Category

Real Estate & Construction
•December 19, 2022•

Premises Licences: A Valuable Asset

Premises Licences: A Valuable Asset

Author: Gina Sandhu

Key Contact: Rob Morgan

Valuable Asset

In the current climate with businesses struggling to stay afloat and strict council licencing rules, the status of a premises licence is of even greater importance than it had been previously.

It was only a couple of months ago that Westminster City Council refused an application by Greggs to sell food and drink in their Leicester Square store from 23:00 until 05:00. It was blocked over worries that businesses serving 24/7 could become a ‘hotspot’ for trouble.

This has meant that businesses with a premises licence, such as Duck & Waffle, have become even more valuable as, for example, there are few high-end bars in Central London that can serve alcohol 24 hours on the weekend. It is imperative that both a landlord and a tenant know how to protect such an asset.

What is a premises licence?

Under Licensing Act 2003 (the Act), premises are required to be licensed if a tenant wishes to carry out any of the following activities at a particular venue:

  • the retail sale of alcohol (on or off the premises);
  • regulated entertainment (plays, films, indoor sporting events, live/recorded music or any performance of dance); and
  • the provision of hot food or hot drink between 23:00 and 05:00 on any day.

The premises licence can remain in place for as long as the premises exists, unless the premises licence is, for whatever reason, terminated or surrendered.

How can you protect your premises licence as a landlord?

As a landlord, you should ensure that any premises licence that benefits your premises has not lapsed or been revoked.  For prospective tenants, it may be essential to their business that the premises they propose to lease from a landlord has a premises licence, so that they can, for example, sell alcohol. If a premises licence is no longer in place, a prospective tenant may be encouraged to look for other premises which benefits from a premises licence, as the application process for a new premises licence can be time-consuming and there is no guarantee that one would be granted. It would be quicker and easier if the landlord were able to transfer an existing premises licence to the tenant.

In addition, a valid premises licence could add significant value to your premises, especially in areas such as Westminster where the council is incredibly reluctant to grant new licences. Therefore, potential tenants could be willing to pay a higher rent to hold a premises licence with favourable terms (for example, being able to sell alcohol past 3:00am, as such a premises licence may not be easily granted by the council again).   

It is also imperative that the prospective tenant is trustworthy and has solid references, because once a premises licence has lapsed or has been revoked, it can be very difficult for it to be restored. For example, 7 Seas Grocery Store (previously trading as One Nation) in Westminster, had their premises licence suspended because they sold alcohol past their permitted hours and their application to transfer the premises licence to a new tenant was deemed invalid. The business applied to Westminster Licensing Authority to review the case on the basis that the owner did not understand the conditions that were attached to the premises licence and was also unaware that a review application had been submitted. However, the council’s sub-committee decided that the punishment should be harsher than the premises licence being just suspended, and the premises licence was subsequently revoked. The council made it clear should the owner make an application for a premises licence, he would need to, at a minimum, prove that he understood what the responsibilities of a licence holder were and would also have to provide evidence that all the people connected with the sale of alcohol from the premises had completed very thorough training. This would be time-consuming and expensive for a landlord to undertake, and there would be no guarantee that a new application would be successful.

Transferring a premises licence to a tenant

It is important that a landlord ensures that any premises licence that benefits their premises is safeguarded when being transferred. The impact of the Covid-19 pandemic, for instance, has resulted in the closure of many premises. As a landlord, it is recommended that you apply for a ‘shadow premises licence’ to protect the premises licence in the unfortunate circumstance that the tenant licence holder becomes insolvent or bankrupt. A shadow premises licence will sit behind the existing premises licence and is typically granted on the same terms as the existing premises licence. If a premises licence is subsequently lost by the tenant, the shadow premises licence could then be used.  It is, essentially, an insurance policy for a landlord.

A landlord should ensure that any lease granted has premises licence provisions that sufficiently protects the landlord.  Such provisions could, for example, require the tenant to seek landlord’s consent for any variations the premises licence. A lease could also include a provision that would oblige the tenant to transfer the premises licence to the landlord once the lease comes to an end.  This would provide the landlord with control and protection over the premises licence.

How can you protect your premises licence as a tenant?

As a tenant, it is also important to protect your premises licence as the licence holder. When inspecting new premises, you should check that the premises licence is in force and that a new application does not need to be submitted. If the previous tenant has left the premises due to bankruptcy, then there is a greater risk that the premises licence may no longer be valid. This could dramatically affect your profit margins if your business relies on the sale of alcohol. The tenant can check the status of the licence with the local authority.

A tenant should also check that the terms of the premises licence, the operating plan and the layout plan correctly reflect the layout of the premises or have been updated should the layout of the premises have changed since the premises licence was granted. This ensures that the tenant can accurately determine the value of the premises licence and can be satisfied that the terms of the licence match their business needs.

How is the current climate impacting businesses which need premises licences?

