This month the government have announced planning reforms to help satisfy the ever growing demand for houses and help create a more dynamic economy.
The UK has struggled to keep up with the increasing demand for new homes. This harms productivity and it frustrates the ambitions of thousands of people who would like to own their own home. The new reforms aim to change this and enable people to buy homes that they can afford.
The new reforms include the following key changes:
- Introduction of a new zonal system for brownfield land
In the current system many brownfield sites have to go through a lengthy and detailed process in order to gain planning permission. The new reforms aim to remove these often unnecessary planning obstacles by creating statutory registers for brownfield land suitable for housing in England, as well as legislating to grant automatic planning permission in principle on brownfields sites identified on those registers (subject to the approval of some technical details).
- Taking tougher action to ensure local authorities are using their powers to get Local Plans in place and make homes available for local people
This includes the publishing of league tables, setting out local authorities’ progress on providing a Local Plan for the jobs and homes needed locally as well as streamlining the length and preparation process of Local Plans.
- Bringing forward proposals for stronger, fairer compulsory purchase powers, and devolution of major new planning powers to the Mayors of London and Manchester
The proposals include allowing the Mayor of London to call in planning applications of 50 homes or more, as well as allowing the Mayor of Greater Manchester to produce Development Corporations and promote Compulsory Purchase Orders.
- Extending the Right to Buy to housing association tenants, and deliver 200,000 Starter Homes for first time buyers.
The Government maintains its commitment to deliver 200,000 Starter Homes by 2020, at a 20% discount for young first time buyers. In order to deliver this commitment the new reforms propose to extend the current exception site policy and strengthen the presumption in favour of Starter Homes developments as well as require local authorities to plan proactively for the delivery of Starter Homes. The government will also extend the Right to Buy opportunity to tenants of housing associations through the Housing Bill.
- Restricting tax relief to ensure all individual landlords get the same level of tax relief for their finance costs
The current tax system supports landlords over and above ordinary homeowners. Landlords can deduct costs they incur when calculating the tax they pay on their rental income. The new reforms will restrict the relief on finance costs that landlords of residential property can get to the basic rate of tax. This restriction will be phased in over 4 years and will reduce the distorting effect the tax treatment of property has on investment.