Latest Public Sector News

07.10.15

Cameron scraps rules that require developers to build affordable homes for rent

Prime minister David Cameron promised scrapping planning rules that require property developers to build affordable homes for rent in his speech at the Conservative conference today (7 October).

The pledge is part of a bid to increase the amount of homes for first-time buyers in an effort to shift from ‘generation rent’ to ‘generation buy’.

He hopes that the move will unblock UK housebuilding by sweeping away demands that developers should provide a certain amount of affordable housing to rent as part of new developments.

Cameron said: “When a generation of hardworking men and women in their 20s and 30s are waking up each morning in their childhood bedrooms, that should be a wake-up call for us. We need a national crusade to get houses built.

“That means banks lending, government releasing land and, yes, planning being reformed.

“For years politicians have been talking about building what they call affordable homes, but the phrase was deceptive. It basically means ones that were only available for rent. What people want are homes they can actually own.”

He went on to call the move a “dramatic shift in housing policy”.

Cameron will work alongside Zac Goldsmith MP to implement these changes.

The reform will see ministers changing the definition of affordable housing to include starter homes as well as properties for rent.

It will be a key part of the government’s target of building 200,000 starter homes until 2020, as well as building low-cost homes for first-time buyers under the age of 40. The measure will also mean developers will fulfil their obligations towards councils as long as they build homes for purchase.

The scheme will mean houses must be 20% below the market rent, capped at £450,000 inside London and £250,000 outside.

These reforms follow a proposal by the National Housing Federation (NHF), which secured a deal with communities secretary Greg Clark MP, to extend Right to Buy to housing association tenants.

Cameron called this a “breakthrough policy” that will see the first tenants buying their homes from next year. Under the deal, ministers will circumvent legislation to extend the scheme to 1.2 million housing association homes. These associations would then voluntarily agree to sell their homes to any tenants who want to buy them.

The centrepiece of the ‘voluntary’ aspect of the move is that associations would not be compelled to sell stock under legislation, but instead entering a voluntary arrangement with the government – thus maintaining the independence of the sector.

Despite this, a government spokesman has said that if housing associations do not comply with the policy, Whitehall will “bring forward measures forcing them to offer it to tenants”.

(Top image c. Isabel Infantes, Conservative Conference 2014)

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