Housing market “broken” say ministers, as housing white paper announced

Ministers have admitted that the housing market in England is “broken”, as they unveil plans to build more affordable homes in the government’s housing white paper to be announced today.

The new housing strategy for England includes measures to force councils to plan for their local housing needs and powers to enable local authorities to put pressure developers to start building on land they own.

Speaking on the Today programme this morning, communities Secretary Sajid Javid said that people wanted a decent home to live in and not a “false choice” between renting and owning. “It shouldn’t all be about ownership,” said Javid. “Some people by choice want to rent. The fact is we haven’t been building enough houses for decades under successive governments. The current system is not working and I think it is the biggest barrier to social progress in Britain today,” Javid said.

Javid said that having a home of their own to rent or buy was currently only a dream for many young people because house prices in England were eight times average earnings. “That’s a record high,” Javid said. “The market is broken and it’s time to get real and that’s exactly what this white paper does,” he said.

The white paper is expected to include a range of measures including: -

  • Requiring councils to publish “realistic” projections for future housing demands and review them every five years.
  • Expecting developers to avoid “low density” housing where land availability is short and to “build higher”. 
  • Reducing the time allowed between planning permission and the start of building from three to two years
  • Using a £3bn fund to help smaller building firms challenge major developers, including support for off-site construction, where parts of buildings are assembled in a factory
  • A “lifetime ISA” to help first-time buyers save for a deposit, which will be launched in April. 
  • Extend right to buy to housing association tenants.
  • Maintaining protection for the green belt, which can only be built on "in exceptional circumstances" 
  • Starter Homes will be aimed at “households that need them most” with combined incomes of less than £80,000 or £90,000 in London. There will be a change in focus from starter homes to “a wider range of affordable housing”.
  • Minimum tenancy lengths for private renting, to offer security to renters and increase the number of homes built for rent
  • A consultation on measures to “to tackle all unfair and unreasonable abuses of leasehold” and move to reduce the number of vacant properties.
  • New measures to support offsite construction or prefabricated housing.

Javid said that little progress had been made towards building the 250,000 homes a year target that has been around “for years” and admitted that the government is behind schedule in its efforts to build one million new homes in England by 2020. “The only way to halt the decline in affordability and help more people onto the housing ladder is to build more homes. Let’s get Britain building,” he said.

Labour said that the government had presided over seven years of failure on housing. Shadow housing minister John Healey said: “The measures announced so far in Theresa May's long-promised housing white paper are feeble beyond belief. “After seven years of failure and 1,000 housing announcements, the housing crisis is getting worse not better,” he said.

The white paper also proposes the overhauling of planning rules so councils can plan to build more long-term homes for rent and encourage more stable, longer-term tenancies to be offered by landlords. In a marketplace where 60% of new homes are built by just ten companies, the white paper also outlines plans to break the dominance of some developers by using the £3bn home building fund to provide loans to small developers, custom builders and offsite construction with the aim of diversifying the market. 

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