The Government wants to fix our 'broken housing market', according to the Housing White Paper released yesterday.
Secretary of State for Communities and Local Government, Sajid Javid, only confirmed what most of us knew already - that people need affordable homes to buy and rent - and admitted that 'for too long, we haven't built enough affordable homes'.
He pledged to increase house building, give local authorities more control over pressurising developers to start work sooner than currently stipulated, encourage more build-to-rent schemes and make longer tenancies more widely available.
At the same time, proposals also include increasing planning application fees and reducing the starter homes discount from 20% to 10%, as well as making such properties subject to additional restrictions.
In addition, the white paper confirmed that the ban on letting agent fees announced in the Autumn Budget will go ahead, although there is still no news on when this will come into force.
But what do people in the industry think?
Steve Bolton, Founder of Platinum Property Partners and co-founder of the Axe the Tenant Tax campaign, commented: "It's a welcome change to see Government focusing not just on homeownership, but the private rental sector too. But many people won't be able to, or indeed don't have the desire to, buy a home for some time, so ensuring we have a fair and affordable rental market is crucial - not least because excessive rents only delay the eventual step onto the property ladder.
"It's encouraging to see more support for longer tenancies, although more could be done in making this common practice across the sector. Long-term tenancies benefit both renters, who have greater security and peace of mind, and investors, who can manage their portfolio more successfully knowing they are less likely to face void periods.
"Improving property supply is key if we are to slow rising house prices and rents. But in the rental market, the proposed tax changes will hit private landlords' profitability and inevitably cause some to leave the market altogether, restricting the number of rental homes available.
"How can the Government say they are committed to improving homeownership and reducing rents while simultaneously introducing a Tenant Tax that will only result in higher rental costs, and therefore making it harder for people to save for a deposit?"
According to the white paper, almost two thirds (65%) of private tenants are happy with their tenure, compared to 48% in 2004-05, so it's clear that landlords are providing an essential service. However, Chairman of the Residential Landlords Association (RLA), Alan Ward, does not believe that build-to-rent is the only answer, saying: "Whilst we welcome efforts to boost the supply of homes to rent, this will not be achieved through a single-minded focus on corporate investment. The very fact that a renewed push is being made for such investment is a sign that previous efforts have failed.
"Any plan for the rental sector that does not provide equal support and encouragement for the vast majority of individuals making up the country's landlord population is doomed to failure."
Jeremy Blackburn, head of policy at RICS, also believes that the role of private landlords has been missed. He said: "We warned the housing minister that unless urgent action was taken there would be a 1.8 million shortfall of rental homes by 2025. Yet the previous Prime Minister took measures to dampen the demand for buy-to-let investments by making changes to the stamp duty threshold. This further reduced supply, arguably making a 2025 rental supply crisis more likely.
"If initial reports are to be believed, the white paper's focus on build to rent looks set to overcome the shortfalls of previous administrations and potentially create a housing market that is genuinely affordable for all. But a word of caution, we must not forget about the individual landlords who drive the rental market."
Tom Copley, Labour's London Assembly housing spokesperson, made the following comment: "The Government has finally woken up to the need to look beyond home ownership, but this is to attract institutional investors. While the promise of longer tenancies is welcome, its bearing will be miniscule unless it is extended to existing rental properties."
On the planning proposals in the white paper, Planning Manager at Platinum Property Partners, Alison Broderick, had this to say: "Given the paper was called 'Fixing Our Broken Housing Market' it did not contain many measures with which to address this. From a planning perspective there was not much new. It acknowledged that developers do not start building straight away, but glosses over the fact that many developments only have to be "commenced" not "completed" in the time frame. Reducing this from three years to two years won't change this principle.
"Local authorities will also have to draw up and review an honest assessment of housing need, something many of them do already. Understanding the need for housing isn't necessarily the problem, it is delivering it."
Let's see how soon these proposals become a reality and whether the Government abolishes ludicrous tax changes that really are increasing barriers to homeownership and affordable renting.
The white paper, 'Fixing our broken housing market' can be found here
