UK: The Housing White Paper - The Virtuous Circle

Last Updated: 7 April 2017
Article by John Adams

Most Read Contributor in UK, August 2017

The Housing White Paper, published in February 2017, combined with the Autumn Statement's commitment of £8bn to the supply of housing, should accelerate the delivery of new homes in the UK and broaden the composition of supply.

As a panelist at the National Planning Summit, I identified the key proposals in the White Paper that have the potential to make a real impact when combined with the Government's funding commitments, see Slide 1, which I have called a Virtuous Circle:

  1. The release of public sector land
    The Government is committed to releasing surplus Government & local authority owned land with the capacity to deliver 320,000 homes by 2020. Capacity to bring this land forward will be supported by a £45m Land Release Fund, backed up by the £2.3bn Housing Infrastructure Fund announced in the Autumn Statement. Much of the public sector land is located in areas of great housing need, such as London and the South East, with the potential for high densities around public transport hubs (another theme of the White Paper), with organisations like Transport for London taking the lead.
  2. The general disposal consent
    The procurement rules regulating local authorities disposing of land for housing will be streamlined. Local authorities will be able to dispose of land for housing, that they have granted planning permission for, at less than the highest price, without the need for approval by the Secretary of State. They will be able to take the decision themselves to dispose to the developer with the Best Housing Solution, not necessarily the highest price.
  3. Recognising the special contribution of Build to Rent
    The proposed changes to the National Planning Policy Framework (NPPF) will give support to large scale Build for Rent (BtR) schemes, with a new definition of affordable housing to include Affordable Rent, as an alternative to Home Ownership options, and support for Local Authorities allocating sites for BtR. This should help unlock the huge institutional investment in BtR that has been estimated to exceed £50bn. The amendments to the NPPF will need to be strong, and this is an area for the BtR sector to focus their consultation response.
  4. Supporting the growth of small housebuilders
    The White Paper is not just focused on the release of strategic sites and new settlements; it is also creating a more balanced composition of housing land supply. Local authorities will have to create a balanced land supply, with small sites allocated in Local Plans, as well as strategic sites. This, combined with the public sector land being brought to the market, will provide opportunities for small housebuilders. The Homes Building Fund will also target the growth of this sector.
  5. The tough new Housing Delivery test
    Many local authorities will not wait to be penalised for not delivering their five year housing supply, and will take a much more proactive role in managing the pipeline of housing land. The White Paper encourages the direct involvement of local authorities in delivery. Funding will be available to build capacity within planning departments, and the White Paper supports the creation of New Town Development Corporations, and the use of CPOs.
  6.  An accelerated delivery fund supporting modular off-site house construction
    Innovative technology in off-site modular construction is vitally important to creating new capacity in the industry and accelerating delivery. It would be good to see White Paper's support mirrored in the Industrial Strategy. A world class modular construction industry represents a major economic opportunity for the UK.
  7. Funding the growth of Housing Associations
    Housing associations already deliver a third of new homes in London. The £7.1 bn Affordable Homes programme should enable this sector to grow. The release of public sector land is a great opportunity for housing associations, working in partnership with housebuilders.
  8. Local Authorities building new homes
    The White Paper encourages local authorities to take a greater role in the direct delivery of housing. Slide 2 shows how local authorities were the largest providers of new housing in London; there was a similar picture nationally. At that time London was delivering around 37,000 homes per annum. Recently, new home completions have reached 25,000, a sharp increase, but well short of the target of 50,000 homes per annum.

To achieve the step change required in London and rest of the UK, the composition of housing supply needs to broaden. Slide 3, shows a straw man of what that might look like in 2025 if 50,000 homes per annum are to be achieved:

  • a growing private sector housing industry, with new entrants in the small and medium sized housebuilders;
  • a mature Build to Rent sector;
  • a significant contribution from local authorities and housing associations; and
  • off-site modular construction increasing capacity throughout the industry.

Another key opportunity in the White Paper is the option of preparing Spatial Strategies which focus on strategic sites, in effect streamlined Local Plans that do not cover all the detailed policies that are normally included in plans. Spatial Strategies prepared by combined authorities across large housing market areas, cities or counties or sub-regions, have great potential to ensure a co-ordinated delivery of housing growth. It is through joint working that local authorities can pool resources and skills and build capacity to manage housing growth. This may often be linked to city deals with devolution and the election of mayors across city regions, such as is happening this May 2017 in Cambridge & Peterborough, Greater Manchester & the West Midlands.

In combination, all of the measures in the Housing White Paper with the Autumn Statement financial commitment will make a significant contribution towards driving the accelerated delivery and also a broader composition of housing supply.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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