The 2024 General Election saw Labour sweep into Government – but what does this mean for those involved in the affordable housing sector?
The immediate signals from the new government are promising and it is clear that much of the thinking undertaken in opposition is finding its way into policy.
The Government has been clear on its ambition to "Get Britain Building" in committing to the delivery of 1.5 million new homes (including a significant proportion of affordable ones) within five years and has already started consultation on changes to the NPPF (including the prioritisation of so called "grey belt" land for residential development) and the reintroduction of mandatory housing targets on local authorities to achieve that ambition.
There have been a number of 'big statements' but, as might be expected at this stage, there is little on detail about how the Government will facilitate the delivery of its housing targets. There have been, however, a number of key bills announced for the housing sector.
Planning and infrastructure
Proposed legislation to streamline the delivery of critical infrastructure and housing, which would seem likely to include energy projects and New Towns (see Delivering Labour's new towns). Promises have been made for up to 300 new local planners and modernisation of the planning committee processes, news and resourcing which will no doubt be welcomed by all those seeking to deliver new build homes.
Compulsory purchase compensation is also set to be reformed so that landowners are paid a 'fair amount' – what that means, remains to be seen.
Renters' rights
Clearly this has been on the cards for a while, but legislation is to be brought forward to abolish 'no fault' evictions and strengthen private tenant's rights. The bill will require privately let homes to meet a decent homes standard, with landlords being given statutory timeframes to address problems where a home is unsafe. A private rented sector database will also be created, which in part will enable councils to target enforcement measures against landlords. Whilst creating safe, secure places to live sounds like it should be "a given", the strengthening of tenants' rights may send jitters into the growing Build to Rent sector if legislation is implemented without careful thought to its potential consequences (the example of the adverse impact of rent controls in Scotland on Build to Rent investment is well documented). However, legislation could have the effect of encouraging professional landlords (and the withdrawal of so-called amateur landlords), who are better equipped to meet the new standards and whose business model is often based on longer term tenancies. Pension and other funds potentially could deliver significant build to rent homes which could make a significant contribution to Government housing targets.
Devolution
An English devolution bill will make city and county devolution a default setting, and with that a route to transfer resources and responsibilities to local areas. Locally areas will be better able to co-ordinate initiatives in their local economy, policy and housing objectives and ensure funding is aligned to do that. The Government has tapped into the success of the Greater Manchester devolution and wants to replicate that in other parts of the Country.
Leasehold and commonhold reform
This is intended to make it easier for leaseholders to extend their leases or manage their buildings. The Government will also consult on regulating ground rents for existing leases and what it terms unfair costs.
Right to Buy and stability for renters
Government have also been quick off the mark to reinvigorate local authority housing delivery, including a change to the use of Right to Buy receipts (see Use of Right to Buy receipts – new flexibilities announced) and has already trailed reform to the discounts afforded under the Right to Buy scheme.
And something that will be welcomed by both local authorities and housing associations is the commitment by Government to provide rent stability, which should pave the way to greater investment in new housing supply.
So, what of the elephants in the room?
The skills shortage – Any discussion about increasing supply cannot take place without a debate about the skills shortage the housing sector currently faces. Unlocking solutions to the sector's labour shortage must form part of the government's plans (query is there any scope for some joined up thinking in relation to training ex-offenders given the appointment of James Timpson to Minister of State for Prisons, Probation and Reducing Reoffending?).
The future of shared ownership – The clear focus from Government on development of homes for letting at a Social Rent does call into question the government's commitment to shared ownership. This brings a challenge for two reasons; firstly, the grant requirement for Social Rent dwellings is clearly going to be higher than for Shared Ownership – so far fewer homes can be delivered for the same "pot" of grant. Secondly, for all of the challenges associated with Shared Ownership flats (especially in relation to service charges and the "affordability" of the product in high value areas) (something that the sector is alive to and which the new 'Shared Ownership Council' is seeking to tackle), Shared Ownership remains a vital part of the affordable housing landscape and in the overwhelming majority of cases offers the only prospect of housing for those who cannot access full home ownership. It is to be hoped that shared ownership retains a place in the Government's delivery toolkit.
Financial capacity – Even with enhanced grant rates, there must still be legitimate questions about the financial capacity of both the housing association and local authority sectors to deliver the homes that Government is aspiring to; after all research published by Legal & General and the BPF in 2022 suggested a theoretical maximum capacity for the housing association sector to deliver 65,000 homes a year. Clearly an uplift in grant and a longer term rent settlement might make a modest difference to that figure, but a step chance in approach will surely be necessary in an environment where upwards of 100,000 affordable homes a year is sought by Government and it will be interesting to see if Government can do more to facilitate greater investment by pension funds and other long term investors in the sector.
Tackling temporary accommodation – With over a million households living in temporary accommodation, to date Government has not committed any additional funding for affordable housing to tackle this issue, but given the enormous constraints on local authority finances finding a solution to the temporary accommodation crisis must surely be a priority.
Whilst it has to be been acknowledged that public sector finances remain constrained, and housing will have to compete with other priorities, including health and education, if the new administration can indeed "Get Britain Building", then housing stands to benefit, both directly in terms of new homes, but indirectly, if economic growth can help push a stronger public sector finances.
At the moment, it's a promising start but with a strong sense of "watch this space" as details of the reforms come forward.
