Housing Zones

The announcement this week of the new Housing Zones is interesting and welcome, but what does it mean for the housing industry? Here is a summary of the proposals.

  • 20 Housing Zones will be created in the capital, aimed at delivering 50,000 new homes
  • Each Housing Zone should deliver at least 1000 homes mostly within the 2015-18 period
  • The Housing Zones will be backed by Mayoral powers to ‘smooth planning’
  • Local Authorities can bid for the zones which will attract funding from a £400m pot
  • 10 Housing Zones will be created elsewhere across the UK with Local Authorities bidding for a £200M pot
  • Bids for funding need to be made available through private sector companies such as developers or RHP’s, not local authorities themselves
  • The deadline for funding bids is the 30th of September 2014

All these Housing Zones will be on brownfield sites, and the funding will be focused on bringing forward schemes that are already well advanced.

Interestingly, given Nick Boles recent letter to Boris, complaining about how different London standards are from National Standards, and that London should get in line,  the announcement includes the following statement…

All new homes in Housing Zones will need to be built to high quality standards, with policy-compliant levels of environmental performance and the Mayor will expect them to conform to the London Housing Design Guide.

Good transport links are deemed a necessity for Housing Zones, either with good infrastructure already in place, or planned, or capable of being brought forward with funding assistance. Most Housing Zones are expected to be in Opportunity Areas

Planning powers such as Planning Performance Agreements, Compulsory Purchase Orders & Local Development Orders will be used to speed up the planning process.

It is anticipated that Private Rental Sector development will form a part of development in Housing Zones, as well as high levels of affordable homes and shared ownership are expected to be delivered. Homes for private sale will be expected to be marketed to London buyers primarily.

A London Housing Bank may assist in providing front funding for new development of sub market rent homes.

It is possible that the Mayor could buy the land using CPO powers and prepare the site for development, offering serviced plots to developers to build out. This is a model used in other European countries to fast track development on large scale brownfield land, such as in Malmo and Hammerby.

All in all this is a positive step and aims to enable London Boroughs to work with the GLA to accelerate the delivery of new housing on sites that can have or already have good transport links. The model has worked elsewhere so one has to wonder why it has taken so long for it to be used here?

It will be interesting to see whether the London Boroughs will follow political lines and work with the Mayor or not, and whether the same London Boroughs will work closely with Developers rather than Housing Associations.

What it does mean is that there will be substantially more development happening in the region in the years 2015-18 than would otherwise be the case, with at least 20,000 units being delivered through this mechanism. With the housing industry already struggling to meet current delivery targets and labour and skills shortages across the sector, there is a lot of work to be done in the background to accelerate training and recruitment across the sector to deliver these requirements.

The prospectus is less clear on the plans for Housing Zones outside London, with a statement that DCLG will publish a prospectus for this later in the year.

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