The Housing and Planning Bill - What does the future hold?
Thursday, 17th March 2016
Those who work in the field of social housing are used to having their day to day working lives being altered by legislative changes that happen every few years. It keeps us on our toes. However, the changes that occur are usually restricted to a specific areas within the sector. Housing managers, for example, are used to the tools to tackle ASB changing seemingly every 5 minutes. By and large, changes over recent years have been ''tinkering around the edges.''
The Housing and Planning Bill is different. The legislation forms the foundation of the Conservative Government’s vision for 2020 and is set to become one of the most significant sets of housing and planning reforms in recent years. The high-profile nature of the reforms proposed are such that (since its first reading in the Commons in October 2015) the Bill has become changed in shape and direction, becoming a football on the political playing field. As such, it is difficult as of today to say exactly what the Act will look like once the political wrangling has finished. We can however highlight the broad areas where change seems likely in the housing sector.
Increasing home ownership
The Government have made no secret of their desire to increase home ownership. The Bill supports this by promoting the development of Starter Homes, which will be available to qualifying first-time-buyers at a discount of at least 20% below market value. To ensure there are Starter Homes for buyers to purchase, Councils will have a specific duty to promote the supply of Starter Homes and factor these in when preparing local plans. Further, at present the Bill provides that Councils should only be granting planning permission for residential developments of a specified description if the Starter Homes requirement is met.
Home ownership is also being pushed through the much-publicised extension of the right to buy. The Bill provides for housing association tenants to have the same ability as Council tenants to purchase their home at a discount. Housing associations will be required to replenish their stock - the money for this will be made available from local authorities selling off their highest value homes. However, this is a controversial aspect of the Bill and aspects have already been watered down after opposition - it will be interesting to see how the Act will ultimately be formulated.
Ensuring existing social housing is a ''springboard''
Just as increasing home ownership has been on the Government's agenda, so too has been the Conservative Party's aim to ensure that the housing stock is used effectively and efficiently. In the consultation that ultimately led to the Localism Act, the then Housing Minister spoke of the need for social housing to be a "springboard to help individuals make a better life for themselves" but that as housing was a scarce commodity, flexibility needed to be worked into the system. The Localism Act 2011 introduced flexible and fixed term tenancies to try and introduce this flexibility, but implementation was far from universal.
The Bill seeks to press this agenda forward in 2 main ways. Firstly, the Bill provides for the so-called "pay to stay" - the idea that tenants who earn more than a set threshold (dependant on location) will have to pay an increased rent. There will be requirements for tenants to provide income details - and a requirement for the HMRC to provide information to verify details provided. Pay to stay has already generated a lot of column inches. As with the spare room subsidy, its implementation will not be popular. Challenges will undoubtedly follow.
Secondly, the ''springboard'' is being more robustly imposed with the enforced widening of the flexible tenancy regime. Local authorities will not be able to offer any new secure tenancies - flexible tenancies will have to be offered. The theory is that tenants who have a change of circumstances can be moved on at the end of the fixed term period. However, how many tenants will be moved on at the end of the fixed term is questionable - and the voluntary flexible regime has not been operating long enough for any clear data as to its usefulness to be obtained. The fear has to be that if the Government's aims are not met, who knows what it may introduce in the future to ensure social housing is only a temporary expedient, not a long term choice for tenants.
The Bill also impacts on the PRS. Banning orders, rent repayment orders and local authority databases are all designed to tackle ''rogue landlords.'' On the positive side, there are provisions in the Bill to make it easier for landlords to recover possession of abandoned properties. The PRS has undergone some significant changes over recent years - the provision of the Bill seem to continue this trend.
The Bill contains provisions that address the regulation of RPs and separately there are rules relating to RPs who face insolvency. Large parts of the Bill are then focused on changing the planning process, the aims of which are seemingly to ensure that much needed homes can be delivered more quickly.
The focus on home ownership is of concern to a lot of commentators, who argue that the country needs a range of housing that is affordable for everyone - not just an increased focus on home ownership. There are also concerns that the promotion of Starter Homes will come at the expense of affordable homes, given section 106 obligations currently deliver a large proportion of affordable homes which will be put at risk by the changes proposed in the bill.
The final text of the Act - and the way in which the Secretary of State exercises his discretion pursuant to the Act will be interesting. Whilst the shape of the Bill may alter drastically over the coming months, the finished Bill will have a huge impact on the country''s housing regime, be it for better or for worse. We will be keeping a close eye on the Bill as it develops and will prepare a further briefing once the Bill is given Royal Assent.
This article was written by Joanne Young and Ella Nyakuedzwa-Smith.