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Housing White Paper PDF
Housing White Paper PDF
UK Residential
Policy Response
Housing White Paper 2017
The long-awaited proposals set out to deliver a higher number of homes through
a co-ordinated approach that tightens up the planning system and requires local
authorities and developers to do more.
supply will only meet need if up-to-date local start. A standardised approach to objectively
savills.co.uk/research 01
Policy Response | Housing White Paper 2017
The steep rise in the value of to accelerate construction and provide The document stopped short of
residential property has made housing support for a wider range of tenures. making radical changes to the
inaccessible to many, holding back Green Belt with a reiteration of the
economic productivity. This has been Many of the measures are to be the Conservative Manifesto commitment
partly driven by a chronic undersupply subject of further consultation, partly to protect it. The White Paper does
of new homes. The Housing White giving this White Paper the appearance however provide a clear process for
Paper, launched in February, seeks to of a Green Paper in terms of the a local authority that wishes to review
tackle this housing shortage, clearing level to which policy still remains to the extent of the planning constraint,
one of the barriers to the UK realising be defined. The success of the new if it can demonstrate there is
its economic potential. policies will depend largely on the not enough land within the urban
detail of how they are implemented, area or other appropriate locations
Its 104 pages offer no quick fix as set out in this paper. for development.
solutions prompting criticism that
it stops short of the ‘radical vision’ Support for development These are the principles on which the
For other
promised by Sajid Javid. What The planning policy framework in the Minister for Planning endorsed the
related Savills
the White Paper lacks in terms White Paper is supportive of higher Green Belt review in the Birmingham publications,
of headline-grabbing, it seeks to levels of development by aiming Plan, which released land for 6,000 new please go to
make up for with a more pragmatic to simplify and speed up planning. homes. In addition, proposals allow for the website,
approach that tackles the housing Government will also be exploring development on brownfield sites in the savills.co.uk
crisis on multiple fronts, from planning a new approach to developers' Green Belt where it contributes to the
through to construction. contribution to infrastructure, delivery of Starter Homes.
expecting more efficient land
The Housing White Paper is not a use through higher densities and
manifesto for revolution but a detailed reviewing space standards. In terms
blueprint for evolution. Wide-ranging of developer contributions, this “The Housing White Paper is not
measures place greater responsibility includes both reform of Community
on local authorities to adopt up-to-date Infrastructure Levy (CIL) and an a manifesto for revolution but a
plans that meet housing requirements,
increase pressure on house builders
attempt to standardise an ‘open book’
approach to Section 106 agreements.
detailed blueprint for evolution”
savills.co.uk/research 02
Policy Response | Housing White Paper 2017
Steps were also taken to align suggested a figure of 312,000 it could add up to national need of
development and transport, with homes per year is required in order around 300,000 homes a year.
emphasis on building around new to deal with the backlog from recent
strategic infrastructure. Specific under-delivery. But planning for more homes in
reference is made to the role of the the right places is a key issue. As
National Infrastructure Commission A truly ‘honest assessment of proposed, the locations where the
including its interim report on the need for new homes’ by each local imbalance between supply and
Cambridge-Oxford Corridor, which authority would therefore have to demand is most acute would not
identified the potential for significant add up to at least 300,000 in order to necessarily see the highest uplifts.
levels of new homes and jobs. really address the housing shortfall.
The suggested method for accounting
Housing assessments However, currently inconsistent and for market signals puts Kensington &
must reflect true need selective assessment methods have Chelsea in the same affordability band
To deliver these overarching aims led to wildly different results and an as Boston in Lincolnshire. We have
the White Paper sets out a series overall shortfall in assessed housing devised a simpler system with more
of mechanisms, starting with the need of 86,400 homes a year. bands and higher maximum uplifts,
building blocks of planning. Under which arrives at a similar national total
the proposals, councils must provide Our analysis of the 285 local but focusses more on extra homes in
up-to-date local plans based on an authorities with up-to-date housing the most unaffordable markets.
