The Conservatives have pledged to create a generation of home owners so it’s no surprise that the key focus of the new housing bill is on building more starter homes.
They have even launched a website specifically for people wanting to buy their own home to find out more information on the options available to them.
The aim of the housing bill is to set out plans to build 1 million new homes by 2020.
So how does the government plan to achieve this target?
1. New affordable starter homes
Changes to the section 106 agreement will enable developers/house builders to provide affordable homes to buy instead of affordable homes for rent. Councils will be required to promote these starter homes to first time buyers in the area to help them get a foot on the property ladder.
As outlined in one of our previous blogs there will be £10m worth of funding made available to local authorities to help provide these starter homes by releasing and preparing suitable brownfield sites for building.
However this could affect housing associations who previously relied upon section 106 to provide a proportion of their affordable housing stock. The Joseph Rowntree Foundation reported that these properties amounted to over one third of their affordable home provision in 2013/14.
2. Local Planning reforms
Local authorities will be required to produce detailed local housing plans by 2017 to help fuel further housebuilding on a local scale. Failure to do this will mean government will take control of plans and produce them centrally. According to Whitehall data this currently amounts to 1 in 5 local authorities who haven’t set out any plans. In which case the government would be able to work directly with communities in the area to push through new housing developments.
There are also plans to relax the planning rules for smaller house builders enabling them to gain automatic planning permission on suitable sites.
3. Making more land available
Brownfield sites will now automatically be approved for building so developers/house builders will have one less thing to worry about.
A brownfield land register will need to be kept by all councils and plans put into place to ensure land is allocated to self-builders in the area wanting to build their own home.
4. Right to Buy
As we all know the voluntary Right to Buy deal was passed through parliament and will now mean that tenants living in housing association properties for 3 years or more will be eligible to purchase their home at a discounted rate. In order to help fund this discount the government will ensure that all high value council homes are sold off once they become empty with the funds going towards building new replacement homes.
One of the announcements that came as a surprise was that housing associations may not be fully reimbursed for the market value of the homes they sell onto their tenants under the Right to Buy and may instead receive a grant.
5. Pay to Stay
Social tenants earning a combined income of more than £30,000 (£40,000 in London) will be required to pay market rents to stay in their home. Although this change is bad news for tenants, measures are being considered by the DCLG to ensure this is done gradually rather than an immediate rent increase.
The funds generated from this increase in rental income will work differently for council homes than for housing association properties with all of the money raised from council home rent increases going straight back to the treasury to help reduce the deficit. Housing associations on the other hand will be able to hold onto this extra money to build new homes. Both will be allowed to keep some of the funds back to cover the administration costs of running the scheme.
6. Permitted development rights
Cameron also plans to make the change to the permitted development rights for converting offices to residential properties permanent.
Learn how these proposals will affect you whether you are building your own home, regenerating old housing stock or developing new homes.
By Anna Symington
Please Note: Every care was taken to ensure the information in this article was correct at the time of publication. Any written guidance provided does not replace the reader’s professional judgement and any construction project should comply with the relevant Building Regulations or applicable technical standards. However, for the most up to date LABC Warranty technical guidance please refer to your Risk Management Surveyor and the latest version of the LABC Warranty technical manual.