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Autumn Statement: Housing – “Can we build it?”

by Paul Addison on December 4, 2015 No comments

The Chancellor’s Autumn Statement and Spending Review has committed the Government to a new target for affordable housing starts (400,000 units by 2021) and further reforms to the planning system which included a proposal to allow previously developed brownfield sites in the green belt to be developed in the same way as other brownfield land.

Other planning reforms signaled will involve establishing a new delivery test on local authorities to ensure “delivery against the number of homes set out in local plans”.

The Statement also promised measures to accelerate the release of public land for housing  and ensure  the release of unused and previously undeveloped commercial, retail, and industrial land for ‘Starter Homes’.

Wide ranging support

Around £4 billion of government cash will be used to help public and private house builders construct 135,000 homes to be sold into  shared ownership. A further £2.3 billion will be made available in loans to build 200,000 homes, help regenerate large council estates and invest in the infrastructure needed to support the expansion.

Under the Help to Buy Scheme, the loans will help young first time buyers under 40 purchase a home at a 20% discount. The homes will have a maximum value of £250,000 outside of London and £450,000 in the capital. All households earning less than £80,000 outside London or £90,000 inside London will be eligible.

The Government has also committed £310m to deliver the first new garden city in nearly 100 years, at Ebbsfleet in Kent. Additional funding will be put towards the construction of 8,000 specialist homes for the elderly and those with disabilities.

Planning policy will also be amended to support small sites. Small and medium sized builders will be helped by the extension of the £1bn Builders’ Finance Fund to 2020-21, and by halving the length of the planning guarantee for minor developments.

The Government will consult on reforms to the New Homes Bonus, including means of sharpening the incentive to reward communities for additional homes and reducing the length of payments from six years to four years.

Housebuilder stocks, such as Persimmon, Taylor Wimpey, Barratt and Berkeley Group, all jumped on the news of the reforms. However, the shine was soon taken off with the announcement that stamp duty hikes for buy to let investors could kill off demand from this sector.

Can house builders and planners deliver?

While there is plenty of optimism set up about getting building, a former Bank of England policymaker has warned that house builders may not be able to meet the country’s needs.

Speaking before a House of Lords committee, Dame Kate Barker said that the country needed around 300,000 new homes a year, but admitted the industry would not have the capacity for years to come.

Dame Kate highlighted figures showing that there was now a housing shortfall of around 1m homes, and there had been an undersupply of around 90,000 homes a year in England for some time.

Also, the latest RICS UK Construction Survey shows that the country’s skills shortage has reached its highest levels since the survey was launched 18 years ago, with bricklayers and quantity surveyors in shortest supply.

Over half of respondents (53%) reported difficulty sourcing labour, with 71% saying they had particular difficulty sourcing bricklayers and 64% highlighting a shortage of quantity surveyors.

Capacity issues may also plague Local Authority planning teams.

While welcoming a need for increased focus by District leaders on planning, Janet Askew, president of the Royal Town Planning Institute, said: “We also need to be realistic regarding the ability of local authorities’ planning teams to deliver these housing initiatives under the current funding arrangements”

Loosening up land allocation

The Chancellor has taken a major step to release swathes of land for residential development with the move to release land which has been allocated for retail or commercial but has not been developed. This could be a hugely important move because it effectively creates a presumption in favour of residential development, as long as that land contributes to starter homes.

The measure would overrule a local authority’s local plan, meaning that if a council has not been able to attract investment for retail or employment then it is opens the door to residential development.

Your clients need the facts on the ground

Given this scenario, it has never been more critical to understand how the local land use zoning and development decisions could impact solicitors and their clients.

At DevAssist, we monitor, interpret and advise on how these threats could impact your client. We go over and above simple local authority and desktop planning searches to uncover the facts on the ground.

Whether it is our standard DevAssess report or the new DevLondon report for the more complex picture in our capital, we ensure that conveyancers are able to give their clients the best advice before it is too late.

For more information on DevAssist’s range of development risk reports, call us on 01342 890010 or email us

Paul AddisonAutumn Statement: Housing – “Can we build it?”

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