Last reviewed 18 July 2016
The Housing and Planning Act 2016 achieved Royal Assent on 12 May 2016, after being debated for almost nine months. Architect Stefan Mordue outlines the key aims of the Act.
The thrust of the new Housing and Planning Act 2016 is in creating new measures and provisions to increase both the creation and supply of new build starter homes helping the Government achieve its ambition of one million homes by 2020.
When introduced as a Bill by the Secretary of State for Communities and Local Government, the proposed legislation made provisions for first-time home buyers, right to buy, pay to stay, rent charges, rogue landlords, planning and compulsory purchase orders, as outlined below.
Housing supply and permission in principle
The Act aims to promote the supply of 20,000 starter homes, by placing a legal duty on councils to guarantee the delivery of starter homes on all reasonably-sized new development sites and promote these to first-time buyers.
New Starter homes are described as:
A “new dwelling, only available for purchase by qualifying first-time buyers, that is to be sold at a discount of at least 20% of the market value. It is also subject to any restrictions on sale or letting specified in regulations made by the Secretary of State”.
For the purposes of the National Policy Framework, “new starter homes” are now considered as “affordable housing” by developers under section 106 Agreements. The National Policy Framework defines “Affordable Housing” as “social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market”. The “market” is referring to the housing market which is the supply and demand for houses in a particular country or region.
Eligibility is determined with regard to “local incomes and local house prices”. Such housing is most commonly provided by housing associations through funding from the Homes and Communities Agency and section 106 agreements.
A duty is now placed upon planning authorities to actively promote the development and provision of starter homes within the planning system. Councils are to make reports available to the public that contain information about carrying out of its functions in relation to starter homes, such as response times to applications and details of how they have been dealt with. The Act places further duties on planning authorities to actively promote the development of self-build and custom houses, granting permission on “serviced plots” to support and double self-build and custom-build houses to 20,000 by 2020.
The Government has made £1.2 billion of funding available through the introduction of the “Starter Homes Land Fund”. The fund invites local authorities outside of London to form partnerships with the Homes and Communities Agency to use the fund to acquire, assemble and de-risk land for starter home developments. For details, see www.gov.uk.
Councils must ensure that they have a local plan, setting out plans on how many new homes they plan to deliver in 2017, otherwise the Government will ensure plans are produced for them. Figures released by Government suggest that almost 20% of councils do not have an up-to-date plan. While 82% of councils have a published local plan, only 65% have fully adopted them.
Home ownership and right to buy
Aspects of social housing are addressed by the Act by extending the “Right to buy” scheme by making grants available to housing association properties, enabling more people to own their own home. This is a measure that underpins the voluntary agreement with the National Housing Federation whereby the Government will make payments to housing associations to compensate for any discounts on offer. A number of housing associations, under a pilot “Right to buy” scheme, have enabled tenants to apply for their voluntary right to buy, on the understanding that once the Act became law, they would complete their contracts, see www.gov.uk. Also, this site helps people find the appropriate “Right to buy” scheme, see www.ownyourhome.gov.uk.
Pay to stay
A number of changes have been made that ensure housing is both managed fairly and is also fit for the future. Measures have been introduced that make it mandatory for local authorities to charge social tenants on high incomes or in particular areas with higher rent, known as “pay to stay”.
Findings of a consultation on Pay to Stay: Fairer Rents in Social Housing were published in March 2016.
The household income threshold is currently over £31,000 outside of London and £40,000 within London with households in receipt of Housing Benefit being exempt from paying a higher rate. Affected households will pay an additional 15p in rent for every £1 they receive in taxable income over the threshold.
The Government’s intention is to implement the mandatory “pay to stay” scheme from April 2017, with housing associations having discretion whether or not to implement the scheme.
There is a reduction in social housing regulation with the reduction of local authority influence over private-registered providers.
Tenancies for life are to be phased out: new secure tenancies will be granted for a period between 2 to 10 years, with the possibility of longer if the household has a child under the age of nine, offering a fixed-term tenancy until the youngest child turns 19 years of age. This only applies to council tenants. The tenancy can only be succeeded where the person is the tenant’s spouse or civil partner, or where he or she has lived in the house as his or her principal home at the time of the tenant’s death.
Planning and compulsory purchase orders
In a bid to prevent local authorities from being slow to produce neighbourhood plans, local planning authorities under the Act must make neighbourhood development orders and neighbourhood development plans “as soon as reasonably practice after the referendum”.
The Act brings about fundamental changes to planning law to speed up the planning process by using “Permission in principle” allowing local authorities to grant permission in principle for the development of land which is identified in local and neighbourhood plan or is identified on brownfield registers but subject to further technical consultation and details to be agreed by planning authorities. Brownfield registers will provide developers and house builders with up-to-date information on available brownfield sites.
The Act makes changes to the compulsory purchase system. A key change within the Act forces local housing authorities to consider selling “higher value” empty stock and pass income to the Secretary of State. The Government has committed to providing “affordable homes”.
Rogue landlords and property agents
The Act allows for local authorities to apply for a “banning order” where a landlord or property agent has been convicted of a banning order offence. The Secretary of State must establish and operate a database of “rogue landlords” which local housing authorities will be able to feed into.
Where a landlord has committed a certain offence (there is a table within the Act that lists the Act, section and general description of offence), a “rent repayment order” can be made ordering the landlord to repay an amount of rent paid by the tenant. The Act also allows a private landlord the ability to recover an “abandoned” premises without serving a section 21 notice and without serving a court order.
The Bill has not been without criticisms during its development. A number of amendments voted for by MPs were overturned using the new English Votes for English Laws. The new law-making process, introduced in the aftermath of the Scottish independence referendum, allows MPs for English constituencies to vote on issues that only affect England and have the power to veto the legislation before other MPs from across the UK can vote on the Bill’s final decision. Campaigners from Axe the Housing Act and Architects 4 Social Housing argue that the Act would make social housing unaffordable.
Timetable for implementation of the Act
Regulation SI 2016/733 brings into force various provisions of the Housing and Planning Act 2016 on three dates as outlined below. The provisions concerned include:
on 13 July 2016: sections of the Act regarding the voluntary right to buy, local planning, new towns, the power to quash decision to confirm compulsory purchase order and the right for local areas to request alterations to the planning system
on 1 October 2016: sections of the Act regarding neighbourhood planning, information about neighbourhood development plans and sustainable drainage
on 31 October 2016: sections of the Act regarding self-build and custom housebuilding.