Are you a landlord, first-time buyer, renter or would-be downsizer? How the Government's Housing White Paper plans will affect you

By Sarah Davidson and Myra Butterworth 

The Government has finally unveiled its plans to fix the 'broken housing market' in a white paper spanning 104 pages. 

Among lengthy reiterations of existing housing policy schemes including Help to Buy were proposals to stop developers land banking, try to speed up planning approvals and support the delivery of more homes to rent.

But some experts have already dubbed the plans a 'damp squib' with little hope of fixing anything. 

Secretary of State Sajid Javid presented the Housing White Paper in Westminster today

Secretary of State Sajid Javid told the BBC Radio 4 Today programme before revealing the bill: 'People want a decent home to buy or a decent home to rent, it's a choice for them, we should be helping both types of tenancies.'

But Shadow Secretary of State for Housing John Healey called the paper 'feeble' and added: 'We were promised a white paper; we’ve got a white flag.'

He was not alone in his disappointment. Simon Gerrard, past president of the National Association of Estate Agents, summed up how most pundits in the industry felt about this long-awaited paper.

'Today’s announcement shows that the Government is good at producing soundbites, but not realistic solutions. It demonstrates a lack of understanding of the market and what is required to fix it. 

'The schemes outlined will be discussed and debated for longer than they are implemented, with nothing new being offered. We need to simplify the system and make it easier to build homes that people want, quickly, and I am disappointed this has not yet been achieved.'

So what has the Government proposed in the paper?

Cutting red tape on planning 

The Government wants to build the 'right homes in the right places'. To do that, they've told local authorities in England (where they have jurisdiction to control housing policy - Scotland, Wales, London and Northern Ireland have their own) to come up with a plan by April 2018. 

These plans will have to be based on meeting local demand for housing - including making sure that enough houses are built for older people and disabled people.

Then local authorities will have to stick to the plan and meet their target number of homes every year - unless, they don't. In which case, the Government will get involved and ask them why they haven't.

Jonathan Manns, head of regeneration and director of planning at Colliers International, said: 'Dig into the (*cough*) detail and, beyond the hollow and misguiding rhetoric, there are odd tweaks to the status quo. 

'Councils, we’re told, should continue to review the targets in their local plans and ensure they’re up-to-date. Hardly ground-breaking but reassuringly familiar.'

The Government is also proposing to cut the time local authorities have to approve planning applications from three years to two.

Will it help? Gerrard doesn't think so: 'The introduction of capping the time between obtaining planning permission and starting construction to two years is misguided. It is not the timescale that hinders building across the UK, but the planning system itself.

'All too often, permission is granted that is simply impossible to implement because local government departments do not communicate effectively with each other.'

What would he do instead? 'The Government should instead focus on encouraging more land to come to market through a capital gains tax moratorium.'

Government wants to move away from relying on traditional building methods

Encouraging smaller builders

Government analysis suggests that nearly 60 per cent of all new homes are built by just 10 big builders. They want to change this by encouraging smaller developers who they hope will use modern methods of construction to speed up how quickly homes are built. 

The Government also wants 'higher density' building in the form of high rise flats, mansion blocks and lots more homes in areas around transport links. 

To do this, they're offering local authorities a carrot: up to 20 per cent more money if they commit to spending it on planning departments.  

Brian Berry, chief executive of the Federation of Master Builders, said: 'This is one of the biggest game changers to come from today’s 100-page Housing White Paper. If this can be shown to deliver real improvements in planning, then it would make a good case for further increases along the lines the white paper suggests.'

There is some question around whether lenders are prepared to offer mortgages on homes built in new and non-traditional ways. The Government claims to be expecting lenders to get on with it though.  

From Nimby to Yimby

Housing targets were abandoned under David Cameron

After a serious backlash from Tory MPs emerged last month over rumoured proposals to build on the green belt, if the Housing White Paper had contained plans to this effect, they were ditched before publication.

The Government instead affirmed its commitment not to build on green belt land, and promised to discourage builders from land banking as well as confirming it would release more publicly owned brownfield land for development.

