Building Societies Association
As widely expected, the new Prime Minister, Gordon Brown, has put housing issues right at the centre of his policy plans. Claiming that housing affordability is a “new and urgent” problem, he has already made announcements on house building, planning and mortgage issues, which culminated in the publication of a Green Paper Homes for the Future : More Affordable, More Sustainable.
This will have come as no surprise to anyone who listened to Gordon Brown when Chancellor. Although DCLG ministers may have technically had responsibility for housing issues, it was the Chancellor who often made the big announcements, claiming that addressing housing affordability was essential for both social and economic reasons.
Noting that current house building levels are only around half of what they were in the 1950s, the Prime Minister has said that “we have got to face up to the fact that we have been building too few houses in Britain.” And too few houses being built, he has maintained, is the reason why prices are so high.
However, it fell to the Housing Minister, Yvette Cooper, to unveil the Government’s Housing Green Paper that sets out it’s plans for new housing. By 2016 it expects 2 million more homes to have been built, and by 2020 it expects that number to have reached 3 million. By 2016 it expects annual housebuilding levels to have reached 240,000 a year to allow this to take place.
A key objective of the Government is to make housing more affordable. As such, the budget for affordable housing is increasing by £3 billion a year to £8 billion. At least 180,000 affordable homes will be delivered over the next three years, with 70,000 a year being built by 2011. At least 45,000 new social homes will be being built each year by 2011 and over 25,000 shared ownership and shared equity homes will also be built each year.
Included in these figures are 100,000 extra homes in 45 towns and cities that make up 29 new growth points, which will receive additional funding. A further round of new growth points will provide a further 50,000 homes. The Government is also proposing 5 new eco-towns, that will provide between 5-20,000 new homes each.
The Government also outlined plans on how this agenda will be delivered. Community land trust pilots in rural areas will give rural communities access to land for affordable housing. Regional Spatial Strategies will be reviewed to ensure that they reflect this planned increase in housebuilding. Local authorities that are delivering high levels of housing, and that have identified at least five years worth of development locations, will be given extra resources, while Government will consult on plans for developers to lose planning permissions if they delay building.
The target for homes built on public sector land is also being raised by 70,000 to 200,000 by 2016. The national target of 60% of new homes being built on brownfield land is to be retained, and a planning gain supplement bill is also expected.
The Government also believes that improvements are needed to ways in which the mortgage market works. As such, it confirmed its support for Sir John Butterfill’s Private Members Bill, on the basis that it will give building societies more flexibility in financing their mortgages. It has also published a consultation paper on new legislative proposals for a covered bond regime in the UK. It claims this will assist lenders finance more affordable longer term fixed rate mortgages.
The Green Paper sets out an ambitious agenda for house building over the next 13 years. The challenge for the Government is now to actually deliver on the plans.
The two papers can be found at the following sites:-
