Constituents often write to me about housing policy. I thought it would be useful to provide an overview of the many actions that are being taken by Government on housing related issues.
Overview 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 to those who want it, 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 the Government has 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. There will be a new Housing Complaints Resolution Service, as well as access to redress for leaseholders, private tenants and students in privately run accommodation.
Building New Homes The government is determined to fix the broken housing market. Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable. Official figures confirmed that housing supply increased by 222,000 in 2017/18 taking the total increase since 2010 to over 1.3 million. This represents significant progress in tackling the housing shortage, but the Government is clear that there is a lot more to do.
At the Autumn Budget 2017, 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 was 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. The Autumn Budget 2018 announced further progress to implement this commitment. This will provide support to SMEs, unlock sites, fund much needed infrastructure, and transform run down estates. The Housing Revenue Account cap was abolished from 29 October 2018 in England, enabling councils to increase house building to around 10,000 homes per year. The Housing Infrastructure Fund will increase by £500 million to a total £5.5 billion, to support the necessary infrastructure. This will unlock up to 650,000 new homes.
Supporting First Time Buyers To help aspiring home owners the Government 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 reform has cut Stamp Duty for 95 per cent of first-time buyers, and taken 80 per cent of first-time buyers out of Stamp Duty altogether. This has benefited over 121,000 people to date.
Despite these positive steps, I do understand that saving for a deposit can be difficult, especially when people are renting. The Government’s Help to Buy schemes have successfully assisted over 458,000 households to buy a new home, including more than 402,000 first time buyer households. To make saving easier, the Government has introduced the Help to Buy ISA and the Help to Buy Equity Loan Scheme. The Help to Buy ISA provides a government bonus of 25 per cent on savings up to £12,000. Since its launch in December 2015, over 169,000 completions have taken place across the UK using the ISA scheme, with £188 million paid out in bonuses. The Help to Buy Equity Loan scheme provides homebuyers in England with a loan to help with their deposit. Since its launch, more than 183,000 properties have been bought with the support of this scheme, which has provided over £9.8 billion to homebuyers in loans. Over 148,000 of these loans across England were made to first-time buyers, accounting for 81 per cent.
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 making 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
The Government has also supported new legislation to ensure rented homes are safe and give tenants the right to take legal action when landlords fail in their duties. 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.
A new Tenant Fees Bill will put an end to unfair letting fees and hidden charges. This will make it easier for tenants to find a property at a price they are willing to pay and save renters an estimated £240 million in the first year alone.
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.
Supported Housing 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.
Social Housing The social rented sector supports 3.9 million households across the UK. I welcome action taken to increase the amount of social housing available. Over 127,000 social rented homes have been delivered since 2010, including more than four times as much council housing than was built in the 13 years preceding 2010, however more remains to be done.
In June, I welcomed the announcement of a £1.67 billion investment to deliver 23,000 new affordable homes, including 12,500 social rent homes in high cost areas. £1 billion in extra borrowing is also being offered to local authorities to help them build much-needed council housing. These announcements build on last year’s £2 billion increase for the Affordable Homes Programme, which is expected to deliver an additional 25,000 socially rented homes.
A new deal for social housing residents has been launched in a new green paper, outlining a number of proposals to improve the experience of those living in social housing. These include steps to speed up the complaints procedure, strengthening the Regulator of Social Housing, and introducing performance indicators to hold rogue landlords to account. I welcome these initiatives.