Government plans to tackle the housing crisis are not without risks

The government has unveiled two further initiatives to help tackle the housing crisis in England, the First Homes scheme which launched earlier this year, and plans to help people build their own affordable housing.

The First Homes scheme is offering home builders and developers of new-build properties the chance to bid for a share in a £150 million package offering plots of land for sale. In doing so the government aims to deliver 1,500 homes across the country by March 2023.

The scheme will then offer homes to first-time buyers and key workers at a discount of at least 30% of the market price to help them access the property market. Work began earlier this year on the flagship First Homes sites in Bolsover, East Midlands and Cannock, West Midlands, with Keepmoat Homes and Vistry Partnerships heading up the developments.

Peter Freeman, Chair of Homes England, said:

“The Early Delivery Programme is a great opportunity for housebuilders, housing associations and the wider development sector to get to grips with First Homes. We look forward to working with partners to help aspiring homeowners realise their ambitions and own their own home.

 “Councils will also be able to prioritise the homes for keyworkers such as nurses and teachers who have been looking to get on the housing ladder while supporting their community throughout the pandemic.”

Housing Secretary, Robert Jenrick also commented on the scheme:

“It is great to see the First Homes scheme gaining momentum and I am happy to invite house builders to deliver this flagship house building programme across the country.

 Lenders have already seen the first mortgage applications come in as more homes come onto the market. It will support local communities and give local people a greater chance of getting on the housing ladder and having a place which they can call their own.

 Just as importantly, homebuilders of all shapes and sizes will now be able to benefit from this scheme while helping first-time buyers and key workers onto the property ladder.”

Jenrick has also welcomed plans set out in Richard Bacon MP’s review of self-build and custom housing which aims to make the industry more accessible and affordable. The review, commissioned by the Prime Minister, recommends a major scale-up of self-built homes to boost the housing supply across England and could potentially deliver 30-40,000 more homes every year. The government is also providing funding for local councils to create high quality serviced plots that are ready to go, allowing homes to be built in weeks that are better designed, built to the highest environmental standards and with cheaper household bills.

Both the self-build review and the First Homes scheme come following analysis that the government has continually failed in delivering its promise to build 300,000 new homes per year until 2028. Reports show that the current rate of development is sitting around the 200,000 per year mark, a rate which is projected to continue unless action is taken.

“The government knows full well how bad the housing situation in the UK is, and they also know that delivering 300,000 new homes every year is a monumental task, not least at a time when global and local economies are in such flux following the pandemic”, said James Forrester, Managing Director of StripeHomes property developers.

“But if we’re waiting until 2028 to reach this much-needed target, we’re waiting far too long, especially when England alone currently has over 93,000 households in temporary accommodation and 1.1 million households currently on the waiting list for a social home”, he added.

But the self-build review and the First Homes scheme are just the latest in a number of initiatives set out by the government to combat the housing crisis. The Help to Buy and the 95% mortgage guarantee schemes will help purchasers on to the property ladder, but this doesn’t solve the housing shortage.

To deliver new homes faster, the house building process “needs to be modernised” and that “even if the homes can be built, the UK sorely lacks the skilled labour to deliver them,” a spokesperson for Nationwide Building Society explained.

“At the centre of this is a need to create the modern skills and expertise required to build homes that are fit for the future and to develop supply chains that can handle volume and quality – from local to national firms” they added.

In a recent consultation paper the government acknowledged the need to attract new and smaller home builders to the market because the problems, it says, are with the lack of available developers. Additionally a relaxing of planning regulations that removes the need for developers to submit full planning applications is expected to ease the process for developers and local authorities alike.

Housing Secretary, Robert Jenrick, said that the move to relax planning would help cut out “unnecessary bureaucracy to give small business owners the freedom they need to adapt and evolve, and to renew our town centres with new enterprises and more housing”.

But the relaxing of regulations and entry of smaller developers and home builders to the housing market is not without risks, and some have questioned what the implications might be for developers if regulations change again and power is given back to local authorities.

Insurance can protect developers and home builders against a number of risks. LawSure Insurance offers a range of title insurance products for solicitors and their clients, including lack of planning permission indemnity insurance and contaminated land insurance specifically for home builders.

DISCLAIMER:  Nothing said in this article constitutes legal or other professional advice and no warranty is given nor liability accepted for the contents of this article. LawSure Insurance will not accept responsibility for any loss suffered in consequence of reliance on information contained in the article.