· To extend the “Help to Buy Scheme” until at least 2020
· To build 200,000 “starter homes” for first-time buyers under the age of 40 and a discount to 20% off the normal price
· To build Garden City Corporations
· Extending the government’s current “Housing Zone” policy
· To focus on a more pro—ownership and localised planning policy
· Halting the spread of windfarms
· To focus on a more home ownership property market.
· To extend the “Right to Buy” to Housing Association properties
The three main policies of the Conservative Party aimed at building further houses and increasing housing stock are the extension of the “Help to Buy Scheme”, the 200,000 discounted “Starter Homes” and the Garden City Corporations.
To extend the “Help to Buy Scheme” until at least 2020
In the 2014 budget, George Osborne announced that the “Help to Buy” Scheme will be extended until at least 2020. The extension applies only to the first phase of the scheme which related to new build homes. The “Help to Buy Scheme” has been heavily criticised as inflating house prices and aggravating the housing crisis more than helping by encouraging the upward spiral of house prices taking the option of owning a house further and further out of the reach of ordinary working people, especially those that are first-time buyers.
The extension of the Help to Buy scheme seems at odds to the Conservative Party’s own manifesto, where “buried in the detail” where under the heading “New Paths to Ownership” they propose: “an end to all mortgage subsidies-such as Help to Buy scheme and the “cheap money” policies that artificially suppress interest rates and push up house prices” ( http://www.conservativehome.com/highlights/2014/09/the-conhome-manifesto-part-1-homes-for-all.html). Such a contradiction suggests that firstly, they realise that the Help To buy Scheme has pushed up house prices and exacerbated the situation which begs the question as to why they have introduced the scheme in the first place and then continue to support it? Secondly, if they are publicly continuing to promote the scheme and pledge that they will continue with the scheme if they remain in government, and then in the small print stating that they aim to abolish such schemes, can they really be trusted not only in what they do, but also in their underlying motives?
To build 200,000 “starter homes” for first-time buyers under the age of 40 and a discount to 20% off the normal price
The “Starter Home” initiative will involve the building of 100,000 new homes to be sold at prices which are 20% below the market value. According to Government sources, the discount applies to be more than £250,000 outside London £450,000 in London.
The scheme will be restricted to first-time buyers under the age of 40 and who will be purchasing the property as their main residence.
The funding of the 20% discount will be achieved by allowing developers to reduce their costs by building on underused or unviable industrial and commercial land otherwise known as “brownfield sites”. A further concession to developers may be a relaxation of some of the planning and building regulations, although the government insists that the properties will still have to be built to a high standard.
One criticism is that it will be difficult to ascertain whether or not the 20% discount will actually be a real discount as the developments will consist entirely of starter homes on land which is less valuable than comparable non-industrial land, particularly when the value of a house is not simply in its “bricks and mortar” but is more related to the area in which it has been built and the number of people who wish to live in that area.
To Build Garden City Corporations
In 2014, George Osborne announced the government’s plan for a new Garden City in Ebbsfleet in Kent, where previous attempts at development have stalled. Ebbsfleet is to be the beginning of the government’s revolution in Garden Cities each with their own “Urban Development Corporation”.
Each Development Corporation will have powers to acquire, hold, manage, reclaim and dispose of land and other property as well as to carry out building and other operations. A development Corporation will also take on some of the local authority’s planning functions. It is proposed that each Garden City should have an elected mayor with local people having a direct financial stake in the corporation to the allocation of shares. The Garden City Corporations would not be imposed on communities but would be subject to approval by a local referendum. The Conservative Proposals for Garden City Corporations have been compared to the 27 new towns which were built across the UK in the post-war decades such as, Stevenage, Harlow and Milton Keynes.
The main difference between the Conservative Party Garden City policy from those put forward by the Labour Party and the Lib Dems is the focus on home ownership and the lack of provision or emphasis on social housing.
The Conservative Party’s policies aimed at reforming the Planning system are centered on increasing not only the supply of housing, but also on increasing home ownership as opposed to social housing. These policies include extending the government’s current “Housing Zone” policy, “Pro-Ownership Planning Policy”, “A Community-led” planning system and halting the spread of Windfarms.
Extending the Government’s Current “Housing Zone” policy
In March 2015 the government announced 20 new confirmed “Housing zones” outside of London (out of a total of 29 proposed sites outside London and 10 inside London), doubling the number of zones announced in 2014. Housing zones are designed to promote building on brownfield land. Under the Housing Zone scheme Local authorities and developers can bid for share of a £200 million government loan scheme to speed up delivery of homes on brownfield sites. In addition to the government loan scheme attached to housing zones some of the planning restrictions usually imposed on developments will be lifted. The lifting of restrictions relates to the restrictions imposed on developers in the section 106 Agreements that are attached to planning consents.
“A Pro-Ownership Planning Policy”
In their manifesto, the Conservative Party state that in their “Pro-Ownership” approach they aim to “freeze out speculators” by using state powers to actively favour home ownership over professional property investment by:
Introducing new powers to enable planning authorities to have the option to require that homes in a new development can only be sold to those intending to live in them
It is envisaged that this new power would only be exercised locally on a case-by-case basis and as a condition of the planning consent for new developments and can if appropriate, be used to specifically help first-time buyers or participants in a self-build scheme.
