Build, Build, Build!13/07/20
With the impact of COVID-19 and the lockdown period being felt across the country, Boris Johnson has put forward his ‘New Deal’ to boost the struggling UK economy and to address the ongoing issue of the UK’s housing shortage.
The ‘New Deal’ has been compared to F.D. Roosevelt’s famous New Deal of the 1930s, which among other things led to the reform of Wall Street. However, unlike Roosevelt’s New Deal which involved public spending equivalent to 40% of the US’ GDP, Boris is using money brought forward from the £600 billion already pledged by the Chancellor. We set out what this means for registered providers (RPs) below.
So what has the Government pledged?
Boris is proposing a number of measures to be introduced by September 2020 that will relax planning requirements and encourage further residential development, including:
- With a view to assisting the ailing high street, the introduction of greater flexibility for changes of use to commercial premises through reform of the Use Classes Order with the effect of allowing units to be repurposed with greater ease.
- Existing permitted development rights will be extended to allow change of use to residential from a wider range of commercial buildings.
- Normal planning applications will not be required for the demolition of vacant residential and commercial property if they are to be redeveloped as new homes.
- A new fast track process will be introduced (subject to neighbour consultation) for approval of applications for loft extensions by homeowners.
Although these reforms will undoubtedly make it easier to convert a wider range of buildings for residential use, certain buildings considered to be of particular importance to local communities will not be included in these changes. These include pubs, libraries, village shops and other businesses considered to be of high value to the local community.
Investment in house building
The government also intends to boost investment in house building in the following ways:
- By introducing a programme for the construction of up to 180,000 new affordable homes over the next 8 years, worth £12 billion including 1,500 first time buyer units intended to be sold at a 30% discount. The discount will subsist in perpetuity with a view to ensuring that these ‘First Homes’ continue to be affordable for subsequent generations.
- £400m of the Brownfield Land Fund have been allocated to various parts of the country including West Yorkshire, Liverpool City Region, Greater Manchester and North of Tyne and Tees Valley to support the building of 24,000 new homes.
- A Home Building Fund designed to assist smaller developers finance new developments will receive a further investment of £450 million to support the construction of 7,200 new homes.
It has also been announced that the government intends to set about a comprehensive reform of England’s planning system, the “most radical” since the introduction of the current planning system following the Second World War. The government will release a planning Policy Paper later this month.
The devil is in the detail, and it will be interesting to see what further proposals the government will make in its planning policy paper this month. It is clear however, that the government is honing in on the housing sector now more than ever in its endeavours to boost the economy. The above proposals could present some exciting new opportunities to those in the social housing sector.
How can Capsticks help?
Capsticks’ housing team provides a truly full-service, with particular expertise in development, corporate and securitisation, housing leasehold and asset management. We advise housing associations and local authorities on a range of matters including estate regeneration schemes, housing management and tenant engagement, commercial and financial issues, including disputes and governance advice.
If you have any queries around what's discussed in this article, and the impact on your organisation, please speak to Spencer Vella Sultana, Suzanne Smith, Chimi Shakohoxha, or any of your contacts at Capsticks, to find out more about how we can help.