Welcome but underwhelming: Prime resi industry reactions to the Housing White Paper

Proposals to get more homes built faster and to boost the private rented sector are good, but are they enough to "fix the broken housing market"?

While the devil – or perhaps his opposite number – will be in the detail, initial industry reactions to the government’s Housing White Paper can be summed up by Cushman & Wakefield’s Ian Anderson, who calls proposed planning measures “underwhelming”.

The consensus is still clearly positive – with arms open for much of the government’s thinking – but, perhaps because expectations were raised by all the delays and hyping of the document as some kind of policy landmark, it appears to have fallen short of many developers’ and agents’ hopes and dreams.



This White Paper is far from the radical overhaul of housing policy that has been promised

Edo Mapelli Mozzi, CEO of Banda Property

“This White Paper is far from the radical overhaul of housing policy that has been promised. The ‘use it or lose it’ rules designed to prevent developer land banking are too black and white and completely fail to consider other key factors preventing the building out of sites, such as finance.

“Banks in most cases will not fund the development of a scheme until 50% pre-sales have been secured. In an active market this isn’t a problem, but in a more challenging market such as the one we currently face, this is a major barrier to development. The idea that developers are just sitting on land waiting for prices to go up is ludicrous. If they can’t sell half the scheme in advance, they simply can’t build it. Where is the proposed legislation tackling this fundamental problem?

“While I support a more enlightened approach to the rental market and an end to the blinkered focus on home ownership, I’m concerned that here too the Government has not looked at the bigger picture. PRS has a huge role to play in providing housing, but the entire market needs to be healthy in order to deliver it at scale. Big urban regeneration schemes such as Nine Elms and Pan Peninsula would never have happened without funding from the top end of the market which is currently stifled by stamp duty escalation.

“However, I welcome a relaxation of regulation around space standards and development height that will give developers the freedom to meet consumer demand. For too long the overbearing bureaucracy of the planning system has forced developers to build cookie cutter schemes that fail to meet the needs of the local demographic. If a scheme is proposed in Croydon where there is strong demand from millennials who want smaller homes with shared facilities, then that’s exactly what should be built.”

Underwhelming

Ian Anderson, Partner, Planning and Development Consultancy, Cushman & Wakefield

Ministers had painted a picture of a landmark document, focused on fiscal and planning solutions that would provide the framework for housing policy for the foreseeable future. Initial review suggests that, whilst there is welcome move away from the ‘home ownership at all costs’ mantra towards a recognition that an increasing proportion of the population are likely to be forced into rent, a great many of the planning reforms which were trailed ahead of publication, including the potential to review previously sacrosanct Green Belt policy, haven’t made the final edit. The document as a whole seeks far greater political expediency with very much an eye to maintaining support in Tory heartlands and is underwhelming.

“From the planning perspective at least, the White Paper does little to add anything new to realistically speeding up the supply of housing.

“There should be a welcome for the recognition of the important contribution the rental sector makes to housing and the Government’s continued support for brownfield development, but the Paper offers nothing radical, and in some cases, seeks to impose or curtail present planning flexibility which may actually result in delays to the submission of planning applications and , in turn, a longer lead in time to development.”

Pleasing to see more commitment to housebuilding, and a positive shift to mixed tenure

Jennet Siebrits, Head of Residential Research at CBRE

“It is pleasing to see the government once again commit to driving housebuilding and increasing new homes supply in today’s Housing White Paper. It is particular positive to see a shift in policy that emphasises the importance of mixed tenure and the Private Rented Sector as a way of alleviating the chronic housing shortage.  

“Since the UK financial crisis, there are 1.5 million more people relying on the rental market in the UK, putting greater strain on current stock. The delivery of housing supply can be supported by the build to rent sector; bringing forward quality, affordable and flexible accommodation for this emerging market.

“The initiative to support funding for SME and custom-builders will help to diversify the market and drive housebuilding. Smaller developers must be encouraged by local authorities and, crucially, funding bodies, to continue operating in the mainstream housing sector, building schemes on smaller chunks of land that can be delivered faster than large, mixed use developments.”

