Councils in the most deprived areas of England are meeting only a fraction of their requirements for affordable housing because the planning system is not set up to deliver homes for people in the greatest need, according to a recent report.

Between 2016-17, Blackpool, Knowsley and Pendle—whose residents take home some of the lowest incomes in the country—saw no new affordable housing delivered through the planning system and less than 7% of their requirement met by other means. On the other end of the spectrum, affluent areas including the Vale of White Horse were able to deliver 96% of their affordable housing using the planning system.

The planning system is one of the main drivers for delivering affordable housing in England, with 70% of councils saying they rely on it substantially to allow them to meet housing need. Local requirements for affordable housing are usually set as a percentage of overall housing delivered on a scheme. Councils have said deprived areas are being left behind by the current system because only high-value areas can meet developers’ profit expectations and still deliver affordable homes.

Figures show that although over half of councils have set a minimum threshold for genuinely affordable housing using their local plans, only 2% actually manage to achieve it.

Developers have traditionally managed to bypass local requirements for affordable housing by first submitting a scheme that meets the threshold, but later backing out of their commitment, claiming unworkable profit margins. The government attempted to address this problem earlier in the year by restricting the use of viability testing to only ‘particular circumstances’, although councils aren’t convinced that this will curb the problem. One official claimed that the changes will simply create new issues, which local authorities will struggle to react to.

The report also finds that councils often specify much lower numbers of affordable housing in their local plans than necessary because they believe that setting a level which meets their true requirement would deter developers from investing in their areas. This has seen deprived areas setting their target as low as 5% of new affordable housing—when the actual need is sometimes as high as 84%­—but still seeing no new homes created for lower-earning residents.

Planning for Affordable Housing, which was funded by the Nationwide Foundation, makes a series of recommendations about what needs to change to the planning system to deliver more affordable housing for people in need across the country, and highlights the critical role that innovative councils are playing to secure more affordable homes.

Henry Smith, projects and policy manager at the TCPA, said “Although housing costs are often lower in more deprived areas of the country, they’re still out of reach for many local people. This research shows that the housing crisis truly is a national problem and not only limited to major cities and those living in the south east.

“Councils are being put in a difficult situation where they’re forced to furiously attract development to meet a five-year target imposed on them by the government, but at the same time negotiate with developers to make sure that what is actually affordable to people most in need.

“Many councils are responding to these difficult circumstances by acting in new and innovative ways, such as fast-tracking planning applications—considered a barrier by many developers—for schemes which meet higher levels of affordable housing. However, to truly make a dent on these numbers the government needs to immediately increase grant levels for councils and housing associations to enable them to deliver genuinely affordable homes. It is also essential that the government creates a definition of affordable housing, which links affordability to income and people’s ability to pay, rather than an arbitrary portion of the market rate.”

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Government’s new planning rulebook to deliver more quality, well-designed homes

Building attractive and better-designed homes in areas where they are needed is at the centre of new planning rules published by Secretary of State Rt Hon James Brokenshire MP this week.

The new rules will also make it easier for councils to challenge poor quality and unattractive development, and give communities a greater voice about how developments should look and feel.

The revised National Planning Policy Framework follows a public consultation launched by the Prime Minister earlier this year to provide a comprehensive approach for planners, developers and councils to build more homes, more quickly and in the places where people want to live.

Revised National Planning Policy Framework

The new rule book will focus on:

  • promoting high quality design of new homes and places
  • stronger protection for the environment
  • building the right number of homes in the right places
  • greater responsibility and accountability for housing delivery from councils and developers

Secretary of State for Communities, Rt Hon James Brokenshire MP said “Fundamental to building the homes our country needs is ensuring that our planning system is fit for the future.

“This revised planning framework sets out our vision of a planning system that delivers the homes we need. I am clear that quantity must never compromise the quality of what is built, and this is reflected in the new rules.

“We have listened to the tens of thousands of people who told us their views, making this a shared strategy for development in England.”

Ministers have been clear on their ambition to achieve 300,000 new homes a year by the mid-2020s, which follows 217,000 homes built last year, the biggest increase in housing supply in England for almost a decade.

The new rules will see 85 of the proposals set out in the housing white paper and the Budget, implemented in the new National Planning Policy Framework.

Promoting high quality design of new homes and places

Refocusing on the quality and design of proposals which are in line with what local communities want, the framework ensures councils have the confidence and tools to refuse permission for development that does not prioritise design quality and does not complement its surroundings.

With an emphasis on engaging with communities and allowing residents to see proposed development before it’s even built, the new framework encourages councils to make use of innovative new visual tools to promote better design and quality, which will also make sure new homes fit in with their surroundings.

