Latest on government support for the housing market in England
The Prime Minister recently announced a series of proposed changes to the planning system in England, in order to make it ‘easier to build better homes where people want to live’ as well as support high street revival – which is much needed, given the way that retail and hospitality have suffered over the many months of lockdown.
The first of these measures is intended to tackle the issue of redundant buildings in town and city centres. As it currently stands, if someone wants to change the way premises are used – for example, by turning an office building into residential flats – they typically need to apply for planning permission. This is so that the local council can ensure there is the right mix of commercial and residential premises within an area.
Under the new rules, it will be easier to change the use of both buildings and land so that, where towns and cities are crying out for regeneration, it can happen more quickly. Not only should this kick-start the construction industry and speed up rebuilding, but it may also offer more opportunities for investors to purchase different types of vacant property and repurpose it.
The requirements to adhere to building regulations and meet high standards of accommodation will remain; it is simply the ‘red tape’ that is being removed in certain circumstances.
The key proposed changes:
- The Use Classes Order will be reformed so that certain changes of use will no longer require planning or local authority approval, e.g. a retail shop could be repurposed as a café. At the same time, certain types of use will be protected, e.g. libraries and village shops.
- Certain commercial buildings can be changed to residential use without the need for planning permission.
- Property owners will be able to access a fast-track approval process to extend upwards (subject to neighbour consultation), and potentially build up to two additional storeys.
- Builders are likely to be able to demolish vacant and redundant buildings and rebuild them as residential homes without the need for normal planning permission.
Mr Johnson also announced a package of financial aid measures to support home building across England. The most significant of these is a £12 billion affordable homes programme that will provide up to 180,000 new homes for sale and rent over the next eight years. This will include a pilot scheme of 1,500 so-called ‘First Homes’, which they intend to sell to first-time buyers at a 30% discount. The discount will be in place permanently, so that the properties remain affordable for future generations.
Further financial aid includes:
the allocation of £400m from the Brownfield Land Fund to support around 24,000 homes, primarily in the North of England
- a £450m boost to the Home Building Fund, which helps smaller developers access finance for new housing.
Is it all good news?
From a landlord and investor perspective, property development tends to be good news as it means increased infrastructure in the local area, which in turn can help boost population (which helps drive demand for housing) and that can lead to a growth in property prices.
Although the government doesn’t always make life easy for landlords, when it comes to creating more homes, it is definitely very supportive and for those wanting to buy and develop property to let, these government changes may well help to unlock opportunities previously unavailable or not viable.
The consultation closed on the 01 October 2020. Further details can be found by visiting the GOV.UK website.