It is worth remembering that the development market is just one part of the wider housing market that the Government calls ‘broken’

Justin Gaze, Knight Frank’s joint head of residential development

“The White Paper is a comprehensive report. It illustrates an understanding, which has been arguably a little lacking in some recent policy and legislation, that all parts of the development market are interdependent, and that they can, and will, affect each other and ultimately the number of homes being built.

“There are some positive suggestions within the White Paper, especially recognition that housing need must be realistically measured, across all age groups and tenures, a fundamental first step if the housing shortage is to be addressed.

“A review of the Community Infrastructure Levy (CIL) is also welcome, as this system has become a burden on development, instead of streamlining payment for infrastructure as it was intended.

“The importance of development in established and sustainable locations already well-served by infrastructure where there is a high housing need shouldn’t be overlooked.  But the fundamental tension between the need for new homes and the resistance to development seen in some communities is unlikely to be completely unravelled by the suggestions in this report.

“A continuing concern is the cost of planning, which could be seen to be impacting the country’s SME builders and adding further delays to development sites being brought forward.

“While we await the outcome of the consultation to the White Paper, it is worth remembering that the development market is just one part of the wider housing market that the Government calls ‘broken’. The pressure on the delivery of new homes, which make up less than 1% of housing stock annually, is emphasised in a market where the availability of second-hand stock to buy is so constrained, a trend which is exacerbated by the current stamp duty regime.”

There are still a lot of questions to be answered, but in many respects, the right questions are being asked

Grainne Gilmore, Head of UK Residential Research at Knight Frank

“Policymakers have recognised that there needs to be support in the housing market for those of all ages in all tenures. Knight Frank has been calling for local plans to account for housing need by age, so it is most welcome to see this being put forward in the White Paper. This will help to focus attention on the shortage of retirement housing. A step-up in the delivery of well-designed homes for older people could free up more family housing and help unglue the second-hand housing market.

“The support for the Build-to-Rent sector and Affordable Rented sector is also welcome – focusing exclusively on one form of tenure in the housing market can be unproductive.

“Also refreshing was the Government’s clear admission that after several years of heavy focus on Starter Homes, with announcements and re-announcements which contained little policy detail, it has decided to do a partial volte-face and spread its focus to include all forms of Affordable Housing. This has left no room for doubt, and means developers and planning authorities can now progress with more clarity.

“In essence, this document is a consultation – so there are still a lot of questions to be answered. But in many respects, the right questions are being asked.”

There is a fine balance to be found between protecting the countryside and building enough new homes

Jon Jennings, Director at Cheffins

“Today’s Housing White Paper is yet again an effort from the Government to increase productivity for housebuilders and try and speed up the planning process. There is a fine balance to be found here and we must ensure that our countryside is protected from inappropriate development whilst still providing enough new homes built to meet the UK’s chronic levels of demand.

“Measures to protect the green belt whilst still delivering on the forecasted one million new homes by 2020 do seem to be at odds with one another and it will be interesting to see how this develops over the coming months. The councils now need to play a pivotal role in increasing output and delivery in a sustainable manner and by announcing that councils can take land out of the green belt in only ‘exceptional circumstances’ once again brings the responsibility of delivery to each of the UK’s individual Districts. Measures to decrease land-banking should also play a positive role in increasing the numbers of new homes built and we should certainly see an increase in available land once these restrictions on developers are put into practice. However, this should be accompanied by an increase in the decision making process and discharge of conditions.

“Neighbourhood plans have also come under fire and the announcement that these should be revised to ensure that plans meet their fair share of local housing need and delivery across a wider local area can only be a positive. This is certainly something which strikes a chord with those living in our region where the development of Local Plans have been particularly slow-moving. As one of the areas with the largest disparity between demand and supply, the Greater Cambridge region really does need to be helped to deliver on housing and infrastructure, and anything which could help speed up the process is essential. A cautious approach should be taken to increasing housing densities as increased quantity does not necessarily mean quality. There is a need for increases in housing across all sectors of the housing market and the planning system needs to provide enough flexibility to allow this to happen.