Adopted neighbourhood plans will demonstrate clear local leadership in design quality, with the framework allowing groups seeking such plans to truly reflect the community’s expectations on how new development will visually contribute to their area.

Whilst the framework sets the strategic direction for driving up new build quality, it will remain up to councils to apply these polices in the most appropriate way in their area, recognising that they are well placed to know their area’s unique character and setting.

To maximise the use of land we are promoting more effective use of the land available and giving councils more confidence to refuse applications that don’t provide enough homes.

Stronger protection for the environment

The new framework has also been updated to provide further protection for biodiversity; ensuring wildlife thrives at the same time as addressing the need for new homes.

Changes to the framework see the planning system align more closely with Defra’s 25 Year Environment Plan, which aims to leave the environment in a better state for future generations. This includes more protection for habitats, and places greater importance on air quality when deciding development proposals.

It provides strengthened protection for ancient woodland and ancient and veteran trees across England, ensuring they can be retained for the benefit of future generations.

Whilst giving councils real flexibility to make the most of their existing brownfield land, the revised framework makes sure they exhaust all other reasonable options for development before looking to alter a Green Belt boundary.

The government has more explicitly outlined the protection of the Green Belt in England, explaining the high expectations and considerable evidence that would be needed to alter any boundary.

Building the right number of homes in the right places

To help tackle unaffordable house prices in many areas across the country, the framework sets out a new way for councils to calculate the housing need of their local community (including different forms of housing, such as older people’s retirement homes).

This new methodology aims to deliver more homes in the places where they are most needed, based on factors including the affordability of existing homes for people on lower and medium incomes.

Greater responsibility and accountability for housing delivery from councils and developers

From November 2018 councils will have a Housing Delivery Test focused on driving up the numbers of homes actually delivered in their area, rather than how many are planned for.

In addition, to make sure that the necessary infrastructure and affordable housing is delivered to support communities, clearer guidance for both developers and councils will also be published this week.

Meaning that developers will know what is expected of them up front, even before they submit a planning application and councils have greater power to hold them to these commitments.

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Consumers twice as likely to be satisfied with homes built by small house builders

Consumers are twice as likely to be ‘very satisfied’ with the quality of their new home if it was built by a small and medium-sized (SME) house builder, according to research by the Federation of Master Builders (FMB).

Key results from the FMB’s research into satisfaction rates among people who have bought a home in the past five years show that twice as many people (36%) say they are ‘very satisfied’ with the quality of their new build home if purchased from an SME house builder, compared with those whose home was built by one of the top 20 large builders (17%).

Brian Berry, Chief Executive of the FMB, said “There is a popular misconception that new build homes are poor quality compared to period properties that were built to last. Small local house builders, who hang their hat on delivering high-quality new build homes, find this view immensely frustrating. Our research shows that you are twice as likely to be ‘very satisfied’ with the quality of your new home if it was built by an SME house builder as opposed to one of the large top 20 firms. This research draws a clear distinction between what is being delivered by SMEs and what is being delivered by larger firms.”

“For a small, local builder, reputation is everything. They will typically reside in the same community that they’re building in and are therefore doubly motivated to deliver a high quality product that the home buyer will love. Furthermore, SME building firms are more likely to work with a small team of broadly skilled tradespeople. For example, if an SME house builder only employs three bricklayers, they all need to have a wide range of skills and experience. Large house builders tend to use gangs of semi-skilled bricklayers who can lay row upon row of bricks in a line but only a handful of broadly skilled brickies who can turn corners, build chimneys and arches.”

“If we are to improve the image of the house building sector, all house builders, large and small, need to put quality at the heart of every project. Not only will this make our industry more attractive to new entrants, including children and young people, it will soften planning committees to the prospect of new developments. We are in the midst of a serious housing crisis and in order to win people over and make them more pro-development, we need to deliver fantastic new homes that local people would be proud to have built in their community.”

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Construction industry needs 1.5m new recruits by 2021

In a report, Consultancy firm Arcadis suggest that around 400,000+ new workers will be needed each year up until 2021, in order to keep up with ambitious plans within the construction sector – that’s the equivalent of one new person every 77 seconds!

Housebuilding

Plans outlined in the recent Housing Whitepaper are extremely positive for house builders, who will have government support and reduced restrictions to help them deliver the sheer volume of housing needed in Britain today. However, could the lack of skilled people in the sector prove to be a hindrance if left unaddressed?

The report says “When it comes to the much maligned ‘housing crisis’, there is no doubt that the sheer lack of people to physically build the homes we need is evident.

“Between now and 2026 the UK needs to build an additional 110,000 homes per annum on top of those currently projected in order to keep pace with our growing and ageing population.