Part of its plans to stop firms land banking - where land is bought but not developed for years as house prices and land values rise - include the proposal that personal ownership details will be made publicly available on the Land Registry. 

This would allow those sitting on empty homes and undeveloped land to be named and shamed. 

Housing targets, abandoned under David Cameron, will also be reinstated from next year with local authorities responsible for setting these.

Not everyone was impressed by this promise however. Russell Gardner, head of real estate at Ernst & Young, said: 'Despite raised hopes of truly radical reform, today’s white paper represents a timid response to a universally recognised housing crisis. Housing targets may appear admirable but it is vital that the necessary reforms and mechanisms are put in place to allow those targets to become a reality.'

What does the white paper mean for you? 

I want to downsize

After all the front pages screaming about incentives for older home owners to downsize yesterday, the word downsize didn't appear once in the white paper. In fact no mention was made about the potential that cutting stamp duty or providing other incentives for last-time movers could have on freeing up family homes.

The word downsize didn't appear once in the white paper despite rumours there would be incentives for those looking to move

The Government acknowledged the 'many barriers to people moving out of family homes that they may have lived in for decades' and then said they were 'committed to exploring these issues further and finding sustainable solutions to any problems that come to light'. They're not sure how yet.
Slightly more tangible support for older home owners instead came in the form of encouragement for builders to build homes appropriate for older people.

The International Longevity Centre has published research suggesting that there could be a retirement housing gap of 160,000 retirement homes by 2030. If current trends continue, the gap could grow to 376,000 homes by 2050.

Baroness Sally Greengross, chief executive of the ILC, said: 'Local authorities must have a duty to assess the needs of their older population when making housing plans, and ensure that these needs are met before plans are put in place.'

But Trevor Clark, of financial planning firm Rutherford Wilkinson, called the paper 'a damp squib for the older generation'.

He added: 'The white paper did say that custom built houses are to be encouraged and the Government noted its support for sheltered, step down and extra care housing, which offers older people more confidence to move into a new home where their needs will be met.'

Stamp duty is a barrier to buyers: Yorkshire Building Society thinks stamp duty should be paid by sellers to help people climb the housing ladder

I want to buy my first home

There wasn't a lot new for first-time buyers in the white paper - the Government just reiterated what it's already doing for them in the shape of Help to Buy equity loans, Isas, shared ownership and Rent to Buy schemes. 

'The Government will help people save for a deposit, buy with a smaller deposit, buy at 20 per cent below the market price, buy the home they are renting from a social landlord, buy a share of a home or save a deposit while paying a below market rent. We will also target more investment into homes for Affordable Rent,' said the white paper. 

It did give a little bit more detail on Starter Homes for the first time though. This scheme is designed to let first-time buyers with an income of less than £80,000 (£90,000 for London) buy a new-build home with a 20 per cent discount on the price.

The new details included confirmation that these homes will have to be bought with a mortgage to avoid cash buyers speculating for profit and there will also be a 15 year repayment period for a starter home - so when the property is sold on to a new owner within this period, some or all of the discount is repaid.

Andrew McPhillips, chief economist at Yorkshire Building Society,said: 'Financial obstacles are a real difficulty faced by first-time buyers and those moving up the property ladder. We hope Government outlines further policy proposals in the forthcoming Budget, such as considering making stamp duty a seller’s tax rather than a buyer’s tax, that have an immediate impact and long-term benefits.'

I’m a renter

More than four million households rent their home from a private landlord, nearly twice as many as 10 years ago, according to the housing white paper.

Some of these households have to put up with below standard accommodation, but things are improving the Government suggests.

It claims 28 per cent of homes are ‘non-decent’, compared to 37 per cent in 2010.

But the real issues for tenants, it argues, focus on affordability and security.

The white paper highlighted how an average couple who are tenants 'send roughly half their salary' to their landlord each month, making it 'nigh on impossible' for them to save for a deposit to buy their own property.

It said building more homes will help with affordability, but renters often face upfront costs including fees charged by letting agents.

The Government has already announced in the Budget that it would ban letting agent fees to tenants, and the white paper has gone further saying it will look to bring forward that legislation.

