Housing White Paper 2017

The government’s much anticipated housing white paper 2017 has finally been handed down and it seems clear the government are keen to bring institutional investment to the rental market. A key point in the paper states that ‘Encouraging more institutional investors into housing, including for building more homes for private rent, and encouraging family- friendly tenancies.’

Should we be worried? Not necessarily, not unless you’re a rogue landlord, but it’s definitely something to have on your radar.

The 106-page  report goes on to state that more needs to be done to prevent homelessness, but predictably, the details of how this will be done, appears to be lacking. It goes without saying that in a country as wealthy as ours, we should do a lot more to help this issue.

All in all the white paper seems to have been watered down and we can’t pretend we’re anything other than underwhelmed with it. We’ve digested the long-awaited document and picked out the five key points for consideration.


  1. Longer tenancies

Perhaps the most radical and important announcement for landlords was that the government will now be encouraging “family-friendly” tenancies by ensuring they are longer-term. Currently more than four million households rent their home from a private landlord which, according to the white paper, is nearly twice as many as 10 years ago. Demand for rental accommodation is clearly sky high and the paper claims this is because it’s “nigh on impossible” for tenants to save the deposit for their own property. The government hopes longer tenancies will make renting safer and more secure.

In previous white papers there was still the provision for adding in break clauses, which meant that either party would be able to end the term before the three year period. The majority of tenants and landlords enjoy the flexibility that comes with renting, and fixing long-term contracts will somewhat hinder this freedom. More importantly, current tenancies across London average around 22 months, with very few ended by landlords. We therefore see fixing longer tenancies having little impact on how people view renting in London. Longer tenancies will only apply to rental homes provided by housing associations and institutional investors. However the government has stated that they will be working closely with the British Property Federation to “ensure these longer-tenancies become widely available”.


  1. Affordable rent

There was more good news for renters as the government announced they are now encouraging more investment in building homes for ‘affordable rent’, and will encourage councils to get more involved too. The paper defined “affordable rent homes” as 20% below market values.


  1. Mandatory electrical checks

The government also announced in the white paper that they were considering mandatory electrical checks for rented properties. More red tape for landlords?

At the moment the law provides an obligation for landlords to ensure that their electrical installations and equipment are safe. However other than in Houses of Multiple Occupancy (HMO) there is no requirement to produce a yearly or 5 yearly certificate in the same way that the rules are clear on gas safety checks. The vast majority of landlords care about ensuring their properties are safe and well maintained, but at present, there is too much confusion on what exactly their obligations are.

We always advised our clients to have an annual Portable Appliances Test (PAT) and a 5 yearly full electrical check, but unfortunately many landlords don’t do this and risk issues with their electrics during the tenancy.

According to the white paper, the next steps on these initiatives will be sent out by the government shortly.


  1. Get Britain building more homes!

The white paper starts with a passionate pledge from Prime Minister Theresa May: “We need to build many more houses, of the type people want to live in, in the places they want to live… This will slow the rise in housing costs so that more ordinary working families can afford to buy a home and it will also bring the cost of renting down.”


So what exactly are the government’s plans to encourage house building and deliver 1 million new homes by 2020 as they promised pre-election:

  • “We will encourage housing associations and local authorities to build more.” Councils will now be required to come up with a 5 year housing plan based on the housing need in their area, and face an annual audit to ensure they’re hitting targets.
  • “Ensure that homes are built quickly once planning permissions are granted.” The time permitted between planning permission and the start of building is being reduced from three to two years.
  • “We will diversify the housing market, opening it up to smaller builders and those who embrace innovative and efficient methods.” A £3 billion fund is to be created to encourage small firms to build more houses
  • “Finally, because building the homes we need will take time, we will also take more steps to continue helping people now, including by improving safeguards in the private rented sector, and doing more to prevent homelessness and to help households currently priced out of the market.”


  1. Lifetime ISA & Starter Home Initiative

The government may have ditched their “ownership at all costs” mantra, but the white paper still announced new measures to help renters get a foot on the property ladder. In April 2017, the Government will introduce the Lifetime ISA, which will come as welcome relief to the increased tax burden on the nation! This ISA will help renters save for a deposit, entitling them a 25% bonus on up to £4,000 of savings a year. Their savings and the bonus can be put towards a deposit for a home, or withdrawn when they reach 60.


In addition to a Lifetime ISA, the white paper also declared that they will be launching the Starter Homes Initiative. The scheme will help first-time buyers under the age of 40 to buy a house with a 20% discount on market rates. Buyers are only eligible for the scheme if they have an income of less than £90,000 in London or £80,000 elsewhere in the UK.


  1. The Green Belt battle

To build or not to build on the green belt, that is the question! The much heated discussion has been raging for quite some time, with many MPs arguing that building on the green belt was necessary to free up the space the country needs for house building. The white paper has ended the debate, confirming that Green belt protection will not be weakened apart from “exceptional circumstances.” As Housing Minister, Gavin Barwell, said: “The green belt is 13% of the land. We can solve this crisis without having to take huge tracts out of the green belt.”