“Housebuilding is a particularly labour intensive industry and although new technologies and increased off-site production are being implemented to reduce costs and increase productivity, the supply of labour is still one of the binding constrictions on output.

“Existing evidence suggests that the relationship between labour and number of houses that can be built is close to being linear. Therefore, in order to increase the number of homes being built the labour force employed in housebuilding needs to increase by the same share.”

Infrastructure

The report also touches on infrastructure. Britain currently has one of the most ambitious national infrastructure programmes in Europe. With HS2 and Crossrail underway and much more planned, companies in the industry will draw heavily on the common talent pool.

“Despite the uncertain outlook for the UK economy following Brexit, the government under Theresa May seems committed to drive the largest projects forward.

“Moreover, it is expected that the government will set aside more money for road and rail works in order to support the UK economy over the coming years.

“According to figures from the Construction Products Association, the infrastructure sector is projected to grow only by 1.2 percent in 2016. However, for the years from 2017 to 2020 it predicts a pick-up in infrastructure output of 30 percent. Increased demand for people in the infrastructure industry is calculated by assuming that the workforce has to expand in line with this growth.”

To read the full report, click here.
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Up to a third of millennials face renting from cradle to grave

Policy makers need to radically reform the private rental sector to make it fit for raising children and retirement because a generation of young people face the prospect of never owning their own home, according to a new report published today by the Resolution Foundation for its Intergenerational Commission.

Home Improvements sets out a blueprint for tackling Britain’s housing crisis, including tax reforms to discourage multiple home ownership and better support home ownership among the young, along with support for councils to get more affordable homes built.

The Foundation argues that more should be done to build homes and support young people’s home ownership aspirations. However, it also warns that policy makers cannot afford to neglect a crucial part of Britain’s ‘here and now’ housing crisis – poor quality and insecurity in the private rented sector (PRS).

Private renting has grown rapidly in recent decades. At age 30, four in ten millennials live in this way, double the rate for generation X and four times that for baby boomers at the same age. This major shift reflects the fact that, compared to their predecessors, millennials’ access to social housing has fallen as fast as their home ownership rates.

As more millennials reach their child-rearing years, the Foundation notes that policy has failed to catch up with the fact that bringing up children in the PRS has now become mainstream. In 2003, the number of children in owner-occupied housing outnumbered those in the PRS by eight to one. That ratio has now fallen to two to one as a record 1.8 million families with children rent privately, up from just 600,000 15 years ago.

The PRS is the least secure and lowest quality tenure – 2-month notice periods are standard, and one in four properties fail the decent homes standard. The fact that many tenants are on 6 or 12 month fixed term contracts also means that the prospect of large rent rises at short notice are a big concern.

The report argues that the sector will continue to be a major feature of housing in Britain for many years to come. Even if home ownership accelerates rapidly millennials will never experience levels the baby boomers have seen.

More pessimistically, if home ownership growth follows the weak pattern of the 2000s, up to half of millennials will be renting (either privately or in the social rented sector) in their 40s, and a third could still be renting by the time they claim their pensions.

This rising share of retiree renters, coupled with an ageing population, could more than double the housing benefit bill for pensioners from £6.3bn today to £16bn by 2060 – highlighting how everyone ultimately pays for failing to tackle Britain’s housing crisis.

In order to improve the housing offer for renters, the Foundation is calling for:

  • The introduction of indeterminate tenancies as the sole form of contract in England and Wales, following Scotland’s lead and the practice in Germany, the Netherlands, Sweden and Switzerland.
  • Fair balancing of the needs of tenants with the rights of landlords. A landlord could remove a tenant that fails to pay the rent or treat the property well, or if they wishes to sell or reoccupy the home, but cannot simply end the tenancy at short notice without good cause.
  • Light-touch rent stabilisation that limits in-tenancy rent rises to CPI inflation for three-year periods.
  • A new housing tribunal, to ensure landlords and tenants can have disputes resolved swiftly.

Lindsay Judge, Senior Policy Analyst at the Resolution Foundation, said “Britain’s housing problems have developed into a full-blown crisis over recent decades and young people are bearing the brunt – paying a record share of their income on housing in return for living in smaller, rented accommodation.

“While there have been some steps recently to support housebuilding and first time buyers, up to a third of millennials still face the prospect of renting from cradle to grave.

“If we want to tackle Britain’s ‘here and now’ housing crisis we have to improve conditions for the millions of families living in private rented accommodation. That means raising standards and reducing the risks associating with renting through tenancy reform and light touch rent stabilisation.

“For any housing strategy to be relevant and effective for people of all ages, it must include this combination of support for renters, first time buyers and ultimately a level of housebuilding that matches what the country needs.”