With the pro-ownership planning policy, can be advanced by related tax policies for example using higher taxes on professional property investment (for example, land banking developers) and using this money to progressively phase out stamp duty on ordinary home purchases
“A Community-led Planning System”
The Conservative Party want to change the emphasis on the planning procedure from an adversarial system where a planning application is made and then it is up to the Council and the local residents to object to a system whereby the council and the local residents decide what is needed and what they would like to see built in their area with the Developers then being allowed to bid for the development rights.
The Conserved party say that they will introduce a proactive planning system whereby the Local Plans and Community Plans are not only drawn up by the Local Authority but also with the full participation of local residents with final approval been through a local referendum. Councils would be given stronger powers to specified design to enable the development to remain in keeping the scale and character of the local area. It is envisaged that the resources for the initial urban design and architectural work would be funded by a small tax levied on the sale of local building land.
“Halting the spread of windfarms”
In their manifesto, the government have stated that they will end government subsidies for wind farms as they believe that there are now too many windfarms despite a lot of public opposition to windfarms. The Conservative Party make the point that we have now reached 10% of our electricity coming from onshore wind farms and are now at the point where additional windfarms and subsidies are no longer required.
Renewable energy campaigners dispute the statement that there is a lot of public opposition to windfarms and have pointed out that the government’s own figures through government implemented opinion polls have in the past shown that 60 to 70% of the British public are consistently supporting onshore wind. The renewable energy lobby makes a point that wind power is the least costly of low carbon methods of electricity generation, already powers millions of homes within the UK and as such it is illogical to exclude onshore wind especially as the government are struggling to meet the EU-based carbon restrictions.
Extending the Right to Buy to Housing Association Tenants
The Conservative Party’s main focus when looking at the property rental market is on private ownership and a privately run rental market.
The aim of the Conservative Parties to move away from the model of social housing and reliance on the state.
Having increased the maximum discount on Right to Buy properties to £75,000 for properties outside London and £100,000 for properties within London, the Conservative Party is proposing to extend the “Right to Buy” in their continuing campaign against social housing and reliance on the state. Currently the “Right to Buy” is only available to those tenants that rent properties from the local authority and those that live in properties that were formerly local authority properties but which were transferred to Housing Associations. The current proposals put forward by the Conservative Party to extend the “Right to buy” to all housing association tenants.
The proposal to extend the right to buy to housing association tenants is not a new proposal and has been mooted before several times. The main stumbling block to the success of the proposal is that housing associations are independent private companies, often with charitable status with a statutory duty to protect the value of their assets in order to meet their social goals and this does not fit comfortably with selling off properties at a loss. If housing associations are put under a special obligation to offer the “Right to buy” to their tenants, this is likely to result in a reduction in the investment of new properties by housing associations rather than an increase in investment into new properties. Housing associations are under no legal obligation to build though many do have large profitable property portfolios, and are unlikely to invest in building properties which they are likely to have to sell at a loss, as this does not fit comfortably with their statutory fiduciary duties under charity law to protect the charities assets and act in the best interests of the charity.
The government are confident that the problem of the housing associations being barred from selling properties at below market value under their fiduciary duties under charity law legislation can be overcome by the government reimbursing the housing Association for the value of the discount offered to the tenant, thus in effect the housing association would be selling the property to the tenant at the market value with the government providing the difference in value between the market value and the discounted price (reported to be around 30% of the market value). Such a proposal will involve a significant public investment into property which is unlikely to provide a return. The government proposed to finance the government subsidy that will be involved in extending “Right to buy” to housing association tenants, this with the funds raised by selling off the high value council properties as mentioned below.
The proposal to extend the “Right to buy”, to housing association tenants is seen by many as the last “nail in the coffin” of social housing particularly in light of the fact that it is estimated that one third of all properties sold by local authorities under the “Right to Buy” is now in the hands of private landlords. The idea that sufficient funds will be raised by extending the “Right to buy” to housing associations will be sufficient to replace the property sold under the “Right to buy”, on a one-to-one basis, has yet to be proved particularly in light of the track record of the current right to buy provisions.
Forcing Councils to sell the most valuable properties from the remaining housing stock
From this month (April 2015) local authorities are required to publish the most recent valuation of their social housing stock. The purpose of this policy is to ensure that local authority housing stock is being put to best use. The information is to be published by postcode listening how much the properties are worth, how many are occupied, how many are standing empty. On the surface, the purpose of this requirement is stated to be to enable people to ask questions of how the council is managing their housing stock, however in reality it is aimed at the proposed government intention of forcing local authorities to sell their most valuable properties ostensibly to raise funding for councils to build more homes and thus reduce council house waiting times. On the www.gov.uk Website, an example is given of a property in Southwark which the council was able to sell for £3 million, money which helped to fund the building of 20 new council houses across the borough. Eric Pickles states that other councils across the country could follow suit which leads one to wonder whether or not he is aware of the difference between the London Property market and the property market in the rest of the country.
Local Authorities and housing associations will be made to show that they are managing their housing stock in the most efficient way possible by selling off the most valuable empty council houses before they are able to secure grants from a new multi-billion pound housing fund. The policy to make Local authority sell-off their valuable properties comes after research showed that more than a fifth of council house tenants in England lived in homes worth more than the average privately owned home in the same area. The main criticism of the policy is that it will lead to a type of “social cleansing” of low-paid workers gradually being moved out of more expensive areas.