‘honest assessment of the need for needs assessments, suggests
new homes’, with reference to a more that their numbers would add the It will be important that the
standardised assessment of need. equivalent of 1.1% of their existing standardised method is a starting
This is long overdue. housing stock a year. If we apply this point, allowing authorities to plan for
increase across all 326 authorities higher job growth and the homes that
Academic estimates of housing in England, total housing need those workers will need.
need tend to be significantly higher would add up to 213,600 homes per
than the trend-based household annum, 25% less than the 300,000
projections. The 2014 update of the
Barker Review suggested 320,000
that we really need.
“Councils must provide
market homes per year would The standardised method up-to-date local plans based
be needed to keep house price
growth in line with the Europe-wide
for assessing housing need
recommended by the Local Plans on an honest assessment of
average. Christine Whitehead and
Neil McDonald’s work for the TCPA
Expert Group is a step towards fixing
these issues, and we estimate that
the need for homes”
300K
new homes
needed in England
each year
savills.co.uk/research 03
Policy Response | Housing White Paper 2017
Local Plans must Plan in place and a post-NPPF enough to ensure others make up
meet housing need SHMA, housing targets fall 16% that shortfall. The White Paper seeks
Housing supply will meet need below objectively assessed need. to strengthen the NPPF by requiring
only if Local Plan targets add up to The biggest gaps are in Broxtowe, authorities to demonstrate a clear
assessed need across an economic Gosport, Hertsmere, Nottingham strategy to maximise the use of
area. This has not been the case to and Watford. The effect of the target suitable land, to meet the needs of
date. Figure 1 highlights the local shortfall and the need shortfall is the area as well as any needs that
authorities with recent plans where that we are planning for 37% fewer genuinely cannot be met within
the target falls short of the objectively homes than needed. neighbouring authorities.
assessed need. It also shows that
some of the authorities in areas of Some authorities do not have the This will take time to work through
greatest need lack a Plan. developable land to meet need and the system as all Local Plans are
have to rely on other authorities to finally put in place and existing Local
Across the 123 authorities with both make up the shortfall. But the Duty Plans are renewed over what is now
a post-NPPF Local (or Strategic) to Co-operate has not been strong to be a five-year cycle.
FIGURE 1
Housing targets fail to match objectively assessed housing need
KEY
n Target is 105% of OAN or higher
n Target is within 5% of OAN
n Target is 75%-95% of OAN
n Target is 75% of OAN or lower
n No post NPPF Local Plan
n No post NPPF SHMA
savills.co.uk/research 04
Policy Response | Housing White Paper 2017
5%
yet to start
22% 22%
preparing or
13%
have submitted
38%
collecting have an NPPF
preparing have published plans for
evidence compliant plan
a plan a draft plan examination
FIGURE 2
Cross boundary
collaboration is Five-year land supply: we need more land for housing
is a step forward
The real answer here is more
strategic planning across
economic areas, so it is heartening
that the White Paper offers more
support for collaboration across
local authority boundaries.
savills.co.uk/research 05
Policy Response | Housing White Paper 2017
five years and a further 61 (21%) Higher expectations Housing associations (HAs) are also
have had their five-year land supply of developers expected to build a wider range of
disproved at appeal. By triggering the Private developers are expected tenure through an expanded and more
“presumption in favour of sustainable to speed up delivery, engage with flexible Affordable Homes Programme
development”, the lack of five-year communities and invest in their worth £7.1billion.
land supply effectively diminishes skills base. Planning permissions
authorities control over where new will be much more focussed on build Our analysis suggests that housing
housing is built. out speed. associations have the financial
capacity to more than double their
To counter this, is a proposal to We see here the seeds of a new output and bring forward 44,000 extra
give local authorities the opportunity approach to planning, whereby the new homes per year by 2029 through
to have their housing land supply speed of build out is a factor to additional asset-backed borrowing.
agreed on an “annual basis” and be considered in land promotion,
fixed for a one-year period. acquisition and the likelihood of Some form of subsidy is critical to
achieving a planning consent. This deliver these homes across a range
Authorities wishing to take advantage in turn has implications for the of tenures and to include affordable
of this policy will need to provide associated land value. housing. In the absence of grant or
for a 10% buffer on their five-year low land value, HAs would deliver less
land supply. Fast delivery models such as Build housing overall and lower proportions
to Rent should flourish in this of affordable housing.