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Government commits to further support for neighbourhood planning

More communities across England will be able to get free access to expert advice and guidance to help make their neighbourhood vision a reality, Housing Minister Dominic Raab has announced.

A £23 million fund – being delivered by Locality and Groundwork – will help local groups to develop a neighbourhood plan. These plans give local people a say in the development of their area, including where homes, schools and businesses should be built, how they should look and what infrastructure is needed to support them.

Community groups will be able to access a range of free help including financial support and latest planning expertise from trained professionals, to guide them through the process of preparing a neighbourhood plan.

Housing and Planning Minister Dominic Raab said “Neighbourhood plans are a powerful tool to help communities shape their local area, making sure the right homes are built in the right places.

“It’s vital that communities have the right support and advice available to help deliver a plan that meets their own ambitious aspirations. That’s why I’m making £23 million available that will help more groups to do this.”

Over 2,300 communities across England have started the process of neighbourhood planning, with 530 plans approved in local referendums.

Previous government support has helped around 7 out of 10 of these communities progress their plans, with 365 neighbourhood plans finalised using support provided by the government.

The maximum grant available has also been increased by £2,000 to £17,000, helping communities to access more resources to develop a plan for their area.

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£45 million funding boost to support councils unlock land for thousands of homes

A £45 million cash injection into key community projects will help kick-start the building of thousands of new homes, Housing Minister Dominic Raab has announced.

As part of government’s drive to get Britain building homes again, a total of 79 projects from Newcastle to Plymouth will receive funding to support building up to 7,280 homes on council owned land.

To support local councils to meet their ambition to unlock enough of land they own for at least 160,000 homes by 2020, they will be able to use the Land Release Fund money to combat barriers which would otherwise make land unusable for development.

The projects – which aim to support building strong communities – include a range of necessary works such as asbestos removal and bat alleviation, as well as schemes that will significantly improve quality of life such as essential relocating of a pelican crossing.

This move comes 2 weeks after the projects set to benefit from the first wave of funding from the £5 billion Housing Infrastructure Fund were announced, helping to get up to 200,000 homes off the ground through investment in local housing projects. This is part of the government’s comprehensive strategy of planning reform and targeted investment to build 300,000 homes a year.

Housing and Planning Minister Dominic Raab said “We are investing £45 million to build roads and provide utilities, so councils can release the land to get up to 7,280 new homes built.

“It’s part of our strategy to build the homes Britain needs, and carry local communities with us.

“We’re determined to make buying or renting more affordable for young families and those on low or middle incomes.”

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Average house built in England will have to last 2,000 years

The average new home in England will have to last 2,000 years if the sluggish rate of house building and replacement continues, the Local Government Association have warned.

The country has not built enough homes for decades. As a result, existing homes must house more people and last for much longer, which has led to the country spending nearly as much on the repair and maintenance of existing homes as it does building new ones.

But analysis reveals that one in 10 new home buyers are dissatisfied with the quality of their new home and one in six would not recommend their house builder to a friend.

The research, carried out for the LGA, also reveals most local areas have more homes built before 1930 then from any other period of time, demonstrating the age of much of England’s housing stock.

The LGA is calling on government to help councils build a new generation of high quality, genuinely affordable and additional homes, supported by adequate infrastructure and services. Housebuilders also need to work with councils to ensure new homes are built to a good quality, and will stand the test of time.

With increasing numbers of people in the private rented sector, council leaders are also concerned that 28 per cent of privately rented homes are not decent, an increase of 150,000 homes since 2006. In comparison, council homes are more likely to be better quality, with 85 per cent meeting the decent homes standard, an increase from 70 per cent in 2008.

Local government leaders insist a “national renaissance” in council housebuilding must be central to solving our housing shortage and improving quality, and for delivering the mix of different homes that meet the growing and changing need of communities.

For this to happen, the LGA said councils need to be able to borrow to build and to keep 100 per cent of the receipts of any home they sell to reinvest in new and existing housing.

Cllr Judith Blake, LGA Housing spokesperson, said “Our country’s failure to build enough homes over the past few decades is putting huge pressure on our existing housing stock.

“Families are having to spend more on rent or mortgages every month and deserve a decent home that is affordable. But as costs are rising, so is dissatisfaction with the standards of new homes.

“Everyone deserves an affordable and decent place to live. It’s crucial that all new and existing homes are up to a decent standard.

“Councils need to be able to ensure quality through the planning system, and to encourage high standards in rented and owned properties across the board.

“To spark a desperately-needed renaissance in council housebuilding, councils also need to able to borrow to build new homes and keep all receipts from any homes they sell to reinvest in building new homes that are of a good quality and affordable.”

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