With promises of more affordable houses to rent and measures to ensure developers don’t sit on land rather than actually building, the government’s Housing White Paper was announced last month (Tuesday, 7 February).
The government’s emphasis for the first time on rental rather than home ownership is a seismic shift in rhetoric which was welcomed by the Royal Institution of Chartered Surveyors (RICS).
A view reinforced by Communities Secretary Sajid Javid, who introduced the White Paper, when he was interviewed by Radio 4’s Today programme and said a wider approach than just home ownership was needed with more homes needed to both buy and rent.
But RICS response suggests the White Paper does not go far enough whilst the nation’s landlords, who have already felt the brunt of the government’s policies which has seen a higher stamp duty for second homes or houses for rent and changes to taxes, feel they have been largely overlooked.
The Residential Landlords Association (RLA) went as far to say that without engaging individuals who make up the majority of UK landlords, the White Paper will achieve very little and called for incentives to be offered throughout the rental sector to encourage investment from smaller players to increase the size of their property portfolio and therefore the number of homes available to rent.
Critical of what it referred to as a push towards ‘greater institutional investment in the sector’, the RLA highlighted views from the London School of Economics that individual landlords will remain dominant in the market as they are across Europe. Other issues include the contradictory position of the government calling for longer tenancies which reflect the average tenancy of four years compared to rules imposed by mortgage lenders and insurers which restricts 25% of smaller landlords from offering tenancies longer than a year.
RICS has previously warned the government that urgent action is needed to avoid a shortfall of 1.8 million homes to rent by 2025 and whilst referring to the White Paper as evidence that Westminster was ‘listening’, the RICS was critical of the previous policies that ‘unfairly penalised landlords’.
Building new homes to rent is all well and good, according to RICS, but it also called for the government to introduce measures to make use of existing property such as encouraging the UK’s 2.6 million older homeowners to downsize and free up larger properties for families. RICS also wants to see ‘planning flying squads’ whereby local authorities pool their resources to overcome planning delays and the public sector to make land it owns available for building.
So what does the White Paper propose to meet the demands of the ‘broken’ housing market in England?
Councils will be obliged to plan for their local housing needs, pressure will be brought to bear on developers to build on land they own and a £3 billion fund will be used to help smaller developers to meet the challenge of creating the 250,000 new homes which are needed each year.
A summary of the proposals contained in the White Paper is listed by the BBC in its report.
There will be few who disagree with Prime Minister Theresa May’s sentiment in the paper: “Our broken housing market is one of the greatest barriers to progress in Britain today. Whether buying or renting, the fact is that housing is increasingly unaffordable – particularly for ordinary working class people who are struggling to get by. Today the average house costs almost eight times average earnings – an all-time record. As a result it is difficult to get on the housing ladder, and the proportion of people living in the private rented sector has doubled since 2000.”
However, with ministers admitting the government is behind schedule to build one million new homes in England by 2020, any measures to meet the country’s housing crisis need to be implemented soon and for the results to be felt quickly.