Tonic for tomorrow: proposals for a healthier UK property market
10 recommendations for a healthier UK property market
Countrywide, Hamptons International and Lambert Smith Hampton recently launched a joint research paper outlining 10 recommendations for a healthier UK property market at the MIPIM International Property Conference.
‘Tonic for tomorrow: Proposals for a healthier UK property market’ is a working document, which highlights the evolving structural problems in the UK property market and proposes possible solutions. The main aim of the research is to stimulate debate among leading practitioners, trade bodies, academics and government with the intention of arriving at a workable list of policies to improve the operation of our property markets in the future.
The proposals, set out in the table below, focus on; building more homes to accommodate a growing population, adding certainty and flexibility to the planning system, providing fairer property taxes and proposals to meet changing tenure trends.
Johnny Morris, Head of Research at Hamptons International comments: “The demographic, cultural and technological changes affecting the UK property market, many of which have accelerated in pace in recent years, will have a profound impact on how both residential and commercial markets work in the future. Our proposals are aimed at ensuring the property market operates efficiently and seeking out the fairest solutions to the changing needs of the country.”
1. Boosting the New Homes Bonus
Johnny Morris comments: “The new homes bonus has funneled £3.3bn to local authorities since 2011 and nearly six per cent of central government grant to local authorities will come from the new homes bonus in 2015/16. Linking local Government income and new home delivery could be a significant step towards creating local support for getting more homes built”
2. Redefining Greenbelt for modern needs
“The supply of new homes is particularly constrained in and around our growing cities. There are 80 railway stations in the Greenbelt on the fringes of cities across England, our research shows that there is enough unused land in areas within walking distance of those train stations to accommodate nearly half a million new homes. Given the chronic shortage of new homes in certain areas, we may not be able to afford to overlook these potential sites.”
3. Giving planners time to catch up with policy
“Over the last ten years the fundamentals of the planning system have been in a state of flux following reform by successive governments. Today only half of planning authorities have plans fit for purpose under the NPPF. Allowing time for planning authorities to catch up will allow us to see if the plan led system can work as intended.”
4. A new more permanent permitted development right (PDR) for office to residential conversion
“While evidence of the impact of PDRs is mixed, headline take up has been high. However the time limit on the current right and constraints on changes to buildings means that few schemes falling with the PDRs have progressed. Allowing under utilised office space to be converted to housing without the need for full planning consent provides a welcome boost for housing delivery, while removing obsolete office space.”
5. Helping the high street by widening the retail use classes
Oliver Du Sautoy, Head of Research at Lambert Smith Hampton comments: “We are in favour of the DCLG’s proposal to both broaden the retail use class and allow change of use from retail to leisure via permitted development rights, for example changing record shops to coffee shops. While greater flexibility of use will not by itself arrest the decline across many of our UK high streets, policy should at the least provide a means for businesses to adapt more quickly to local demand and promote footfall back into our town centres.”
Reforming business rates
Oliver du Sautoy comments: “We want to see to see a business rates system which is both a fairer reflection of prevailing market conditions and provides stronger support for small businesses. We believe that increasing the frequency of revaluations from five to two years, exempting small businesses entirely from business rates and allowing local authorities to set rate relief areas within town centres would be a significant step towards a fairer system.”
7. Reforming council tax
Johnny Morris continues: “The revaluation of homes for council tax and addition of a new upper band made in Wales in 2005 offers precedent and learnings for how council tax in England might be updated. Our calculations show that updated bandings and the introduction of a new Band I could raise between £500m and £700m extra a year. We believe council tax reform offers a fairer and more practical alternative to a mansion tax.”
8. Stability and transparency for landlords and tenants
“Shifting tenure trends mean that private renting is increasingly becoming a longer term option not just for singles but for larger households too. The tools for servicing long term private renters are only just being developed and the government policy response so far has mostly been limited to attempts to stimulate institutional investment into a professional rented sector. More choice between standard tenancies for six months, one year and three years with transparent mechanisms for rental uplift would add certainty to the sector – for both landlord and tenant.”
9. Making build to rent viable
“Institutional investment into the private rented sector has a role to play both in improving the quality of accommodation, experience of renting and delivering new homes. Allowing local authorities to be more flexible with public land disposals, ensuring build to rent scheme are viable on scale, could be the key to significantly growing the institutional private rented sector. More flexible S106 agreements and conditions specifying schemes must be used for private rent would also be important tools.”
10 Sharing out shared ownership
“The shared ownership market needs to be simplified and opened up. Simplifying the re-sales market and ensuring those that manage to buy their home outright have the same rights as any other home owner are key steps to increasing the appeal of shared ownership.”
