Reception to the Housing and Planning Bill, laid before Parliament in October, has been mixed to say the least.
Reception to the Housing and Planning Bill, laid before Parliament in October, has been mixed to say the least. With provisions giving social housing tenants a Right to Buy, a 1% annual rent reduction in the social rented sector over four years from April and a pay-to-stay measure charging social housing tenants market rent, critics are warning that housing associations and social housing, could soon be a thing of the past.
In addition to this, the government is planning to build discounted starter homes on underused brownfield land for first-time buyers and unlocking public land for new homes, which is likely to further reduce the land available for social housing. Some argue that these measures will not solve the housing crisis. The National Housing Federation, which represents social housing providers, described the scheme as “yet another short-term initiative that fails to address the root of the problem.”
In order to reduce the cost of such homes, developers will also be exempt from the need to build affordable housing for rent, another concern to supporters of social housing.
However, proponents of the Bill and other similar policies from the government see a mechanism that encourages greater social mobility. New starter homes and the pay-to-stay scheme will encourage social aspiration.
Whether that is actually the case remains to be seen. For now the real winners are developers who will be given further access to underused brownfield land.
Designated applications and the proposed relaxation of current planning processes to allow for approvals in principle will arguably complement the anticipated policy shift towards increased private housing stock.
Figures released by the National House Building Council in the last quarter of 2015 showed that residential housebuilding in the private sector in particular, continued to show a steady increase throughout the year. The first ten months of 2015 showed a 10% increase on the previous year as private developers began work on existing land banks confident that more stock will soon become available in the public sector. As a result, 2016 may well see the return of the secondary trading market phenomenon in housing as developers and investors flip sites to each other to restructure their own land banks.
With all of this activity comes the need to protect the value of the underlying asset from inherent risks such as title defects which could frustrate or delay development. Developers will also need to be cautious about objectors using title issues such as restrictive covenants and minerals rights as a pre-emptive strike to force a ransom scenario or to curtail projects. Judicial review may become increasingly important if the autonomy of new planning processes are called into question and so insurance for this risk will also become a fundamental consideration for developers.
It is at times like these that title insurance becomes a critical tool for unlocking and maintaining potential value in new development sites.
Attributed to Reema Manna, Senior Underwriter & Solicitor, Titlesolv
Titlesolv is the trading name of London & European Title Insurance Services Ltd authorised and regulated by the Financial Conduct Authority
Keywords: Reema Manna, Titlesolv, Solicitor, Developers, Bridging Finance, Loans, Housing, Planning, Commercial finance, National House Building Society