Legis Housing Round up - November 2018
Robert is the founder of Legis and a partner at a UK law firm with a background working as a policy adviser in Parliament. He was a candidate in the 2016 London Assembly elections. Click here to get in touch.
Another budget, another raft of housing proposals and consultations announced. While all the attention is on untangling Britain’s 45 year membership of the EU, the MHCLG and Law Commission consultations currently open suggest that real legacy of this Government could be its reform of a millennium of property law in England and Wales.
Budget 2018 – Headlines
A reminder of the housing headlines in the October Budget:
an extra £500m for the Housing Infrastructure Fund;
confirmation that the cap on the amount of money local authorities in England can borrow to build housing would be abolished (as of 29 October 2018);
first-time buyers purchasing qualifying shared ownership homes up to £500,000 will be eligible for relief from SDLT;
the Help to Buy Equity Loan scheme would be extended until 2023, though with a few more restrictions on eligibility and lower regional caps;
the introduction of a simpler system of developer contributions enabling local areas to capture a greater share of uplift in land values for infrastructure and affordable housing. The reforms include simplifying the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift and removing all restrictions on Section 106 pooling towards a single piece of infrastructure. The Government will also introduce a Strategic Infrastructure Tariff for Combined Authorities and joint planning committees with strategic planning powers;
an additional £10 million to support ambitious housing deals with authorities in areas of high housing demand to deliver above their Local Housing Need;
a further £8.5 million to allow 500 parishes to build new discounted homes; and
Neighbourhood plans are to be embedded, with the Government updating planning guidance to ensure that these cannot be unfairly overruled by local planning authorities.
Other Open Government Consultations
Private shared homeownership: call for proposals – closing on 1 February 2019, the Government announced in the 2018 Budget that it is inviting proposals from investors willing to collaborate with government to deliver a new wave of shared ownership homes.
Planning reform: supporting the high street and increasing the delivery of new homes – following announcements in the Budget 2018, the Government is consulting on planning measures to support high streets to evolve, closing on 14 January 2019. It is looking at creating a more flexible and responsive ‘change of use’ regime with new Permitted Development Rights that make it easier to establish new mixed‑use business models on the high street. It will also trial a register of empty shops with selected local authorities, and trial a brokerage service to connect community groups to empty shops.
The consultation also looks at new permitted development rights to allow upwards extensions above commercial premises and residential properties, including blocks of flats, and to allow commercial buildings to be demolished and replaced with homes.
Changes to planning policy and guidance including the standard method for assessing local housing need – closing on 7 December 2018, the Government is consulting on proposals to update planning practice guidance on housing need assessment to be consistent with increasing housing supply. This consultation also proposes clarifications of national planning policy on:
housing land supply;
the definition of deliverable; and
Implementing reforms to the leasehold system – this 26-question Government consultation was launched on 15 October and closes on 26 November 2018. Forming part of its response to the 2017 consultation on unfair prejudices in the leasehold market, the Government is now consulting on the detail of:
How to implement a ban on the unjustified use of leasehold for new houses;
How to implement the reduction of future ground rents to a nominal value;
How to implement measures to ensure that the charges that freeholders must pay towards the maintenance of communal areas are fairer and more transparent; and
How to implement measures to improve how leasehold properties are sold.
A new deal for social housing - the Government published this Social Housing Green Paper in August 2018 and has just finished consulting on its proposals. The consultation closed on 6 November 2018, sitting alongside a Call for Evidence reviewing existing social housing regulation which closed at the same time. The Government is now considering responses.
The Law Commission’s 13th Programme of Law Reform: Residential leasehold and commonhold
The Law Commission’s project is looking to address three issues:
the right to manage; and
commonhold, which provides an alternative form of ownership to residential leasehold.
The Law Commission is currently looking at leasehold enfranchisement:
Leasehold Enfranchisement - the mammoth consultation (consisting of 125 questions and sub questions) closes on 7 January 2018 and seeks responses on its provisional proposals for a new enfranchisement regime. The Law Commission considers that leasehold tenure is inherently unfair, it being seen as a wasting asset and that the current enfranchisement regime is inconsistent, complex and costly.
CLG Select Committee Inquiries
Leasehold Reform Inquiry - the first oral evidence session of the ongoing inquiry was held on 4 November 2018 with contributions from the Leasehold Knowledge Partnership and leaseholders living in leasehold houses. As an adjunct to the Law Commission’s own consultations, the Committee is particularly concerned with what more can be done for existing leaseholders, in both houses and flats, affected by onerous terms such as high service and administrative charges, and large increases in ground rents. This inquiry is closed for written submissions.
The Long term funding of adult social care inquiry into the approach taken by the Green Paper on the long-term funding and provision of adult social care is awaiting the Government response.
Land value capture inquiry report into the effectiveness of current land value capture methods was published on 13 September 2018 and is awaiting the Government response.
Consultations envisaged under the 2018 Budget
While housing wasn’t centre stage in the same way as it was in the 2017 budget, the Chancellor did trail a couple of future consultations:
Reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy – the Government will consult on proposals to better target private residence relief at owner occupiers, from April 2020.
Consultation on SDLT charge for non-residents – The government will publish a consultation in January 2019 on a SDLT surcharge of 1% for non-residents buying residential property in England and Northern Ireland.