Rachel Keenan discusses the role of shared ownership in the Government’s White Paper and what actions are being taken to increase supply.
The Government’s ‘Fixing our broken housing market’ white paper sets out how it intends to build more new homes, open up the market to other builders, improve private renting and tackle homelessness.
Its proposals include:
- Planning for the right homes in the right place: Making sure every part of the country has an up-to-date and ambitious plan so local communities can decide where development should go.
- Building homes faster: Boosting local authority capacity to deliver new homes by improving the planning process, addressing skills shortages and ensuring infrastructure is provided at the right time.
- Diversifying the market: Supporting and encouraging housing associations, local authorities, smaller/medium sized builders and self-builders to build more homes. Housing associations are a key part of the diversification strategy as highlighted by the Government’s commitment to implementing the necessary deregulation measures to allow them to be classified as private sector bodies.
- Helping people now: Making renting fair, improving neighbourhoods by cracking down on empty homes and preventing homelessness by doing more to assist at risk households and also reduce rough sleeping.
The role of shared ownership
Shared ownership filters through the first three of these main aims, forming a key element of the Government’s proposals along with other schemes such as Help to Buy and Right to Buy.
The strategy is supported by The Shared Ownership and Affordable Homes Programme 2016 to 2021, which aims to increase the supply of new shared ownership and affordable homes in England by March 2021.
The Programme states that since 2011, nearly 41,000 affordable homes have been made available through shared ownership. Acknowledging this achievement, the Government wants to increase the supply on a large scale to meet this public demand.
Ambitions
Over the next five years, there is currently £4.7 billion of funding available to help build a further 135,000 shared ownership homes.
The ambition is to deliver quality as well as quantity. Shared ownership already has a proven place in housing provision but the programme we will take it to the next level providing “a nationwide opportunity for a new generation of home owners”.
The rules have been reformed to make these homes available to the widest possible range of buyers and for-profit registered providers such as Sage Housing Limited are an example of this. The Government also wants to make capital grants open to the widest possible range of developers and housing providers thereby providing further opportunities for those who are open to expanding.
The Government’s aim to remove restrictions is important. This should encourage more innovative ideas such as the use of advanced construction technologies or MMC (modern methods of construction) and the development of Garden Cities.
Support for housing associations
In her landmark speech to the National Housing Federation last week, Theresa May outlined progress since the Government’s white paper, including reference to the new National Planning Policy Framework which has removed a large swathe of bureaucracy to home building “to make it more difficult for commercial developers to dodge their affordable homes obligations.”
The Prime Minister stated she wanted housing associations to take the lead in transforming the way housing is delivered and to take on and lead major developments themselves.
The achievements of L&Q and Peabody were noted and it was announced that new longer term partnerships will be opened up to the most ambitious housing associations through a ground breaking £2 billion initiative with funding being offered as far ahead as 2028/29.
A vital role
The Government has made it clear that housing associations have a huge role to play in providing new opportunities for home ownership to a whole range of people in our communities. Shared ownership homes are a vital part of this strategy and there is no doubt that they will become an ever increasing and familiar way for people to step onto the property ladder.
Related proposals
The Government’s plan to fix the broken housing market also includes:
- Longer terms for private rentersRecent research has shown that the average tenant remains in a private rented property for approximately 4 years, but that 81% of tenancy agreements are Assured Shorthold Tenancy Agreements which usually last somewhere between 6 to 12 months. This offers very little security for tenants and indeed the landlords.Current proposals to set a minimum 3-year term would not only provide more security for both tenants and landlords it would also encourage further investment in the Build-to-Rent sector.
- Social Housing Green PaperIn the 1970s almost 40% of the population lived in social housing, compared to just 17% in 2018. There is a now however a critical shortage of social housing due to decades of underfunding.In August 2018, the Social Housing Green Paper was released signalling a step change. Understandingly, housing supply is a top priority, but following the tragedy of Grenfell Tower, safety and quality of the build is also a priority.
Increasing the supply of low-cost rental housing will help the Government achieve their target to build one million homes by 2020, but more importantly it will lower costs for low income families and allow them to move out of the private rented sector.
Rachel Keenan is a Chartered Legal Executive in the Real Estate & Projects Team.
