Housing Market: House Building and Leasehold Reform
(Limited Text - Ministerial Extracts only)
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The Secretary of State for Housing, Communities and Local Government (James Brokenshire)
Making sure the housing market works is a key priority for this Government. Today I am announcing a number of additional measures the Government are taking to ensure we deliver the homes this country needs and promote fairness for people, wherever they live.
The Government have set an ambitious target to deliver 300,000 homes a year by the mid-2020s. Last year more homes were provided than in all but one of the last 31 years. In September 2018, the Prime Minister announced an additional £2 billion to support long-term strategic partnerships with housing associations through to 2029. Today we are launching the bidding process for £1 billion of this funding through Homes England and are working with the Greater London Authority to launch bidding for a further £1 billion for housing associations in London as soon as possible. This marks the first time any Government have invested such long-term funding in new affordable homes through housing associations, supporting the development of more ambitious long-term plans to build the homes this country needs.
We are also announcing today that the Government will be providing £2.85 million to support the development of 19 new garden villages. These new communities stretch from County Durham in the north to Truro in the south-west and together have the potential to deliver 73,554 homes.
Planning is also a core part of ensuring we deliver our home-building ambitions but the process is currently too costly and decision-making takes too long. The forthcoming accelerated planning Green Paper must explore new approaches to meeting the cost of the planning service. We will invite innovative proposals to pilot new approaches to meeting these where this improves performance, including considering whether local authorities could recover a greater proportion of these costs and reinvest the additional revenue into improving the speed and quality of planning services.
The Government have also been clear that we must cultivate a housing market which provides people with the fair and decent housing they deserve. Yesterday, the Prime Minster announced that we will shortly be consulting on the removal of section 21 of the 1988 Housing Act. This will end so-called “no fault evictions”. As part of the consultation, we will also review the existing grounds for possession and provide additional grounds for when landlords need to move into or sell their property. We also plan to reform the court process for housing cases to make it more efficient, ensuring landlords can swiftly and smoothly regain their property where they have a legitimate reason to do so.
When moving home, some tenants struggle to provide a second deposit to their new landlord, while they wait for their first deposit to be returned. These tenants risk falling into debt or ultimately finding themselves trapped in their current home, missing out on the opportunity of finding a better place to live or a new job. We want to understand the scale of this problem, as well as seeking new approaches. That means tenants do not have to provide a second full deposit to move home. This could include approaches to allow tenants to directly “passport” their deposit between tenancies.
To protect the rights of homebuyers and hold developers to account when things go wrong, we also announced our intention to introduce a new homes ombudsman and, when parliamentary time allows, to legislate mandating that developers of new build homes belong to this ombudsman scheme. Today, we have taken a further step, and published our consultation to inform the proposed UK-wide legislation, including on the design and delivery of the ombudsman, the approval mechanisms and standards that it must meet and on whether a code of practice for developers should be underpinned in legislation. The consultation will run until 22 August 2019 and is available on the Government’s website here:
https://www.gov.uk/government/consultations/redress-for-purchasers-of-new-build-homes-and-the-new-homes-ombudsman.
We are also acting on our commitment to end exploitative and unfair leasehold practices which have no place in a modern housing market. Today, we are publishing our response to the technical consultation on reforms to the leasehold system. As announced in December 2017, we will legislate to ensure that unless there are exceptional circumstances, all new houses will be sold on a freehold basis. Through the consultation, we have also decided that:
Ground rents on future leases will be reduced to a peppercorn of £0, meaning leaseholders will no longer be charged a financial sum for which they receive no material benefit;
Freeholders on private and mixed-use estates will receive rights to challenge the reasonableness of estate rent charges and the right to apply to the first-tier tribunal to appoint a new property manager;
Freeholders and managing agents will be required to provide leasehold information within 15 days and set the maximum fee for providing this information at £200 (plus VAT).
Finally, we have previously said the new help to buy: equity loan scheme from 2021 will not be used to support the unjustified use of leasehold houses. Today, we are announcing that we are seeking to vary contracts with developers to ban the sale of leasehold houses, except in the rare cases where this can be justified, within the current help to buy scheme.
Taken together, this package ensures we make progress not just on delivering more homes, but on ensuring decent and fair housing for the people and communities that need them. This is an important part of helping communities to thrive, putting them at the heart of new developments and building a housing market that works fairly for all.
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