Businesses are slowly recovering from the effects of Covid-19 and some have been looking to expand and occupy additional premises. However, post-Covid-19 has also seen more local residents being vocal and submitting complaints about the opening of new licenced premises in the area, especially if they think the premises may encourage noise issues, crime and general disruption. Greggs’ application to serve 24/7 in Leicester Square, as mentioned earlier in the article, attracted several complaints, as it was feared that extending Greggs’ licence could “undermine the licensing objectives in relation to the prevention of crime and disorder“, according to the Local Democracy Reporting Service.

Small business owners have also been hit hard by the cost of living crisis as they’ve been affected by soaring energy prices and rising inflation. Increasing inflation has led to businesses having to pay more for materials, products, and stocks and as demand increases, this can also cause supply chain issues and staff shortages. Consequently, the optimism businesses had at the start of the year for growth, has taken a turn as businesses now need to save money and ease the pressure if they are to survive. Many are doing this by pausing growth plans and putting off expansion. Therefore, with expansion plans being put on hold, the demand for properties with premises licences has lessened as businesses are trying to conserve cash and are not seeking to hold any new premises licences in the near future.

Overall, a premises licence is granted to the premises and not to the Landlord, so having a valid premises licence will increase the value of the premises. However, a revocation of a premises licence could, in turn, decrease the value of the premises. Therefore, it is crucial that you ensure that such a valuable asset is protected and in the hands of someone you trust. Failure to do this can result in a loss of profit and as we have seen from Westminster City Council, punishments can be severe.

For further information or advice, please reach out to our Real Estate Team or speak to Rob Morgan.

•June 15, 2022•

Ground-breaking change: The Leasehold Reform (Ground Rent) Act 2022

Ground-breaking change: The Leasehold Reform (Ground Rent) Act 2022

Author: Stephanie Pugh

Key Contact: Liz Gibbons

The Leasehold Reform (Ground Rent) Act 2022 (“the Act”) is said to be the starting point in a significant overhaul by the government of the heavily criticised leasehold system. The Leasehold Reform (Ground Rent) Act Bill received Royal Assent on 8 February 2022 with its provisions set to become enforceable from 30 June 2022.  Leasehold minister Lord Stephen Greenhalgh has branded the change as an ‘important milestone’ in ‘making the dream of homeownership a more affordable reality.’

In a nutshell, the Act faces the issue of unreasonable ground rent head on, banning ground rent charges on the majority of new residential leases in England and Wales. Under the Act, ground rent will be limited to a ‘peppercorn rent’ which, in contractual terms, is a token of consideration with no financial value.

The Act comes as a welcome change in an area heavily criticised as open to the abuse and extortion by landlords of freehold properties, and a heavy restriction to those struggling to get on the property ladder. The changes have become all the more necessary in recent years as long-leasehold ownership has increased in popularity in new build properties and flats, whichoften require further maintenance obligations to the landlord which is not required by freehold ownership.

The logistics: Uncovered Ground

The Act will not apply retrospectively (unless in the case of a lease surrendered and regranted), and tenancies existing before the enforcement date can continue to impose ground rent charges.  However, up until the provisions become legally enforceable, the Government are encouraging landlords of new leases to reduce ground rent to zero and encouraging tenants, respectively, to speak to their landlord and negotiate a ground rent that reflect the changes.

The Act is likely to have little effect on developers, as the changes here are somewhat making official what is now considered standard practice in certain areas. Developers particularly have been using conventional ground rents for some time.

Furthermore, the Act in its current form will unlikely shake up the majority of commercial tenancies, as business tenancies are excepted from the Act, sicking to the traditional ‘at arm’s length’ involvement by the Government and the Courts in commercial contracts. There are other exceptions to the Act, such as community housing leases, however it is important to note this exception does not reach leases granted social landlords and registered providers of social housing.

Enforcement: Grounds for a Claim

Following legal enforcement, the provisions will have stringent repercussions for landlords where a ground rent payment is demanded and not returned within 28 days of receiving such. Contraventions to the Act will be a civil offence and carry a fine of between £500 and £30,000. Enforcement and its penalties apply to landlords, current and past, as well as any persons acting on their behalf. This is coupled with the right of a refund granted to the tenant in these circumstances, inclusive of interest.

The enforcement of the Act is wide ranging. If you are interested in the changes to the system as discussed, or think they may apply to you, we recommend seeking legal advice. If you wish to speak to our Real Estate team about the above, please contact Liz Gibbons.

•June 15, 2022•

The Renting Homes (Wales) Act 2016

The Renting Homes (Wales) Act 2016

Author: Joshua Prior

Key Contact: Neil Morgan & Liz Gibbons

When The Renting Homes (Wales) Act (“the Act”) was passed in 2016, it was intended to provide both landlords and tenants with more information regarding their rights and responsibilities, as well as simplifying the entire renting process. Tenancy agreements would become contracts and tenants would become ‘contract holders’. Quite simply, it marked an intended complete overhaul of the Welsh residential renting system.