Former Chancellor George Osborne announced tough new tax treatment of landlords which don't look likely to be reversed

I’m a landlord

Landlords have been on the Government’s radar for several years and there appears to be no let-up in the white paper.

Already having to contend with tax relief reductions and stamp duty rises, landlords may soon have to add extra layers of red tape to their list of woes. For the Government is considering mandatory electrical checks for rented properties and client money protection for letting agents.

James Davis, chief executive of online lettings agency Upad, said: 'The Government’s continued clamp down on landlords is only going to emphasise the issue that there is too much demand to meet supply, as people live longer in rented accommodation.

'Buy-to-let landlords should be enticed through tax incentives, rather than hiking stamp duty, to bring the rental market back into equilibrium.'

Perhaps the most important aspect of the white paper for landlords, however, is the Government’s desire to make tenancies ‘more family-friendly’ by introducing longer-term tenancies.

While some landlords may appreciate the security of knowing that they have guaranteed rental incomes for longer, it also introduces a potentially limiting layer of inflexibility for landlords.

At this stage, the white paper suggested longer term tenancies could be applied only among homes delivered by housing associations and institutional investors.

It said: 'The predominant use of six and 12 month contracts mean that families who are renting need to move home before they had planned to, which can mean children moving school, alongside the uncertainty and costs associated with taking on a new rental property.

'We are working […] to encourage longer-term tenancies in private rental homes delivered by housing associations and institutional investors. We will be speaking to the Local Government Housing Association about local authorities’ appetite to do the same, where they are delivering market private rented housing through local housing companies.'

It added: 'Further to this we will consider what more we can do to support families already renting privately, while encouraging continued investment in the sector.'

Patrick Littlemore, director of lettings at Marsh & Parsons, said: 'Extra protections and safeguards are welcome news for renters, especially those who’ve experienced dishonest landlords, but it is important to note this works both ways.

'Legitimate landlords must also have protection against rogue tenants, retaining the right to lawfully evict and any restrictions on this could spell disaster. Three-year family tenancy agreements are a good move to provide greater security and stability for renters that want it, so long as the tenant abides by the Housing Act.

'The Government should make sure that measures announced do not dent enthusiasm in the private rental sector among landlords. The buy-to-let sector took a substantial hit with the increase of stamp duty in April last year and additional burdens could make this unattractive, reducing investment and the supply of stock in the much needed private rental sector. 

'Greater stock levels are required to meet the ever-growing demand we’re witnessing and discouraging investment would have huge ramifications for the many young professionals that rely on renting.

'Renting gets a bad name but in reality, many appreciate the flexibility, freedom and choice that comes with it.'

The Government will act to 'promote fairness and transparency' for the growing number of leasehold property owners in England

I’m a leaseholder

The Government also announced in the white paper that it will act to promote fairness and transparency for the growing number of leaseholders, claiming there are currently around four million leasehold homes in England.

It said: 'Leasehold has been a traditional part of the housing market in this country but there are areas where urgent reform may be needed, particularly when buying a house on a leasehold basis. New leasehold houses can be marketed at a reduced price compared to freehold. 

'But some purchasers are not aware at the point of sale that the associated costs of buying a new leasehold house can make it more expensive in the long run. Some freeholds and ground rents of leasehold houses are sold on and traded, with leaseholders left in the dark, and facing increasing and onerous payments. This is not in consumers’ best interests.'

It added: 'In particular, ground rents with short review periods and the potential to increase significantly throughout the lease period may not be offering a fair deal. We are absolutely determined to address this.'

Paula Higgins, chief executive of HomeOwners Alliance, said: 'The focus on leasehold houses is not before time, but we also need to turn our attention to those who have bought them already. 

'Those who were encouraged to purchase through the Help to Buy scheme and the latest wave of new homes, for example, find themselves caught in a leasehold trap - leaving them with the choice of shelling out thousands for their freehold, or living in homes which are unsaleable. 

'The entire system is broken and in desperate need of reform if we are to create a stable housing system that truly works for everyone.'

http://www.dailymail.co.uk/money/mortgageshome/article-4196264/How-Housing-White-Paper-plans-affect-you.html