Government's next steps in housing policy: Renting, energy efficiency and first time buyers

We’ve now seen the full consultation on the National Planning Policy Framework which formalises the Government’s commitment to planning reform. As expected it covers mandatory and in many cases higher housing targets (London being the most obvious exception), changes to the green belt including the introduction of the grey belt concept and more support to build affordable housing.

The Government’s other housing plans were less well defined during the election campaign but with the flagship policy announcement done, what will be their next steps on housing policy?

Long term housing strategy and affordable housing funding

One of the next steps trailed in Angela Rayner’s announcement of the consultation on the NPPF was that there would be further commitments on affordable housing alongside the Autumn Budget on 30th October.

This will include an update on future government investment in genuinely affordable housing and work with Home England to introduce more flexibilities into the current Affordable Housing Programme. The Government will also use the Autumn Budget to provide councils and housing associations with the rent stability they need to be able to borrow and invest in both new and existing homes. This combination of changes is designed to “help deliver the biggest increase in affordable housing in a generation.” Nice to see some ambition on this from Government!

Alongside these measures a National Housing Strategy will be announced at the Budget. Detail on this strategy and the areas it covers are limited at the moment. Speaking in Parliament Angela Rayner stated that it would “transform the housing market so that it delivers for working people.”

New Towns

Still on the housebuilding front, Government has also made the first appointments to its New Towns Taskforce. This is the body that will advise on sites for the set of new towns which form an important part of the Government’s housebuilding plans. The taskforce will be chaired by Sir Michael Lyons with Dame Kate Barker as Deputy Chair - two people who have plenty of experience advising governments on housing issues.

The rest of the taskforce will be appointed over the summer ahead of its first meeting in September. They have been given 12 months to work with local authorities and other stakeholders to identify potential sites for new towns although have the ability to report more quickly if suitable sites are identified sooner.

The new towns aspect of the Government’s housebuilding plan are by some way the most difficult to achieve. Since the original new towns programme numerous attempts have been made to build new towns but none have been successful. There’s a reason the last Labour Government’s proposed eco-towns are included in Wikipedia’s Utopias series.

Renters’ Rights Bill

Moving away from housebuilding, one of the other key areas Labour focused on during the election campaign was the private rented sector. A key pledge was to quickly implemented the long agreed package of measures which made up the last Government’s Renters (Reform) Bill. The most high profile of these pledges was to end so called ‘no fault’ or Section 21 evictions where tenants can be evicted without their landlord giving a reason.

The newly minted Renters’ Rights Bill was included in the Kings' Speech, confirming the Government’s commitment to delivering these measures. As with the name change of the Bill, it should be expected to take on a bit more of a pro-tenant slant when published. Key to securing landlord support will be commitments to ensure that court processes will be improved and speeded up alongside the other commitments.

Timing of the Bill is yet to be confirmed but it come come before Parliament as soon as the Autumn, particularly given pre-election commitments that a Labour Government would end Section 21 evictions “immediately.”

Private rented sector minimum energy efficiency standards

Another key change to private rented sector regulation will be higher minimum energy efficiency standards. This reintroduces the planned measure, scrapped by the last government, which would require all privately rented properties to have a minimum EPC rating of C before they could be let out. Energy Secretary Ed Miliband confirmed that landlords will have to improve their properties to this level by 2030 to continue renting out their properties.

These two measures combined present some regulatory challenges for landlords as the Government seeks to improve the sector. Many will take them on board and adapt appropriately but they may also cause some landlords to leave the sector. The eventual delivery of both these measures, both supposedly happening for several years now, does at least give some certainty to landlords. Grants and or tax breaks to support the installation of energy efficiency measures would help soften the blow of the EPC C requirement.

Warm Homes Plan

More generally DESNZ civil servants are now working on the implementation of Labour’s Warm Homes Plan. Central to this will be a pot of ￡6.6 billion of funding to be used for grants and low interest loans to support home retrofit. Officials are working on a plan that would combine the ‘carrots’ this funding can help deliver with some ‘sticks’ to drive change (including the minimum EPC C requirement.

This plan will form the basis of Government activity including work with banks and building societies to deliver more low cost loans for the able to pay market. It will also build on existing activity including the boiler upgrade scheme, Great British Insulation Scheme and ECO rather than starting again from scratch,

Support for first time buyers including ‘Freedom to Buy’

Finally we are yet to see any detail on the Freedom to Buy mortgage guarantee scheme announced during the election campaign. This was the headline first time buyer support measure in Labour’s policy package and it is likely they will take some time now they are in Government to understand exactly how it might work and what additional aspects it will need on top of the current MGS. This is likely to be one that will be included in the Autumn Budget giving civil servants time to consult with industry and get the details of the scheme ironed out.

A quick start followed by more activity in the Autumn

The speed with which the new Government has moved to make changes to planning policy and signal it’s commitment to delivering 1.5 million homes over the next five years shows the importance it places on housing a tool for economic growth. The next phase of it’s plans are likely to focus on how people access those homes - including funding for affordable housing and mortgage support - and the quality of the experience when living in them - rental reform and energy efficiency improvements.

In line with their general direction around increasing household financial resilience and improving the economic position of households, they will want to ensure people’s housing is affordable and providing them with the basis to thrive.