As highlighted in the Housing White Paper and reinforced in the Autumn Budget, the Homes and Communities Agency (HCA) is being replaced by Homes England.
Announced by Housing Secretary Sajid Javid, the launch of the new agency is aimed at helping to deliver the Government’s target of 300,000 homes a year by the mid-2020s.
A separation of powers
The launch of Homes England signifies the separation of the HCA’s investment powers with their regulatory function. In essence the regulator’s role and regulatory framework remains the same but the department responsible for regulation is being re-launched under the operating name “Regulator of Social Housing” or “RSH”. This quieter re-branding exercise is being undertaken to create a strong and independent regulator with credibility in the sector and address any perceived conflict between functions. Alongside this re-organisation of the HCA in the ministerial reshuffle, DCLG has been re-named as the Ministry of Housing Communities & Local Government (MHCLG).
Behind these new names, until legislation is enacted, both RSH and Homes England will remain operating entities of HCA. The intention is to fully separate the investment and regulatory functions.
Name change or game change?
So, will this separation of powers and specific focus on investment powers for Homes England be a significant step towards solving our housing issues or is it just an administrative exercise?
At this stage, details regarding the specific remit of Homes England and how this re-branded body will differ from before is not yet totally clear; some may struggle to see how radically different it could be. After all, the HCA has been a land owner and held investment powers for some time now alongside its responsibility for regulating the social housing sector. Nonetheless, this new-look agency marks the Government’s desire to carve out a unique space for the agency’s role as an investor and facilitator of development of housing. And this new focus inevitably presents some opportunities.
New funding streams:
- Homes England is reported to be backing an initiative which will see £750m of the £1bn short-term fund go to SMEs, custom builders and developers using modern construction methods.
- The new agency is expected to continue to support the Home Building Fund, which is a £3 billion fund which was set up by HCAto ramp up the delivery of homes.
- It is reported that around 310 local authorities have now published a brownfield register (and more are to follow). These registers will be used by Homes England (and others) to progress development across the country of brownfield sites. The agency plans to work with developers, to help develop brownfield land into homes, including supporting them with infrastructure.
- Following Budget 2017 Homes England is expected to gain compulsory purchase order powers to assist it in bringing forward development (on land which may otherwise be ‘land banked’) although the scope and likely exercise of these powers is still unclear.
Proposals for new funding streams and its drive for development were trailed in the Housing White Paper and Budget 2017 so won’t come as a huge surprise to the sector. But the launch of Homes England shows that the Government is taking a positive step and giving legs to already mooted policy ideas. Key to the new agency’s success will be the level of power it can exert, especially financially, to ensure that there is sufficient funding to back its proposals and bring those good ideas to fruition.
One question is whether Homes England will become more innovative and flexible and less wedded to procedural matters such as the application of rigid eligibility criteria for funding streams. It is expected that this new look body will invite new thinking from local authorities, RPs, private developers as well as others who aren’t one of those three established actors and support the delivery of good ideas whether through the provision of grant, lending or even guarantees.
Over the coming months, Homes England must clearly set out its stall with a focus on how current and new initiatives will be implemented and pushed forward. It will then be able to offer the housing sector the assurance that with its new name, comes new responsibility, drive and and resources that will genuinely help it to boost development and all important housing supply.
Caroline Mostowfi is a Partner in our Real Estate and Projects team