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Government reveals plans to fix ‘broken housing market’

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The government has admitted the housing market in England is ‘broken’ as it published its highly-anticipated white paper promising more homebuilding and help for renters.

Communities Secretary Sajid Javid told the House of Commons the broken market was being felt by “real people in every community” and was “one of the biggest barriers to social progress this country faces”.

He said relative to population size, Britain has had Western Europe’s lowest rate of house-building for three decades.

Javid said to meet demand, between 225,000 and 275,000 homes would need to be built every year.

Today’s white paper included measures to increase and speed up house building.

The government wants to streamline the planning system and give local authorities more power to hold developers to account if they have secured planning permission but do not use it.

Councils and developers will also be expected to use land more efficiently by building higher where there is a shortage of land and in locations well served by public transport such as train stations.

The high cost of renting was also tackled in the white paper.

Plans to combat this include ensuring more longer-term tenancies are available in private rented schemes to provide more stability to families renting.

Other measures outlined in the paper include:

– An ambition to release surplus public land with capacity for 160,000 homes during this Parliament.

– Consulting on the principle of a new, standardised way of calculating housing demand to reflect current and future housing pressures. Every local area will need to produce a realistic plan and review it at least every five years.

– Securing timely connections to utilities so this does not hold up getting homes built

– Backing small and medium-sized builders to grow, including through the previously announced £3bn Home Building Fund. The fund will provide £1bn of short-term loan finance targeted at SMEs, custom-builders and innovators to deliver up to 25,000 homes this parliament; and a further £2bn of long-term loan funding for infrastructure and large sites, unlocking up to 200,000 homes.

– Building more affordable homes to boost house-building and support households who are locked out of the market.

– Encouraging institutional investment in the private rented sector and promoting more modular and factory built homes.

– Consulting on a range of measures to tackle all unfair and unreasonable abuses of leasehold.

Commenting on the white paper, Richard Snook, senior economist at PwC, said:

“While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking. There appears to be no major new initiatives on tax, the greenbelt or enabling Local Authorities to borrow to build.

“Demand for housing in the UK has outstripped supply for more than two decades and we have been calling for measures to promote housing supply. We welcome the measures in the White Paper which may lead to a smoother planning system and promote increased building over the coming years.”

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