In the interests of transparency, environment. The challenge will be
guidance will set out more detail on to make this systemic change It is essential to create certainty over
how five-year land supply should be without imposing build out rate the rent policy for social landlords
calculated. conditions and penalties that make beyond 2020, for this development
development funding impossible. capacity to be unlocked.
Delivery tested against
targets that meet need Timing and pace of delivery
Councils will be held to account will be monitored against Plan targets.
through a new ‘housing delivery There are proposals to require larger
test’ which will highlight whether housebuilders to publish data on
housebuilding is meeting housing build out rates and to reduce the time
requirements and from November required for builders to start work once “Innovation & modern methods
2018 automatically apply “the
presumption in favour of sustainable
a permission is granted from three
to two years. Where no progress has
of construction are being
development” if delivery falls below been made and there is no prospect encouraged in a drive to support
25% of housing requirement.
The threshold rises to 65% from
of completion, there is a proposal to
withdraw planning permission for the a wider range of developers”
November 2020. remainder of the site.
By this point, if all goes according to The Government expects the HCA
plan, more local authorities should be to lead the way on faster delivery via
working with an “honest assessment” its Accelerated Construction Scheme
of housing need which should be on public sector land, aiming to build
higher than many of the numbers out at twice the normal rate via joint
currently in place. venture arrangements.
savills.co.uk/research 06
Policy Response | Housing White Paper 2017
Support for a wider Potential of Build to Rent. It shows market rent is a sensible option
range of tenures that if pro-active planning for BTR is where schemes are seeking to
There is a greater focus on delivering aimed at large sites, it will accelerate incorporate the affordable units
mixed types of accommodation, housing supply by as much as three- within the same block. Combining
including homes for rent. Gone is the fold, without displacing homes built for market and discounted units into a
previous government’s ambition to other tenures. single development under common
deliver 400,000 affordable new homes control helps to provide efficiencies
focussed on home ownership during Build to Rent to deliver in terms of design, density,
this Parliament. Instead there is an more homes construction and management.
expectation that 200,000 people will First off, the White Paper rightly
be helped onto the housing ladder by a identifies that BTR needs a clear These efficiencies improve financial
range of schemes such as Help to Buy, definition in the NPPF. Defining BTR viability, provide the potential to
shared ownership and starter homes. in planning terms would then enable deliver more affordable units and help
policymakers to address proposals to create mixed and well-integrated
The previous target to deliver around the delivery of affordable communities by pepper-potting units.
200,000 starter homes has private rent, covenants and
disappeared and rules have changed clawbacks, and variations in terms Longer term, family-friendly
to restrict eligibility. First-time buyers of design and space standards that tenancies make a lot of sense to
will be required to have a mortgage are more suited to rented housing. long-term investors. Evidence shows
and subject to the same £80,000 that the average tenancy length for a
(£90,000 for London) household In terms of boosting overall professional landlord is three years
income cap as those accessing housing supply, measures to place with many more starting to offer
shared ownership schemes. Buyers more emphasis on BTR through longer tenancies. The consultation
will also have to repay some or all of planning policy would have the will no doubt pick up that tenancies
the 20% discount if the home is sold biggest impact. that extend beyond three years may
within the first 15 years of ownership. run in to problems around taxation,
Our report for the BPF identified legal issues or potential of breaching
Developers will no longer have to that if local authorities were to show landlords’ loan covenants.
deliver 20% of schemes as starter preference for build to rent on large
homes, which would have been sites, this could see 10,000 units
detrimental to other forms of affordable unlocked every year to 2030. Add
housing. But there will be a policy current annual delivery rates to this
expectation that housing sites will
include a minimum 10% of homes for
and the sector could see delivery
increase to 15,000 home per year
“There is a greater focus on
affordable home ownership. which would have a very real impact delivering mixed types of
on housing supply.