“The use of a consistent formula to calculate housing demand is welcomed and will allow a transparent and true assessment of housing demand to be made rather than the current scenario where figures are manipulated to meet the views of elected members.

“Proposals to increase planning fees should only be allowed if they result in a real improvement in the delivery of planning permissions and are ‘ring fenced’ to planning departments.

“The confirmation that an increase in public sector land will be made available will help government reach its targets for housing. There are acres of under-used public sector space across the UK and these have the potential to provide huge amounts of space in viable locations for development. The government needs to bear in mind that this is not just about delivering numbers of houses to match their forecasts, rather this is about providing homes where people will actually want to live. Brownfield sites in the centre of towns will generally provide this although there will still be demand in rural locations for new homes.”

Some welcome moves that shows the Government is listening to the industry

Faraz Baber, Director at Terence O’Rourke

“The Housing White Paper is the latest in a spate of policy changes and proposals, most of which are yet to be formalised or implemented.

“To really start to tackle the housing crisis, what the housebuilding industry really needs is certainty. Hopefully a centralised policy will do this, although there are already question marks over how some of the proposed changes will work alongside the guidance already set out by Sadiq Khan for London. On first look the white paper appears to be strongly geared towards delivery across different markets, let’s hope the reality allows for this to happen.

“Theresa May’s Government, surprisingly, restated the original pledge of delivering one million new homes by 2020 and this target is getting harder to achieve as emerging policies are delayed and argued over. Some of the proposals seem more suited to a Green Paper than a White Paper, which means there is also a danger that further consultation and legislation will be required on the back of these latest reforms.

“As an industry we need certainty because constant changes to policy restricts long term planning, especially on major regeneration projects that have staggered delivery over the course of 10, 15 and 20 years.

“A focus on local plans to identify housing capacity and opportunities; wider housing tenures beyond home ownership and starter homes; and reviewing the Community Infrastructure Levy (CIL) are welcome moves that shows the Government is listening to the industry. Now we need the bedding down time we all want that will let us get on with delivery.”

Should empower SMEs to have the confidence to do something different

Greg Hill, Deputy Managing Director at Hill

“The Housing White Paper should empower SMEs to have the confidence to do something different, as innovation can be highly challenging in a restricted and confined sector. With the right support and by prioritising sensitive design, working in partnership and engaging with key stakeholders, SMEs will be able to flourish. As an established medium-sized housebuilder we have proved that it can be done, as demonstrated by The Avenue.

“SMEs are in the perfect position to step away from convention and embrace new designs and methods of construction due to their flexibility. We have the opportunity to engender greater collaboration and bridge the gap between housebuilders, local communities and local authorities. This will in turn allow us as an industry to build the homes which people not only need but will also love.”

A lacklustre announcement

Naomi Heaton, CEO of London Central Portfolio

“Today the Government published their long-anticipated housing white paper, entitled ‘fixing our broken housing market’. Delayed twice, Sajid Javid’s lacklustre announcement, and accompanying 104 page document, was an underwhelming response. Reiterating the grave problems facing the housing market, about which we are all too familiar, there was a distinct absence of any detailed implementation program.

“Having lobbied the Government on the inadequate supply of rental property, which became a scapegoat under George Osborne’s tenure, LCP welcomed the sentiment in today’s paper to assist families within the Private Rented Sector as well as those wishing to buy their own homes.  At last the Government has woken up to the fact that not everyone aspires to homeownership, with an increasingly mobile workforce and a generational change in lifestyle.

“For the first time, the Government announced a relaxing of restrictions in their Affordable Homes Programme to include affordable rental property. They also, once again, propose to consult on longer tenancies on new build rental homes.

“However, very little detail was included as to how these policies will be executed or enforced. These announcements simply do not go far enough to tackle the growing lack of PRS supply with a 1.8m shortfall anticipated by 2025, according to RICS. More information on the ban on letting agent’s fees was also absent, which now is to be subject to consultation.

