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17/03/2016

Budget 2016: Housing reaction

Words: Laura Edgar
Housebuilding / iStock

The Budget 2016 contained several measures to unlock public sector land and increase the number of homes delivered, including the launch of the Starter Homes Land Fund prospectus. The Planner has collated reaction from industry professionals on these proposals.

Stations ‘natural locations’ for homes

 

Speaking about Network Rail working with the Homes and Community Agency to release more land for development, Vicky Fowler, partner at law firm Berwin Leighton Paisner, said train stations are “natural locations” for intensifying residential or commercial development.

“Unlike much brownfield land that the government would like to see built on, [land near train stations is] often in desirable areas that people actually want to live in”.

Garden city support welcome

 

The commitment in the Budget 2016 to update the New Towns Act has been welcomed by the Town and Country Planning Association.

Chief executive Kate Henderson said updating the legislation provides an opportunity to ensure a “balance between robust citizen rights and creating powerful development corporations to deliver highly sustainable new communities”.

She continued: “By refreshing the New Towns Act, we can ensure that development corporations have transparent legal objectives on sustainable development, climate change and social inclusion and enhanced requirements for participation by the public in the design and delivery of new communities.”

Quality requires councils to get hands dirty

 

Although garden villages and towns “remain high in the rhetoric” with a commitment to reinforcing capacity for these to realised at a local level, for Lawrence Revil, partner at David Lock Associates, expressed misgivings.

Speaking to The Planner, he said: “The failure of successive government to maintain the UK’s world-leading expertise in new settlements that came from the New Towns programme means that it is hard to see where the reinforcements will come in sufficient numbers”.

Encouraging local authorities to drive the development of their areas, he continued, using their own land ownerships, “points to greater potential for partnership with the private sector to ensure that the social benefits of good development are spread widely”.

“Quality requires councils to get their hands dirty, where they can,” concluded Revil.

Fear garden city proposal will fall on deaf ears

 

Dominick Veasey, associate director at Nexus Planning, said from the planning consultancy’s experience of new settlement land promotions, “we fear this initiative will fall on deaf ears within many councils”.

But, he added: “It will be interesting to see exactly what legislative ‘sticks’ will be imposed on local authorities and what financial ‘carrots’ will be dangled in front of them in order to make real and demonstrable progress on this commitment by the 2020 election.”

Smaller garden settlements welcome

 

The legislation to make it easier for local authorities to work together will be "interesting", according to Simon Elliott, from Bidwells planning team, because the Duty to Cooperate “already provides such opportunities through a quasi-legal framework where local authorities genuinely want to work together”.

The support for smaller garden village settlements is welcome, Elliott continued.

“The key here is that they must be locally led; speculative developments are unlikely to be acceptable. This is welcomed, as it is essential that such a large undertaking has the backing of the local community.”

Housing associations faced with difficult decisions

 

The decision to delay the Local Housing Allowance (LHA) cap for tenants in supported accommodation by one year has been welcomed by Mary Taylor, the chief executive of the Scottish Federation of Housing Associations (SFHA), as it allows time for the strategic review.

However, the failure to remove the cap completely means housing associations will still be faced with “difficult strategic decisions”.

“While social rents are typically lower than LHA rates across Scotland, single people under 35, as well as people in supported accommodation, will likely be adversely affected by the cap.

“Earlier this year, the SFHA carried out a preliminary study (pdf) which found that the loss to the housing associations sampled could range from £5.2 million to £14.3 million a year and this could potentially increase to hundreds of millions of pounds a year across the entire Scottish sector.

“Any change to Housing Benefit can undermine the ability of tenants to pay their rent, thereby putting their home at risk and threatening both their physical and mental wellbeing.”

Housing announcements limited in scope

 

The government has set itself a target of delivering one million homes by 2020. But Brian Berry, chief executive of the Federation of Master Builders, pointed out that official statistics suggest that annual housing completions in 2015 totalled just over 140,000, “a long way short of the 200,000 homes” needed every year to meet that target.

He said that although some of the measures in the Budget 2016 are a “welcome step forward”, they are “limited in scope and won’t signal the step change that we need to see”.

“We cannot afford to lose momentum in the battle to beat the housing crisis,” he said.

Little to help developers build

 

Randeesh Sandhu, CEO at Urban Exposure, a residential development finance provider, said: “The chancellor again proudly claimed that this government ‘are the builders’, but there was little new policy in the Budget that will help developers build the houses that the UK so desperately needs.”

The government-led projects such as “the direct commissioning of 13,000 homes will barely touch the sides in hitting ambitious targets”, said Sandhu.

Funding the solutions to the viability on these sites, investing in the required infrastructure and “bolstering the Homes and Communities Agency’s coffers so they can provide funding alongside private financiers were not also addressed”.

The Budget 2016, said Sandhu, was an opportunity to “rest the course” to help the house building industry try to meet the UK’s housing needs.

“However, what the chancellor announced increases the chance that UK housing market could go into reverse,” he concluded.


An overview of the housing measures announced in the Budget 2016 can be found here.

Budget 2016 can be found here.


Image credit | iStock

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