Separate consultation accommodation, including
on Build to Rent
There is enough institutional
Switching traditional forms of
affordable housing to discounted
homes for rent”
capital pointing at Build to Rent for
it to reach the £60bn size of the US
Multi-Family sector. This could add
15,000 homes to housing supply
every year until 2030, but some
breathing space is needed for the
sector to reach this potential.
savills.co.uk/research 07
Policy Response | Housing White Paper 2017
✓ requiring local authorities to prepare Statements of ✓giving local authorities the opportunity to agree housing
Common Ground on working together to address housing land supply on an annual basis
requirements
✓encouraging local authorities to consider how likely
✓allowing Spatial Development Strategies to allocate a site is to be developed when deciding whether to grant
strategic sites for housing planning permission
✓allowing the Secretary of State to direct a group of ✓encouraging local authorities to shorten the
authorities to produce a joint plan timescales for implementing planning permission
✓amending the test for a ‘sound plan’ ✓requiring local authorities to plan
to one of producing ‘an’ appropriate strategy rather than for rented property where there is need
‘the most’ appropriate strategy
✓defining when it is appropriate for local authorities to
✓requiring local authorities to address the housing amend Green Belt boundaries
requirements of groups with particular needs such as the
elderly ✓encouraging a more proactive approach to bringing
forward new settlements in their plans
✓attaching great weight to the re-use
of suitable brownfield sites for housing ✓amending the definition of affordable housing, including
provision for Starter Homes, and ensuring that a minimum
✓expecting local and neighbourhood plans to define of 10% of all homes on a site are affordable
design expectations for new homes
✓clarifying the status of endorsed recommendations
✓confirming the potential to build of the National Infrastructure Commission.
higher-density housing around train stations and other public
transport nodes;
Annex A of the White Paper provides further detail on these measures for which consultation responses are invited by the deadline of
2nd May 2017.
savills.co.uk/research 08
Policy Response | Housing White Paper 2017
Will it work? Some changes could run counter to control also risk delay. Ensuring
The paper’s greatest strength is its the general objective of speeding up that delays are minimised requires
multi-pronged coherent approach. the process and promoting greater adequate resource is in place
It will instigate faster construction levels of delivery. within councils.
by focusing planning consents on
build out rates. Potentially, introducing guidelines The additional funding to be secured
on design through local and from enhanced planning fees may at
It will amend the National Planning neighbourhood plans will give rise to least in part help to address current
Policy Framework to streamline the additional controls on development resource shortfalls.
approach to plan-making with the aim and delays.
of delivering suitable land more quickly None of this will happen overnight.
and where demand is greatest. The additional tasks to be It quietly takes us in the right
undertaken by authorities both direction, rather than delivering a
It will target development around in plan-making and development shouting game changer. n
new strategic infrastructure and
drive local authorities to look
beyond municipal boundaries to
deliver joined up thinking to address
strategic issues.
“The paper's greatest strength is its
There is also a focus on assisting multi-pronged coherent approach. It will
smaller developers to participate
in delivery by guaranteeing a supply instigate faster construction by focusing
of sites at a scale to suit them
particularly.
planning consents on build out rates”
Savills Contacts
Please contact us for further information
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semmett@savills.com jward@savills.com jdaly@savills.com cbuckle@savills.com ngregori@savills.com
Richard Rees Robert Grundy David Jackson Jonathan Steele Andrew Brentnall
Head of Head of Housing Head of Planning Head of Residential
Development Services 020 7409 5995 020 7420 6371 Housing Planning Capital Markets
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