“For developers, with an announcement of an increase up to 40% in planning fees, the commercial nature of the industry is once again being overlooked, as is their crucial role in providing affordable housing. This is particularly worrying at a time when anecdotal evidence suggests a rapid slowing of building starts as buyer demand falls for more expensive homes due to the high levels of graduated Stamp Duty and the introduction of the Additional Rate. Whilst further investment into planning departments is welcome, developers also require support if they are to help deliver on Government building objectives.

“With only 163,940 housing completions in England in 2015-16, the Government is a long way off the target of providing 1m new homes by 2020, promised by David Cameron. Not only do we have a housing crisis to meet right now, there is projected to be an additional 1.8m new households created by the end of this Parliament. Currently, the Government is not even standing still.

“On the whole, the much-hyped Housing White paper appears to do very little to ‘fix our broken housing market’.”

Good intentions, but we need to see actions rather than words

Adam Phelps, Head of Land and New Homes at Humberts

“The intentions within the Whitepaper stem from a good place but the threat is that they’ve been tinged with positive political spin. The role of the SME housebuilder is vital to the delivery of the government’s housing target and supporting and encouraging this sector will be the make or break factor with delivery. Cutting planning red tape for example is an excellent idea as is freeing public land for house building. We need to see actions rather than words to ensure the government hit their housing targets.”

It is vital that as the quantity increases, the quality of new homes doesn’t suffer

David Thomas, CEO of Barratt Developments PLC

“We welcome the continued government focus on tackling the housing shortage and we’ll support any policies aimed at speeding up the planning system and bringing forward more land for new homes – particularly in areas of high demand.

“Housebuilders have an important role to play in building the homes the country needs and over the last five years Barratt has increased the number of homes it has built by more than 55%. But it is also vital that as the quantity increases, the quality of new homes doesn’t suffer.”

Commendable… but a real lack of ambition

Russell Quirk, CEO of eMoov

“As always, commendable that the Government should look to again address the housing crisis, but there is an all too familiar theme of ‘close but no cigar’ where today’s announcements are concerned and a real lack of ambition. Although this paper will be cautiously welcomed, much of what Mr Javid announced today was nothing but recycle rhetoric and statistics from previous announcements, and as always, the Devil will be in the doing.

Rather than make any real steps towards a solution, today’s changes seem to only trim the fat from a system that is fundamentally broken.

Welcome news for renters

Patrick Littlemore, Director of Lettings at Marsh & Parsons

“Extra protections and safeguards set out in the White Paper are welcome news for renters, especially those who’ve experienced dishonest landlords, but it is important to note this works both ways. Legitimate landlords must also have protection against rogue tenants, retaining the right to lawfully evict and any restrictions on this could spell disaster. Three year family tenancy agreements are a good move to provide greater security and stability for renters that want it, so long as the tenant abides by the Housing Act.

“The Government should make sure that measures announced do not dent enthusiasm in the private rental sector among landlords. The buy-to-let sector took a substantial hit with the increase of stamp duty in April last year and additional burdens could make this un-attractive, reducing investment and the supply of stock in the much needed Private Rental Sector. Greater stock levels are required to meet the ever-growing demand we’re witnessing and discouraging investment would have huge ramifications for the many young professionals that rely on renting.

“Renting gets a bad name but in reality, many appreciate the flexibility, freedom and choice that comes with it.”

It seems that now we have a listening Government

Jeremy Blackburn, Head of UK Policy at the RICS

“For the first time this century, Government has shifted the rhetoric away from home ownership. Past governments have been too slow to realise that if we are to create productive cities powered by a readily available workforce, we need to house all members of society, not just the fortunate few.

“The Private Rented Sector (PRS) became a scapegoat under the previous Prime Minister and because of that it suffered. We warned the Housing Minister that unless urgent action was taken there would be a 1.8 million shortfall of rental homes by 2025.

“It seems that now we have a listening Government, with a Prime Minister and Cabinet who are willing to heed the advice of industry and take the action needed to solve Britain’s housing crisis.

