Secretary of State for Communities and Local Government, Sajid Javid, released the much anticipated Housing White Paper and spoke in the House of Commons on the 7th of February.
Javid said “The government recognises the housing market is broken…since 1970, house price inflation has far outstripped the rest of the OECD…the house price to annual salary ratio doubled between 1997 and 2010, rising from 3.5 to 7.0. Over the next five years it increased to 7.5 but it is still moving in the wrong direction. It takes first time buyers 25 years to save for a deposit and many couples that are renting spend 50% of their salary on rent.”
He went on to say it was one of the biggest barriers to social progress. The emphasis to solving the housing crisis will now be placed more on the rental market as an alternative to home ownership.
Plans in the white paper include:
- A target to build 1m new homes by 2020 at a rate of 250,000 a year and to encourage more affordable rental properties through a Build to Rent Scheme. Affordable being defined as 20% below market value.
- Incentives to landlords for ‘family friendly’ three year guaranteed tenancies to be offered to tenants in an effort to increase stability and security for those families that want it.
- Encourage institutional investment in the Private Rented Sector (via Build to Rent).
- A £3bn fund to help smaller building firms compete against major developers and to support pre-fabricated off-site construction with building kits assembled in factories.
- Require all councils to make an honest assessment of the housing need in their area and to plan on that basis including the need of first time buyers and the retired looking to downsize.
- Green belt protection will not be weakened apart from exceptional circumstances.
