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Property industry welcomes ‘first step’ towards coherent housing strategy and review of private rented sector

The British Property Federation (BPF) has welcomed the government’s new housing strategy, but warned there must be no delay or timidity in its execution with both house building and the wider economy at crisis point.

Published today by the Prime Minister and Deputy Prime Minister, the housing strategy is designed to tackle the housing crisis, boost the economy and create jobs.
 

The strategy throws its weight behind a long standing BPF campaign for the creation of a large-scale, professionally run private rented sector, whereby major institutions such as pension funds build homes to let. The government today committed to bringing forward sites for build-to-let and to conduct an ‘independent’ review of the sector in the New Year.
 

Speaking before giving evidence at a CLG Select Committee into the finance of new housing this afternoon Ian Fletcher, director of policy at the British Property Federation, said: “The housing strategy is a welcome first step towards a coherent and long-term vision for house building in this country and it is good to see the government recognise the importance of encouraging investment in to the private rented sector, something that will be vital if we are going to see the necessary number of homes built to meet demand. 
 

“We would urge the government to press on with this quickly. The strategy is welcome but it comes not a moment too soon with house building at historical lows and the general economy in dire need of support. In practice this means bringing forward sites for build-to-let by next April, at the latest, and conducting a swift independent review by somebody with intimate knowledge of the sector. 
 

“Likewise, we would urge government to get its ideas on converting empty offices in to new homes by next spring.”
 

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Patrick Clift, Media and Public Affairs Manager, on 07834 439 505 or at pclift@bpf.org.uk

Paul Sweeney, Media Officer, on 07841 732 194 or at psweeney@bpf.org.uk

Notes to editors – quotes on specific policy announcements below

An independent review of barriers to investment in private homes for rent (para 16)

With demand for rental housing likely to continue to rise, we must continue to support innovation and investment. We will therefore put in place an in-depth independent review of investment in private homes to rent. Building on existing work, it will examine the drivers for and barriers to investment and place these in the context of existing landlords’ business models and tenant aspirations. The work will be supported by input from representatives drawn from key parts of the industry, including existing investors, alongside consumers.

Ian Fletcher said: "We welcome the announcement of a review but would be interested to understand more about how it will work. The Strategy states that the review is set to be completed by Summer 2012, but has not given any indication of when it is to start, who it is to be lead by and how involvement of industry is to be facilitated when it is to begin."

Encouraging local authorities to make full use of the robust powers they already have (para 19) 

The Government is committed to supporting growth and innovation by avoiding unnecessary regulatory burdens on landlords. But we are also looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.

Ian Fletcher said: "We welcome Government’s desire to support growth and innovation in the PRS and avoid placing unnecessary regulatory burdens on landlords. Local authorities have a vast array of powers for dealing with landlords who are operating illegally, but all too often such powers are not used. Professional landlords fully support local authorities in their use of their existing powers to push out landlords who taint the reputation of the sector by exploiting their tenants and flouting the law." 

Tackling stalled sites (paras 28 – 31)

We will encourage action on stalled development by allowing developers to require local authorities to reconsider those S106 agreements agreed in more prosperous market conditions prior to April 2010. We will consult on this proposal shortly. We will ensure that any resulting appeals are dealt with promptly by the Planning Inspectorate, to give certainty to both developers and local communities. The Government will also encourage a flexible approach to planning obligations, to safeguard against substantial and unexpected change in market conditions.
 

We will also launch a new £400 million Get Britain Building investment fund, which will support building firms in need of development finance, including smaller and medium-sized builders. This will help to unlock progress on stalled sites that have planning permission and are otherwise shovel ready. We will publish a prospectus providing more details – and inviting bids – before the end of the year.

Ian Fletcher said: "We welcome the encouragement from Government to renegotiate S106 agreements, we’ve been urging local authorities to work with the development industry in this area for some time in order to get shovels in the ground, and homes and jobs created. We’d like to see provisions in place for these negotiations to take place sooner rather than later, with a swift consultation period.

"The Get Britain Building investment fund is a good start, however, we will probably need a bigger program than this to fully kick start the economy." 

Land auctions (paras 38 – 40)

We will pilot the land disposal elements of the land auctions model. With the Ministry of Defence and the HCA, we have identified a number of public sector sites, for example in Catterick, West Lancashire and Hastings, where we will invite local authorities to work in partnership with us in the auction pilot.
 

We will be inviting local authorities to work in partnership with the public sector landowners on sites in their areas and have set aside funding to support the participating local authorities. Working with the landowners, the local authorities would make arrangements for applying for planning permission and selling the sites in open competition, and for the sale proceeds being shared between the local authority and the landowner. 

Ian Fletcher said: "We welcome new and innovative ways to create growth in areas that are in desperate need, however we’re not convinced that land auctions will work universally. The changes in the planning system have yet to bed in, and it’s unlikely that the land auction model would work comfortably on private land."

Locally planned large scale development  (paras 41-44)

To encourage new thinking in this area, we will run a competition to promote the development of a wave of larger-scale projects, including on brownfield sites, where there is clear local support and private sector appetite. We are keen to see innovative approaches and a wide range of models and partnerships come forward, responding to local challenges. We will publish a prospectus setting out more detail of our proposed approach – what the Government is looking for from developers and local communities, and what we can offer in return – in 2012. 
 

This will include further detail on streamlined and collaborative planning. The Government will work with investors and local authorities to promote the use of tools such as Local Development Orders. The Government recognises that this will require some upfront investment and is willing to provide support to a number of areas wishing to press this approach forward. Infrastructure support and prioritisation is a key concern for communities, local authorities and the private sector. Upfront investment in infrastructure that unlocks growth is essential to winning the confidence of communities and the private sector for large-scale, long-term projects. The Government will prioritise proposals that have a good fit with national infrastructure networks and are sustainable and affordable. 

Ian Fletcher said: "The cultural change required to help local communities to see development in their area in a positive light is to be encouraged, and we hope that a more inclusive planning process (including a competition) may bring this forward faster.

"We have always advocated further work on streamlining the planning system following the recommendations in the Killian Pretty and Penfold Reviews. Local Development Orders haven’t been a resounding success, as they’ve had limited interest from Local Authorities. There are other methods through which large scale infrastructure and long term projects can be brought forwards with greater success – Tax Increment Financing (TIF), and effective incentives (such as Enterprise Zones)."

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