Opinion is divided on whether the UK Government’s proposed reforms to the planning process can deliver the amount of affordable homes we desperately need. Let’s dig deeper.
The UK Government is looking to reform the development planning process as part of its strategy to get more houses built. Affordable housing, that brings so many benefits to society and the economy, is due to be drastically affected by the proposed reforms. However, rather than build more affordable homes, as the country so direly needs, many experts believe the reforms will cause developers to produce less.
In this article, we’ll look at the proposals in more depth, as well as the differences of opinion around them. We’ll also explain why the provision of affordable housing should be at the centre of any new strategy.
Reforming affordable housing provision
Currently, most of the time when a developer builds a new housing estate, they are required to set aside a proportion of it for affordable housing. This proportion can be negotiated with the relevant local authority, but on average, 25% of these new build properties are given over to the affordable housing stock. An association then allocates these properties to people who need them, for rental prices below market rates. This brings several benefits, as we’ll see later.
However, for developers, affordable housing cuts into their bottom line, because they cannot sell these homes at the market rate. Their goal is often to avoid having to make affordable housing from their developments available.
The Government’s new proposals put in a threshold, where builders of small developments (under 40 or 50 properties) do not have to allocate properties for affordable housing at all. If your development is above the 40 or 50 home threshold, you will have to pay an ‘infrastructure levy’, out of which the provision for affordable housing will come.
Why are these reforms happening?
The Government believes these reforms will speed up the planning process, as there will be no provision for developers to negotiate with local authorities for more lenient measures. The threshold will mean that developers will build on smaller sites more often, rather than concentrate only on massive developments where they can make a larger margin.
The Ministry of Housing believes that the proposed rule changes will mean that there will be as many properties given over for affordable housing, if not more.
Also, they hope to only have the threshold in for the first 18 months of the rules being in place. After that, all developments will require affordable housing to be provided.
Will the number of affordable homes drop?
Many housing experts believe that the new rules will lead to a drop in the number of affordable homes provided, rather than it being the same or more.
Over the last five years, there have been around 120,000 homes built on smaller developments of less than 50 properties. That means there would have been 30,000 homes given over to the stock of affordable housing.
If the Government’s proposals are taken up, these 30,000 homes would not be affordable housing. Instead, they would have been sold at market rate as usual.
In certain areas, notably London and the South East, where there are not as many large sites around so developments tend to be smaller, there would be fewer affordable homes given over.
Why we need more affordable homes
The reason why this matters is that the UK needs more affordable homes, not less.
Affordable homes bring benefit to all, not least the people who get to live in them.
Currently, there are more than a million households on waiting lists for council houses, around 90,000 in temporary accommodation and between 5,000 and 28,000 people sleeping rough. Homelessness is a blight on society, leading to further problems involving mental health, drug dependence and crime. Affordable housing is a solution to these problems. When you can get people off the streets and into a permanent address, life immediately improves.
There are also numerous health benefits in building more affordable homes. People who have a permanent address where they can put roots down tend to live healthier lives. They eat better; they have easier access to doctors and hospitals; they are also more likely to exercise. It also benefits mental health, as you are less likely to suffer from stress, anxiety or depression when you have your own home.
Affordable housing benefits families – giving children a chance to settle into a school rather than having to move around all the time. They can also have more straightforward access to parks and community centres.
It also has economic benefits. If you are spending less of your income on exorbitant market-rate rents, you have more money to spend in shops, which benefits the broader economy.
Affordable housing even benefits the Government. Healthier people put less of a strain on the NHS. People who own or rent their own home do not require housing benefit, or paid-for temporary accommodation. They are less of a burden on local social services and the police.
But most importantly, having your own permanent home gives you pride. It makes you feel safe and secure. When you have your own home, you have the foundation for a better life. Affordable housing makes this possible for more people. That’s why it’s a good thing.
Affordable housing makes sense
It is worrying to read expert opinion that believes that the number of affordable homes provided in the UK is about to drop. The benefits of affordable housing are clear to see.
There are hundreds of thousands of families across the country that have been left behind by the property market. Affordable housing is the most effective way to make homeownership accessible to more people. We hope very much that if the new rules are brought in, affordable housing is still given prominence.