The Prime Minister's speech today to close the Conservative Party Conference in Manchester contained significant announcements on housing policy, in particular introducing new proposals for more homes to be built to reignite home ownership in Britain.
Mrs May said that for the younger generation, the chances of getting onto the housing ladder has become a "distant dream", with just 38% of 25 to 34 year olds owning their own home today compared to 59% over a decade ago. She said her premiership will be dedicated to fixing Britain's broken housing market which was the title of the Government's White paper on Housing issued in February 2017. The PM confirmed that she would take personal responsibility to following through on the commitments made in the White Paper. However, whilst the Government is currently consulting on a standardised approach to assessing housing requirements outlined in the White Paper, we are still waiting for a number of proposals in White Paper to be firmed up. These include housing targets for local authorities and changes to the National Planning Policy Framework (NPPF). Mrs May hinted at an updated definition of affordable housing in the NPPF which was trailed in the White Paper to include new types of rented properties.
Mrs May backed plans to increase the number of new homes being built, partly by ensuring that local councils release more land for housing, and encouraging developers to build a large number of homes once they have the planning permission for them. She indicated that house builders "must do your duty to Britain and build the homes our country needs"
The PM acknowledged existing Government housing schemes such as "Help to Buy", but said these alone are not enough to provide homes for the next generation. To do so, she pledged:
- to help over 130,000 more families with the deposit they need to buy their own home by investing a further £10bn in "Help to Buy"
- an additional £2bn Government investment in the funding for affordable housing, increasing this to almost £9bn, with more funding for the parts of the country where the need is greatest
- to encourage local councils and housing associations to bid for this extra £2bn investment money. In the case of local authorities, this probably means that successful bids will result in their Housing Revenue Account debt caps being increased. But as grant rates will only cover a part of build costs authorities and associations will still have to find the balance from their own resources or by borrowing.
- a promise of certainty over future rent levels applicable for social and affordable rents . At the moment Registered Provider rents are generally subject to 1% reductions until 2020/21.
We can expect more detailed announcements from Government to follow on bidding for the extra £2bn and on future rent policies, as well as other possible relaxations on council house building.