I thought it would be useful to give an overview of the many actions that are being taken by Government on housing related issues.
We must make sure that the next generation can get on, and climb up, the housing ladder. This must not just be a memory of generations past, but a reality for the future. The Government is implementing a number of different changes to housing policy in order to restore the dream of home ownership, this includes measures to make sure home building is accelerated and to make it easier for first time buyers to take their first step onto the housing ladder. There has been significant progress building over a million homes since 2010 and housebuilding is at its highest level since the crash, but housing remains unaffordable for many. That’s why at the Budget, the Government announced an ambitious package of actions to increase home building and support for buyers.
As well as increasing home ownership, it is important to recognise that the rented sector has a place to play, both private and social rented properties are important, but this does need to be fair to tenants. The Government is taking action to make the private rented sector fairer for tenants, this includes a raft of new measures to crack down on rogue landlords, stamp out overcrowding and improve standards for those renting.
This comes alongside steps to tackle homelessness. The Government is carrying out the most ambitious legislative reform in generations through the Homelessness Reduction Act and investing £1 billion of funding to 2020.
Building New Homes
The failure of successive governments to build enough new homes has left us with a broken housing market that locks out millions of hardworking people and means private renters spend as much as 40% of their income on rent. Official figures confirmed that housing supply increased by 217,000 in 2016 taking the total increase since 2010 to over 1.1 million. This represents significant progress in tackling the housing shortage but the Government is clear that there is a lot more to do.
In November, at the Budget, the Chancellor articulated this Government’s ambition to increase housing supply to its highest level since 1970 by the end of this Parliament and put us on track to deliver 300,000 homes a year on average by the mid-2020s.
This commitment is underpinned by a £15.3 billion package of new financial support for housing over the next five years bringing total support for housing to at least £44 billion by 2022-23. This will provide support to SMEs, unlock sites, fund much needed infrastructure, and transform run down estates. The Housing Revenue Account borrowing cap is to be lifted by £1 billion to get local authorities building. The Housing Infrastructure Fund has been increased to £5 billion to support the necessary infrastructure. To deliver homes in areas of high demand the Government will also support five new locally agreed Garden Towns.
Reforms to Planning
In order to make sure more land is available for housing, whilst still protecting the Green Belt, there is a package of significant reforms.
This will include
1. Consulting on measures to ensure that planning permissions are built out faster by
- strengthening the housing delivery test;
- going further to help SME builders by ensuring a good supply of small sites is identified, as these take less time to build-out;
- removing exemptions from the ‘deemed discharge’ procedure for planning
conditions, so that a start can be made more quickly once planning permission is in place.
2. Launching a review of build out, chaired by the Rt Hon Sir Oliver Letwin MP and developing a national register of planning permissions.
3. Releasing the right land in the right places, including plans to
- deallocate sites from plans if they are no longer likely to be developed;
- intervene where there has been a clear failure to progress local plans;
- boost the housing opportunities of young people and first time buyers through a new ‘first-time buyer led developments’ policy;
- introduce minimum densities in city centres and around transport hubs, with more active use of compulsory purchase for land assembly; and
- make it easier to convert underused retail and employment land or premises into housing.
The Government is also consulting on options to give Combined Authorities and joint planning committees the option to levy a Strategic Infrastructure Levy. It will also speed up and improve the way the Community Infrastructure Levy operates and remove restrictions on Section 106 pooling.
The Budget also announced that councils will be able to charge 100% council tax premium on empty homes to encourage owners to bring properties back into use.
Supporting First Time Buyers
To help aspiring home owners the Chancellor has permanently increased the price at which first time buyers pay stamp duty to £300,000, with homes worth up to £500,000 benefiting. This has effectively abolished stamp duty for over 80 per cent of first time buyers. After less than 2 months this measure had already helped 16,000 first time buyers to own their own home. The changes mean a stamp duty cut for 95 per cent of all first-time buyers who pay it and no stamp duty at all for 80 per cent of first time buyers, with savings of up to £5,000.
It is estimated that the changes to stamp duty mean that the average first-time buyer in Chelmsford will save £3,706.
