Following the Chancellor's budget announcement, there are a number of areas that link back to the Real Estate sector. These include announcements on flood defence, SDLT and other planning issues.
Pay to stay
The governments consultation on pay to stay was published on 9th March. This confirmed the governments policy on the proposals to require social housing tenants with household incomes of 40,000 and above in London, and 30,000 and above in the rest of England, to be required to pay an increased level of rent for their accommodation if their rent is currently being subsidised below market rent levels. No changes were made in the budget, though it confirmed that a taper would be introduced so that rents rise only gradually for those over the thresholds.
Pay to stay will, as previously announced and as part of the governments deregulatory strategy, be voluntary for private registered providers.
Social rent reduction deferral for supported housing
As announced on 27 January, the 1% annual reduction in social rents announced at the Summer Budget will not apply to supported housing in 2016-17. It will now also be the case that the reduction in local housing allowance caps for homeless accommodation will also be deferred to 1st April 2017.
There was quite a big piece on homelessness. The Autumn Statement had announced changes to additional payments that local authorities and registered providers receive for managing properties let to homeless people. The 2016 budget announced four aspects:
- 100m of investment to deliver low-cost second stage accommodation for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges.
- 10 million of investment over two years to support and scale up innovative ways to prevent and reduce rough sleeping.
- A doubling of the funding for the Rough Sleeping Social Impact Bond announced at the Autumn Statement 2015 from 5 million to 10 million. The objective is to drive innovative ways of tackling entrenched rough sleeping, including Housing First approaches.
- Action to increase the number of rough sleeping EU migrants returning to their home countries.
There had been talk of extending the duties of local housing authorities with regard to homeless people, but this does not seem to have featured. The budget did not do anything for those unable to afford, or forced out of, private rented accommodation who present themselves as homeless. Local housing authorities will therefore have to look at other strategies for dealing with this issue.
Community Land Trusts
60m is to be provided from increased business rates and SDLT receipts to enable community-led housing developments in rural and coastal communities, including through Community Land Trusts, where the impact of second homes is particularly acute. The South West will receive around 20 million of this funding.
There was a vague proposal that the government is intending to explore ways to extend homeownership to social tenants who cannot afford to take advantage of existing schemes. No further detail was provided.
Regional growth funding (under which 8bn of funding has been allocated) is to be extended by up to 1.8 billion to be allocated through a further round of Growth Deals with Local Enterprise Partnerships later this year. Further detail on the allocations process for the next round of Growth Deals is to be announced soon.
A further 2 billion of the Local Growth Fund to being allocated through the Home Building Fund. This programme provides finance to developers to unlock large housing sites and bring forward the necessary infrastructure that large house building projects require.
Devolution deals which all allocate some funding for housing were announced with Greater Lincolnshire, East Anglia, and the West of England and further devolution deals with Greater Manchester and Liverpool City Regions
A prospectus has today been published to launch the Starter Homes Land Fund. This prospectus invites Local Authorities to access the 1.2 billion of funding to remediate brownfield land to deliver Starter Homes. Of course, the 1.2bn is to be funded by the levy on local housing authorities high value houses.
Help to buy shared ownership
Help to buy is to be extended to shared ownership and a prospectus inviting bids will be launched in April.
The delivery of 13,000 affordable homes will be achieved two years early by bringing forward 250 million of capital spending to 2017-18 and 2018-19.
Investment in low-cost homeownership
An interesting announcement is that the government states that it will explore options for encouraging private investment in low-cost homeownership, including the scope to use guarantees. No timetable is given for this or whether it is proposed to invest State resources into this policy. This is one to keep an eye on as it has the potential to compete with the activities of private registered providers.
Garden towns, cities, and villages
The government supports the construction of a new wave of garden towns and cities across the country, with the potential to deliver over 100,000 homes. The Budget announces that the government will legislate to make it easier for local authorities to work together to create new garden towns, as well as consult on a second wave of Compulsory Purchase Order (CPO) reforms with the objective of making the CPO process clearer, fairer and quicker.