“With increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. The number of UK households renting property doubled from 2.3 million in 2001 to 5.4 million in 2014. Yet the previous Prime Minister took measures to dampen the demand for buy-to-let investments by introducing taxation policies that unfairly penalised landlords.

“This further reduced supply, arguably makes a 2025 rental supply crisis more likely.

“While the focus on build-to-rent looks set to overcome many of the shortfalls of previous administrations, the housing crisis will not be solved by building new homes alone — we must make use of our existing properties. We have repeatedly told Government that encouraging Britain’s ageing population to downsize could be the key to unlocking 2.6 million homes. Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice. Almost a third of over 55s have considered downsizing in the last five years; yet we know that only seven percent actually did.

“Grit and determination will be needed to tackle the critical housing deficit that we have built up over decades.

“Time and time again, we are being told that planning delays are the greatest barrier to the delivery of new homes. There is a dire shortage of staff within planning departments and this is causing projects to be delayed by years. We want to see local councils pooling resources to create planning flying squads — crack teams of planners who will be drafted in to support ailing authorities and break down one of our biggest planning barriers.

“The public sector must also start to release land quicker and on greater scale. For all the good intentions, too little has been done to date. We are talking about hundreds of acres of publically-owned land that is currently wasted — that’s just not good enough.

“And we must unleash the potential of councils and housing associations to encourage them to invest in new house-building schemes, even if that jars with political ideology, because they are the best fit deliverers of affordable housing.

“It is through a combination of all these factors that we have the potential to create a housing market that is genuinely fair and affordable for all.”

The disconnect between Westminster and local government must be addressed

John McLarty, Partner and Head of Planning at Strutt & Parker

“We are encouraged by the Government’s agenda to shake-up the planning system and deliver more homes. However this white paper must also address the disconnect between Westminster and local government, where we continue to see obstacles to the delivery of much needed homes. The ability for local government to have a real, active role or a more top down approach could be a real game changer for the Green Belt.”

Underwhelming and disappointing

Conrad Payne, Partner at Strutt & Parker National Development & Planning

“After such a long delay, a lot of hope and anticipation had built up surrounding this housing white paper and what it would say. Frankly, the result is underwhelming and disappointing. There is a lack of understanding about the planning system from the Government which means the issues at the heart of the house building crisis have not been addressed. Without a proper planning system in place, none of these new measures will work in the way they are intended to. It’s very frustrating.

“The key issue which is delaying homes being built in the UK is the long process which house builders must go through after outline planning consent has been granted, before a spade can even go in the ground. Reducing the timescales for commencement of development on schemes with outline consent, from 3 to 2 years, is actually going to slow the process down rather than speed it up. Gaining ‘Reserved Matters’ planning consent can take between 6 to 18 months, and local authority planning schemes can’t cope with this at the moment as they are so under resourced. So reducing the process to a shorter timescale is not realistic without significant investments into our planning departments. Heavy investment into physical ‘bums on seats’ in our local authorities is required, alongside proper training of planning councillors.

“The increase in planning application fees by 20% will go towards investing in planning teams, but I fear it will not be enough and far more serious investment is needed.

“Another thing which is currently causing huge delays is the signing of section 106 agreements which relate to the infrastructure that developers are contracted to provide when building a new scheme, such as roads, schools and public art. It is a public misnomer that this is due to developers negotiating hard and delaying the process, it is often due to conflicts between local planning authorities and county councils. The white paper doesn’t address this and misses a crucial point. Land banking is not something developers want to do – it fundamentally goes against their business model, they don’t want schemes to be delayed, they want to get on site as quickly as possible, build houses and then sell them.

“On the plus side, the announcement about modular housing is welcome and this type of building certainly has its place and will help supply in some areas.”

The White Paper’s commitment to continuing to drive up safety and standards in lettings is positive

Lucy Morton, Head of Agency at JLL

“We have long campaigned for greater regulation and transparency in the lettings industry, so the Housing White Paper’s commitment to continuing to drive up safety and standards is positive and wholly supported by JLL.