Despite these positive steps, I do understand that saving for a deposit can be difficult, especially when people are renting. To make saving easier, the Government has introduced the Help to Buy ISA and the Lifetime ISA. The Help to Buy ISA provides a government bonus of 25 per cent on savings up to £12,000. Alternatively, savers will be able to contribute up to £4,000 a year to a Lifetime ISA and receive a £1,000 bonus each year. While the Lifetime ISA can either be used to buy a first home or to fund retirement, the Help to Buy ISA is specifically for those looking to buy their first home. Meanwhile, the Help to Buy Equity Loan scheme has already delivered over 130,000 sales, of which 81 per cent were made by first-time buyers.
Tackling unfair practices in the leasehold market
Leasehold has been a part of the UK’s housing landscape for generations, usually put to sensible use in buildings with shared fabric and infrastructure, such as blocks of flats. Leasehold should be a tool for making multiple ownership more straightforward. However, it should not be, and was never intended to be, a means of extracting ever-more cash from the pockets of already over-stretched house buyers.
Over the past 20 years, the proportion of new-build houses sold on as leasehold has more than doubled. Huge numbers of properties, including standalone houses with no shared facilities or fabric, are being sold as leasehold. In some parts of the country, it’s now almost impossible for a first-time buyer to purchase a new-build home on any other basis. Furthermore, many of these leases contain exceptionally onerous terms, creating future liabilities that leave homeowners unable to find a buyer.
The Government is proposing a number of measures including:
· introducing legislation to prohibit the sale of new build leasehold houses, other than in very exceptional circumstances;
· restricting ground rents in newly established leases of houses and flats to a peppercorn (zero financial value);
· addressing loopholes in the law to improve transparency and fairness for leaseholders and freeholders; and
· working with the Law Commission to support existing leaseholders – including making buying a freehold or extending a lease easier, faster, fairer and cheaper; reinvigorating commonhold to provide greater choice for consumers; and to take forward the work on regulating managing agents.
Protections for Tenants
In January 2018 the government announced it would support new legislation that will help ensure rented homes are safe and give tenants the right to take legal action when landlords fail in their duties. These measures were initially proposed in a Private Member’s Bill and are to protect tenants in both the social and private rented sectors. This will mean tenants can take their landlords to court if they don’t ensure their property is fit for human habitation at the beginning of the tenancy and throughout.
The Government has already introduced a range of powers for local authorities enabling them to crack down on the minority of landlords who rent out unsafe or substandard accommodation. This includes being able to fine failing landlords up to £30,000 and from April this year councils will also be able to issue banning orders to ban the worst offenders from being able to rent out property.
Furthermore, the Government is launching a consultation on barriers to longer tenancies in the private rented sector, and how to encourage landlords to offer them to those tenants who want the extra security.
The Government introduced a new Bill, the Secure Tenancies (Victims of Domestic Violence) Bill, in December 2017. Once this Bill is passed it will mean that when an existing lifetime tenant of a local authority or housing association needs to move to escape domestic abuse, the local authority will grant them a new lifetime tenancy in their new home. This will also apply to those who have recently moved from their social home. This will provide security for victims who need to leave an abusive situation.
Supported housing helps older and vulnerable people to live independently. It is a lifeline for vulnerable older people, for individuals with learning & physical disabilities, for those at risk of domestic abuse, and for many others. It is also an investment in our society and our economy, with the savings it brings to other parts of the public sector, such as health and social care.
The Government has committed to reforming the funding for the housing costs (rent and eligible service charges) of supported housing and consulted on proposals which aimed to deliver good outcomes for tenants, better oversight and cost control, and be more compatible with the modernised welfare system.
The new approach can be broken down into 3 areas, which reflects the diversity of this sector:
- Introducing a ‘Sheltered Rent’ from April 2020, a new type of social rent that recognises the vital role that these homes play in supporting older and vulnerable people. This will keep funding for sheltered and extra care homes in the welfare system, and brings in new but proportionate cost controls.
- Funding for other long-term supported housing (such as housing for those living with a disability, or those with mental ill health) remaining in the welfare system with a commitment to the sector to work to deliver improved cost control, quality and outcomes.
- Short-term supported housing (crisis or transitional accommodation, such as homeless hostels or domestic abuse refuges) to be funded and commissioned by local authorities through a ring-fenced DEL grant.
