The problem of housing undersupply periodically made the news prior to the election this year. However, the last and subsequently current government was, perhaps, anticipating the voteworthiness of this topic in summer 2014 when they introduced the concept of Housing Zones. In this report we will look at what is currently happening with Housing Zones and at the opportunities and risks they might pose to investors.

First of all, a quick briefing on what Housing Zones are: Ostensibly the aim of Housing Zones, according to Chancellor George Osborne, is to 'keep Britain building'. In practice, however, they are designed to increase housing supply (and perhaps also rein in prices and rents). Housing Zones consist of a package of measures to build 200,000 new homes across England with each zone providing at least 750 homes and some up to around 5,000.

During 2014 interested local authorities were invited to submit proposals for zones in their area. Twenty nine locations outside London and 25 locations within London submitted proposals. The current timescale is that planning permissions (not necessarily the properties themselves) covering 90% of this land should be in place by 2020.

Housing Zones are led by a local authority and involve partnerships with landowners and developers. They can receive planning and technical support from central government - or, in London, Greater London Authority (GLA) officers, with the GLA taking a particularly proactive role. Once set up each zone will have a delivery board to oversee implementation. They allow for streamlining of the planning system, using such methods as Local Development Orders, Compulsory Purchase Orders and Planning Performance Agreements. They are backed by a fairly small amount (£400m in London and £200m regionally) of recoverable government funding for establishment costs and land remediation. They also allow partners to access finance at preferential rates from the Public Works Loan Board.