‘Fixing our Broken Housing Market’ white paper – a summary for landlords
In February, the Government published its housing white paper, ‘Fixing our Broken Housing Market’ on the Department for Communities and Local Government website. The white paper, which focuses on England, notably shifts the Government’s focus from home ownership towards promotion of rental schemes and the construction of affordable housing developments.
The white paper includes numerous provisions that will be of specific interest to residential landlords, set out in the following chapters:
– Chapter 3: ‘Diversifying the Market’, sections 3.19 to 3.23
– Chapter 4: ‘Helping People Now’, sections 4.31 to 4.33
The following key points provide a useful summary for landlords of the whole document:
- A key objective of housing policy is to build new homes with the aim of making purchasing and renting more affordable.
- The Government wants to attract new investors into residential development such as institutional investors, including for building homes for rent.
- The Government is looking at innovative ways to fund housebuilding, including the pooling of government pension funds.
- The paper illustrates the financial struggles of many private tenants, with mean weekly costs to privately rent often being twice that of buying a home with a mortgage.
- The Government is calling upon lenders and institutional investors to back developers in building more homes, including those for private rental.
- The Government wants to make rent ‘fairer’ for tenants, including family friendly tenancies of three-years or longer for new-build homes.
- The paper reinforces objectives of the Government’s Private Sector Rental Task Force and the focus on ‘Build to Rent’. The Government has supported construction of the £3.5 billion Private Rented Sector Housing Guarantee Scheme, and the £1bn Build to Rent Fund.
- The main concerns of tenants in the private rental sector include affordability and security. The Government plans to address affordability by building more homes and introducing a ban on passing letting agents’ fees to tenants.
- The Government will issue a consultation in 2017 prior to introducing legislation to ban the passing of letting agents’ fees to tenants.
- The Government will continue to drive safety standards in the private rental sector, including the issuing of banning orders to remove the worst landlords from operating
- The Government is considering whether social lettings agencies could be an effective tool to secure tenancies for vulnerable tenants and provide security to both tenants and landlords who take on such tenancies.
The Government will consult on various aspects of the white paper, mainly around planning and housebuilding – as set forth on page 70 of the document – but not on the above sections 3 and 4 which are most relevant to current and future residential landlords. The consultation is running for 12 weeks, until 2nd May 2017.