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07/10/2015

Cameron to scrap affordable homes for rent requirement

Words: Laura Edgar

Prime Minister David Cameron has promised to remove planning rules that require developers to build affordable homes for rent in a bid to increase the building of homes for first-time buyers.

In an attempt to move away from generation rent and increase the amount of people who buy, Cameron said in his closing speech at the Conservative Party Conference today that he hopes his new-starter home proposal will unblock house building in the UK by removing the s.106 condition that developers provide a certain amount of affordable housing to rent.

He said the phrase "affordable homes" is deceptive. “It basically means ones that were only available for rent. What people want are homes they can actually own."

“When a generation of hardworking men and women in their 20s and 30s are waking up each morning in their childhood bedrooms, that should be a wake-up call for all of us. We need a national crusade to get houses built. That means banks lending, government releasing land and, yes, planning being reformed,” he continued.

"You can build here and those affordable homes can be available to buy. We are the party of home ownership in Britain today."

Those who buy the new starter homes will be prevented from selling them for a quick profit under the new policy while the definition of affordable housing will change to include starter homes and not just rental properties.

The starter homes proposal was first suggested as part of the Conservative Party election campaign. They will be offered to first-time buyers under 40 at a 20 per cent discount.


Reaction

“We would need to see some careful modelling in order to know whether the changes in the announcement simply increase the prices paid by developers for land or increases the number of starter homes. This should also model the impact of reducing even further the number of social rent and shared ownership homes.”

Richard Blyth, head of policy, RTPI


"We welcome the government's plans to deliver on its pledge to improve home ownership opportunities for young people. Over the past 25 years, as building new homes has become ever more costly and complex, output has fallen and the housing ladder has slipped further out of reach for many.

"Greater flexibility in the way affordable housing is provided should not only speed up the process of securing an implementable planning permission but also make more sites viable for new housing. This will in turn increase availability of homes of all types and help address the chronic shortage that has been allowed to develop.House builders are committed  to delivering high quality, low-cost homes for a new generation of first-time buyers, if the policy environment allows them to."

Stewart Baseley, executive chairman, Home Builders Federation


"The Prime Minister is suggesting a move away from old models of social housing and a focus on what 'affordability' means in a modern context. Local authorities are already encouraged to strike a balance that achieves affordability for both house builders and house buyers but many adhere to out-dated targets for the proportion of social rental units provided. The development industry will welcome the more flexible approach that the government now seems to be advocating."

Martyn Hanmore, planning lawyer, Ashurst


“This proposal is very much welcomed but whilst it is being pushed as a dramatic shift in government policy, and to an extent it is, it is of course going back to what was the case some years ago, when discount market housing was considered to be affordable housing.”

Adam Ross, executive director, Nexus Planning


“Politicians talk about Generation Rent as if it is something to be ashamed of, when this should not be the case. Countries such as Germany and the USA have thriving rental markets, where people happily live in institutionally-backed, purpose-built, high quality rented accommodation for many years.

“While we are not against owner occupation, and see Starter Homes as a welcome initiative, we are aware that such a policy is stoking demand for home ownership, rather than focusing on meeting supply.

"Build to Rent has enormous potential to deliver additional homes to the UK, and government must not overlook this in blind pursuit of making us a nation of homeowners.

Melanie Leech, chief executive, British Property Federation


“The Prime Minister’s announcements are likely to come as little surprise to developers and planners – this is just the latest in a long line of reforms aimed at moving away from the historic social housing format of low rent, for the long term.

“Given the nature of the speech, the Prime Minister was perhaps understandably light on the details, but these raise as many questions as he has answered. The detail to come will be key in how attractive this is to developers in practice, as will the price and age thresholds that will be imposed, which at first blush seem somewhat arbitrary. The issue of shared ownership was a notable absence. This has been the preferred method of providing affordable housing for many developers, and how this model fits into the Prime Minister’s plans will be crucial."

Jason Lowes, partner, Rapleys


"Replacing much-needed affordable rented housing with discount homes for sale, which only a few people can afford, will do little to fix this country's housing crisis.

“The best way for Cameron to boost homeownership would be to get more homes built, and that means properly resourcing local planning departments - not slashing their budgets or introducing endless new targets and penalties, like this government has done.”

David Graham, senior associate partner, Daniel Watney LLP


“The government’s attention is now finally turning to addressing the housing challenge, with political noise now resulting in action.

“Shifting the ‘affordable’ definition to include starter homes for first-time buyers could exacerbate rather than solve the problems of affordability and access to the housing market. Without a blended, multi-tenure approach there is a risk of increased land values rather than increased supply, particularly in London and the South East. And shared ownership schemes – one of the most successful stepping stones to affordable home ownership – could be severely challenged as a result of today’s move.

“The underlying problem of supply remains. The government’s current proposals should stimulate the delivery of homes on sites already identified for development, but there is still a fundamental lack of supply in the parts of the UK where demand is critical and future economic prospects are strong.

“The UK needs a joined-up approach to housing, with homes built in line with infrastructure investment and development, so that people can live close to employment opportunities and new communities can flourish.”

Andrew Jones, practice leader – design, planning & economics, AECOM

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