1. The Policy Landscape and Housing Sector Trends Christine Whitehead London School of Economics
Policy priorities for housing in England -
planning, finance and delivery
Westminster Social Policy Forum
12 May 2017

2. Housing Policy and Market Trends
Housing policy has become New Housing policy and the Housing market the New Housing market;
Even within this, their aspirations (and those from other parties) seem fairly minimal – net additions around 200,000 pa ie well below assessed requirements;
Actual output around 190,000 in 2015/16 and probably higher in 2016/17 - nearly back to mid 2000s
Mix of provision different from mid-2000s: more change of use and permitted development especially in London; more apartments; higher densities; higher rise; more affordable; some Build to Rent
Some of these changes a result of policy; some a result of market pressures;
THE biggest trend has been away from owner - occupation (68% in 2007; 62% in 2016) towards private renting (14% to 20% a 50% increase in stock) - despite policies that have consistently supported homeownership.

3. Housing Policy and Trends: Planning
Objective: to speed up delivery and enable higher overall output levels.
Land supply often seen to be the biggest constraint – even in lower demand areas but especially in London.
Trade offs between small number of large sites and larger number with mix of sizes;
Reducing planning risk to limit development costs/required returns and make more developments viable; only helps if more land made available;
Addressing constraints such as planning conditions and utility provision timetables as well as affordability;
Issues around viability and its impact on land supply and on the delivery of affordable housing.

4. Priorities and Trends: Finance
Impact of increased mortgage market regulation. Around 337,000 first time buyers in 2016 – nearly 50% of all mortgage lending but way below historic numbers; affordability at its best for decades (repayments around 14% of income) but entry still very difficult;
Government’s Help to Buy policy – maybe 30% of new build market -supporting development; sharing risks; increasing prices or stabilising market?
Increasing importance of investor demand – overseas buyers; Buy to Let often not dependent on mortgage finance;
SDLT and other tax changes limiting demand for Buy to Let as well as more generally reducing transactions and therefore limiting adjustment in the existing market;
Development finance - increasing use of equity finance/less reliance on borrowing – but does this exclude smaller builders?;
Importance of international investors for large developments and for Build to Rent.

5. Housing Policy and Trends: Delivery
Who is delivering – over-concentration in the development industry;
‘Obsession’ with bringing small firms back into the market;
Business model is demand led to reduce risk – no incentive to reduce prices;
Government sees an increasing role for Housing Associations in delivering both affordable and market homes – but ten Associations deliver half of the sector’s sales;
Potential for Direct Commissioning and Joint Ventures with construction industry and land owners;
Do local authorities have a role to play in delivery – arm’s length development companies.

6. Other Priorities Breathing new life in the existing market;
Addressing the role of housing support in achieving minimum standards of living;
Generating a better functioning private rented sector – with greater security of tenure; and minimum standards both physical and management that can be enforced;
Finding a more effective approach to accommodating homeless households;
‘Fixing a broken housing market’ cannot be done by simply concentrating on new build;
But is housing really the political priority that we pretend?