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Is the King’s Speech a new dawn for housing?
Paul McDermott, a partner in the public sector group at Trowers & Hamlins, analyses the government’s early commitments on planning
Paul is a director and partner at Trowers & Hamlins who has advised various London councils, the GLA and Homes England on legal and ...more
The Labour government has ambitious plans to facilitate the delivery of 1.5 million new homes (including a significant proportion of affordable ones) within five years.
The government has been clear that public sector finances are not healthy and that significant new funding for priorities from health to housing will be dependent on economic growth. Housing will also have to compete for any extra funding with other priorities.
At first glance, the King’s Speech is light on detail about how the government will facilitate the delivery of its housing targets. However, it does reflect the government’s approach of seeking to stimulate the delivery of new homes and improve the quality of existing private rented properties by making it easier for the public sector to facilitate, and both the private and public sectors, to build or improve stock.
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There are also proposed regulatory changes which seek to give private tenants and leaseholders more security and better protection against what the government considers to be unfair practices.
The Planning and Infrastructure Bill’s objective is to streamline (and quicken) the delivery of critical infrastructure and housing; infrastructure examples include energy and major projects (which are likely to include the proposed New Towns). The government confirmed its priorities are to develop brownfield sites, New Towns and underutilised or derelict developments in the green belt (grey-field sites).
The bill will also reimpose housing targets on local authorities; facilitate the appointment of 300 new local planners; and “modernise” planning committee processes.
The bill appears to have been generally welcomed, although the BBC reported Ant Breach, associate director of the Centre for Cities, said it “must be a first step in a series of planning reforms” if the government’s housing target is to be delivered. Compulsory purchase compensation would also be reformed under the bill.
“The government confirmed its priorities are to develop brownfield sites, New Towns and underutilised or derelict developments in the green belt”
Though landowners would be “fairly” compensated, the ‘hope value’ of any compensation would reflect the non-market values of delivering important social and physical infrastructure, as well as affordable housing where this is to be built on the acquired land.
The government has identified tenancy insecurities experienced by many of England’s 11 million private sector tenants and the Renters’ Rights Bill seeks to address these. This bill will abolish ‘no-fault’ evictions and strengthen private tenants’ rights (including challenging some rent increases). Some opposition parties support longer minimum tenancy periods and it will be interesting to see if parliament adopts this as the bill progresses.
The bill will require privately let homes to meet the Decent Homes Standard, with landlords given statutory time frames to address problems where a home is unsafe. A private rented sector database will also be created, which, in part, will enable councils to target enforcement measures against poor landlords.
It will be illegal for landlords to discriminate against tenants in receipt of benefits or because they have children, though, presumably, landlords will decline tenants if their benefit entitlement means they are not able to afford the market rent of a home.
The bill may also encourage institutional/professional landlords which are better equipped to meet the new standards and whose business models allow for longer and dependable tenancy periods. Such landlords already provide a significant amount of market-rent housing in both North America and the rest of Europe.
Pension and other funds potentially could deliver sufficient new build-to-rent homes and contribute to the government’s housing targets. Such funds might also be interested in exploring financial models to deliver sub-market-rent homes.
“The government’s approach is to make it easier, at a local level, for the public and private sectors to develop decent housing”
The Leasehold and Commonhold Reform Bill is intended to make it easier for leaseholders to extend their leases or manage their buildings. The government will also consult on regulating ground rents for existing leases and what it terms “unfair” costs. The government has a clear preference for commonhold over leasehold and it intends to “reinvigorate” the former by modernising commonhold’s legal framework. Forfeiture will also be removed as a remedy for small debts.
The government has praised Greater Manchester as a devolution success story; the area outperformed most UK regions economically. The English Devolution Bill will make city and county devolution a default setting. This offers a route to transfer resources and responsibilities from Whitehall to local areas. Areas will be better able to co-ordinate initiatives in their local economy, including regeneration and housing objectives, and ensure that funding is aligned to do that.
A future Budget or spending review might allocate more public funding to housing. However, the government’s approach is to make it easier, at a local level, for the public and private sectors to develop decent housing and reset regulations in the private rental sector to align more with the standards and security provided to tenants of affordable homes.
Paul McDermott, partner in the public sector group, Trowers & Hamlins
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