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News & opinion

1 JUL 2019

Fix the housing system, not your legacy

"And three years on, there is still much to do"- Theresa May

When Theresa May came to office she listed housing as a priority. Her change of focus to housing across all tenures was a welcome change from the previous administration. However, as she gets ready to leave office, even she has had to confess that there is still much to do.

Brexit continues to drag time and resource away from domestic issues. Continued cabinet shuffling and housing ministers with short shelf lives has not reflected an administration with housing at its heart.

Both the prime minister and current housing secretary, James Brokenshire, have reflected the government's achievements on housing and what their administration leaves on housing and the legacy their administration leaves on housing.

May and Brokenshire congratulated themselves on increasing home ownership for first time buyers and the success of help to buy. With help to buy set to finish in a few years, the industry awaits announcements of new schemes aimed to help those wishing to buy their first home.

The government's self-declared home ownership growth achievements are commendable, but they must be seen as part of the wider market. Home ownership amongst 35-44-year olds is still below the pre-crash rate of 71%. While owner occupier is still the largest tenure in this age group, within the same demographic those in the rental sector have grown from 13% to 28% in the last 10 years.

As May prepares to leave off, many housing issues linger. Homelessness, unaffordable land, lack of regulation within the Private Rental Sector (PRS) and house ownership still not within the grasp of generation rent, housing is not the vehicle to fix or better reflect her legacy.

Private Rented Sector

The ambition to bring greater standards to the industry has been advocated by RICS, supporting the Tenants Fees Bill and sitting on the Regulation of Property Agents (ROPA) working group.

The government must not reform the PRS in haste, especially around evictions and section 21. With around three quarters of tenancies still being ended by tenants. The PRS has always been a careful balance between landlords' and tenants' rights and obligations and we would not support any moves that unbalance the system. The current court process after a section 8 notice has been served is an issue which exacerbates the problems of landlord's removing tenants. RICS's support for the removal of section 21, will be dependent on thorough changes being made to the current section 8 process, including a more comprehensive schedule 2 and the full streamlining of the court process to make it a viable alternative.

In principle, RICS supports Brokenshire's announcement of tenant deposit passporting. However, we await and welcome further details.

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Social housing

Following the prime minister's speech, Brokenshire committed long-term funding to the social housing market by announcing a £2 billion commitment through to 2028-2029. The provision of long-term funding, and the removal of the housing cap for Local Authorities should facilitate the building much needed homes, particularly for the most vulnerable.

We await the follow up to the social green paper, with the prime minister announcing an action plan due in September 2019. The government must look at implementing reforms or the removal of right to buy, if it realistically wants to achieve social housing demand.

Building better, building beautiful

Housing affordability has moved beyond the reach of many. The construction sector for residential is part of the challenge: it is characterised by low productivity, variable quality, output lagging behind target, and slim margins for builders.

Current building standards are not producing or holding builders to a standard that those within society expect. A full review of building standards is needed, not just into how they apply space standards. RICS would like to see a better regulated industry, that provides transparency of what standards consumers should expect as well as clear and simple access to redress. We will be submitting a response to the new consultation into new build redress.

Furthermore, we would ask government to allow and encourage innovative thinking within building, including efficiency in space that reflects changing needs of housing.

As well as building standards we would encourage the next government under the new prime minister to include a focus on offsite manufacture and Modern Methods of Construction (MMC). This would represent an opportunity to address many of these issues in addition to increasing capacity and investment in the industry. The faster delivery of MMC newbuild, when compared to traditional builds will benefit the social housing sector, as rental cashflow comes onstream sooner. Many housing associations are already utilising this new technique to deliver much needed housing, with some setting up their own production units.