Furthermore, the Government is aiming to improve local planning for supported housing and commissioning across service areas. This includes proposals for a National Statement of Expectation and local level strategic planning to underpin the new funding regime. These changes will commence from April 2020.
Homelessness and Rough Sleeping
The Government is taking a large range of measures to address the serious issue of homelessness and rough sleeping. The largest rise in statutory homelessness was back in 2003. Whilst current levels are still below this peak, it remains a significant problem. Tackling homelessness and rough sleeping is a key priority for me, and the Government has a bold commitment of halving rough sleeping by 2022 and eradicating it altogether by 2027. In addition to preventing more homelessness from happening in the first place, the Government has taken a number of significant steps.
The Homelessness Reduction Act, the most ambitious legislative reform in decades, will be implemented in April 2018. The Act will transform the culture of homelessness service delivery. The Act will ensure that all English local authorities, public services and the third sector work together to actively prevent homelessness for people at risk, irrespective of whether they are a family or single person, what has put them at risk or if they have a local connection to the area. Local authorities will work with people at risk of losing their homes to develop personalised housing plans, tailored to focus on the needs and circumstances of the household. Acting earlier and for a broader range of people means more people will get the help they need before they face a homelessness crisis.
Over £1 billion has been allocated through to 2020 to reduce and prevent homelessness and rough sleeping which includes:
- £315 million of funding to local authorities and £197 million of central government funding for homelessness programmes;
- £100 million to deliver low-cost move-on accommodation places, for people leaving hostels and refuges to make a sustainable recovery;
- and £402 million in Flexible Homelessness Support Grant funding over the next two years, which local authorities can use more strategically to prevent and tackle homelessness in their areas.
As part of this £1 billion package, the Government is providing £50 million to Homelessness Prevention Programmes, which will deliver an end-to-end approach to prevention and includes:
- £20 million to establish a network of ambitious Homelessness Prevention Trailblazer areas, including £1 million for Essex;
- A £20 million rough sleeping grant fund for targeted prevention and early intervention for those at imminent risk of sleeping rough or new to the streets;
- and £10 million of Social Impact Bond funding to provide personalised support for long-term rough sleepers.
With increased upfront funding, local authorities will be able to tackle homelessness more pro-actively, pushing the balance of the investment away from crisis intervention, and towards prevention.
In addition, as part of the Government’s recent comprehensive package of announcements on Universal Credit, it will introduce a short-term change to how claimants in temporary accommodation receive support for their housing costs. The measure means that Local Authorities will be able to recoup over 80% of their expenditure on temporary accommodation directly from the Department for Work and Pensions.
International evidence has shown Housing First to be effective at ending long- term homelessness in countries as diverse as Finland, the United States, and Canada. The Government has also committed to providing £28 million of funding to pilot a Housing First approach in three major regions of England. The pilots will support some of the most entrenched rough sleepers off the streets and help them to end their homelessness. Individuals will be provided with stable, affordable accommodation and intensive wrap-around support. This will help them to recover from complex health issues, for example substance abuse and mental health difficulties and sustain their tenancies. The impact of these large-scale projects will be measured by a rigorous evaluation and will inform any wider roll out.
A significant challenge for those who are homeless is accessing and maintaining tenancies in the private rented sector. That is why, at the Autumn Budget, the Government also announced £20 million of funding for schemes that will enable better access to new private rented sector tenancies or support in sustaining tenancies for those who are, or are at risk of becoming, homeless or rough sleeping. This will include schemes focused on specific groups, including prison leavers.
Homelessness and rough sleeping is not just an issue of housing, it is a complex issue, and people may require support from a wide range of areas including employment, education and particularly mental health services. In order to establish a truly holistic approach to tackling this issue, the Government has launched a Rough Sleeping and Homelessness Reduction Taskforce that will drive forward the implementation of a cross-Government strategy, with an initial focus on rough sleeping. The Taskforce will bring together Ministers from key departments with a role in preventing and reducing rough sleeping and homelessness to establish a fully cross-Government approach. They will be supported by the Rough Sleeping Advisory Panel, comprising of key figures from Local Government, Central Government, and homelessness charities.