“Additionally, encouraging institutional investment into the Private Rented Sector is a welcome measure; there is increasing demand from people who want the flexibility of renting or who see it as a long term prospect, and they should have the option to live securely in high-quality developments. Designated Build to Rent schemes that permit long term and professionally managed tenancies are one way to address this. Interestingly, though, when it comes to long term tenancies, our average tenancy has increased to beyond three years and often, it is the landlord who will commit to a longer term and it is the tenant who wants the flexibility of a break clause after six months.

“When it comes to lettings fees, at JLL we have always advocated complete transparency of all charges made by agents to both landlords and tenants. We have also historically campaigned for the Government to regulate letting agents which it still fails to address.”

May fall short in that it places only limited emphasis on the need for additional capacity in the house-building industry

Simon Rawlinson, Head of Strategic Research at Arcadis

“The Government clearly flagged the housing market as being part of broken Britain, identifying that housing has become a fundamental barrier to social progress.  The solution is to build more homes, and the key questions is whether the range of measures highlighted in the White Paper, from investment in additional planning capacity to an investment framework for institutions are sufficient in themselves to drive a 30% increase in housing output from current levels.

“The White paper makes it clear that housing has a place in the industrial strategy – focused on productivity, sustainability and skills.  The character of the industrial strategy – two-way deals between government and residents, local authorities and RSLs to name but three, highlights that the success or failure of the strategy depends on all of these complex pieces coming together to create sustained investment in capacity.

“Capacity is a key issue for the industry, particularly on the supply side. One area where the Housing Strategy may fall short is that it places only limited emphasis on the need for additional capacity in the house-building industry – whether volume builder, SME or contractor. The words are there, but the link between long-term sustainable demand and a sustainable, investable industry is not.

“The range of questions that the consultation seeks to address are complex and go to the heart of what it means to plan and manage communities. The relative silence in the consultation on what is needed to create capacity within the industry suggests that there are some aspects of failure that government is more prepared to address than others.”

A 10% minimum affordable home ownership requirement on new schemes will continue to push the home ownership agenda

Suzanne Benson, Real Estate Partner at Trowers & Hamlins

“Although Government has widened its approach to the overall delivery of affordable housing, the proposal to retain a minimum of a 10% affordable home ownership requirement on new schemes will continue to push the home ownership agenda. The mix of homeownership products will however be an interesting question for individual local authorities as they seek to balance there being no minimum requirement for Starter Homes with a general duty to promote their supply. The removal of the 20% mandatory requirement for Starter Homes across new schemes will be welcome news for those wishing to offer more established products, including shared ownership.”

Will improve confidence in Build to Rent proposals

Andy Barnard, Partner at Trowers & Hamlins

“It’s encouraging to see the Government has now not only moved well away from a focus purely on home ownership in general, but specifically to see a specific consultation which could make a serious difference to the Build to Rent market.  The proposal to change the NPPF will encourage planning authorities all around the country to properly include Build to Rent into their plans.  We all know that Build to Rent doesn’t work everywhere, but knowing the planning authority is behind it will improve confidence to bring forward opportunities where it does.”

While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking

Richard Snook, Senior Economist at PwC

“Over the last two years we have highlighted the plight of ‘generation rent’, those in the 20-39 age bracket at risk of being locked out of the housing market due to high prices, high deposits and rising interest rates.

“Home ownership rates for younger adults have been falling sharply, we estimate that by 2025​,​ 59% of 20-39 year olds will be renting privately, up from 45% in 2013. Only 26% of those in generation rent will own their own home by 2025, down from 38% in 2013.

“Today’s White Paper Fixing our broken housing market seeks to help generation rent and other participants in the property market by improving affordability for those seeking to buy, while also helping to improve the rental market.

“While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking. There appears to be no major new initiatives on tax, the greenbelt or enabling Local Authorities to borrow to build.

“Demand for housing in the UK has outstripped supply for more than two decades and we have been calling for measures to promote housing supply. We welcome the measures in the White Paper which may lead to a smoother planning system and promote increased building over the coming years.”

Download the full Housing White Paper here