With the Westminster Government announcing the end of Section 21 evictions (so called, ‘no-fault’ evictions) there has been a heightened speculation concerning whether Wales will follow suit.

When the Act was passed by the then Welsh Assembly in 2016, it promised to extend the two-month warning period for Section 1 evictions to sixth months. Campaigners for renters’ rights welcomed the change as it was seen to provide to provide more protection for tenants. For landlords, however, the move was a shock that gave a landowner less control over their own property.

The implementation of the Act was scheduled for Spring 2022 – specifically July 15. Due to the magnitude of changes to be implemented, landlords were understandably anxious to accommodate the changes in a clear and consistent way. It was subsequently announced by Julia James MS, Welsh Minister for Climate Change with responsibility for housing, that the implementation date would be extended to 1st December 2022.

This was warmly welcomed by the housing association community, with Community Housing Cymru calling the move “sensible and pragmatic.”

The delayed date will mean that all landlords will have more time to implement comprehensive procedures to comply with the new system. The new date will also benefit tenants as they can expect better communication around the changes and their increased rights.

When the new law is enforced, it is important to note that only those occupation contracts (which were previously known as tenancy agreements) that begin after 1st December 2022 will be subject to the extended six month notice period for Section 21 evictions.

Wales is falling behind slightly in this matter, with Scotland already having abolished Section 21 evictions and England promising to do so within the next Parliamentary term.

If you’re a housing association looking for support and guidance in relation to the above, please speak to our Social Housing lead, Liz Gibbons.

•June 15, 2022•

The Queen’s Speech: Social Housing Implications

The Queen’s Speech: Social Housing Implications

Author: Joshua Prior

Key Contact: Liz Gibbons

In this year’s Queen’s Speech, the Prince of Wales introduced two new bills that would be put before Parliament to increase the quality of renters’ rights: the Social Housing Regulation Bill and the Renters Reform Bill. The Prince of Wales also made reference to the Government’s plan for housing reform, which most recently includes the Leasehold Reform (Ground Rent) Act 2022  which comes into force on 30th June 2022.

The UK Government’s levelling up programme aims to halve the number of “non-decent” rented homes in the next seven years and create an environment which is fairer and more equal for tenants and landlords alike.

Social Housing Regulation Bill 

Executive Summary: Our Social Housing Regulation Bill will eradicate the poor treatment of tenants by some landlords. We will focus on levelling up homeownership for all as part of a fair and just housing system 

The lobby pack that accompanies the Queen’s Speech describes the purpose of the bill to “Increase social housing tenants’ rights to better homes and enhance their ability to hold their landlords to account, addressing concerns that the Grenfell Tower tragedy raised.” The Government is clearly committed to championing the rights of tenants, and the increased role of the Housing Ombudsman and the Regulator of Social Housing (Regulator) has been praised by Local Government Association.

The Regulator would, in the current form of the bill, have far more power than it currently does by being able to issue limitless fines, inspect homes, intervene in poorly managed associations, and order emergency repairs.

ITV News has reported that there are more one million families on social housing waiting lists in England, with a further 96,000 families in temporary accommodation.

Renters Reform Bill

Executive Summary: The Renters Reform Bill will abolish so-called ‘no fault’ Section 21 evictions and strengthen landlords’ rights of possession, providing a fair and effective market for both tenants and landlords

A more robust legal framework and stable rental market would aid both tenants and landlords by initially supporting and empowering tenants and  by allowing for better investment by landlords in a more stable market.

Tenants’ rights

By removing Section 21 of the 1988 Housing Act, private tenants will receive far more security and allow them to challenge landlord poor practices and unreasonable rent rises without the fear of repercussions. Advocacy group Generation Rent have published statistics which show that S21 evictions are closely linked to levels of homelessness within England and Wales.

Renters will also benefit from the Decent Homes Standard being legally enforced in the Private Rented Sector for the first time since its inception almost two decades ago. A new ombudsman will also be introduced, replacing the costly court system, and ensuring that tenant’s complaints are taken seriously and that landlords put things right by acting swiftly.

Landlord’s rights

However, the Bill is not wholly aimed at providing renters with a more positive experience. Landlords will enjoy reformed possession grounds which include a reduced notice period for anti-social behaviour and stronger grounds for repeated incidences of rent arrears. A new landlord portal will be aimed at helping landlords understand their obligations, as well as providing tenants with information which will hold their landlords to account.

The Effect on Wales

Whilst both bills will extend to England and Wales, they will only apply to England. This is due to housing being devolved in Wales. Whilst Scotland has the largest social housing estates in the UK, Wales has also been targeting poor housing standards and providing decent social housing, so whilst these bills will not directly affect Wales, we do hope that they will inspire the Senedd to further their fight for better housing.

Want to find out more? Speak to one of the Social Housing team today.

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•June 9, 2022•

Disrepair Claims and How To Tackle Them

Disrepair Claims and How To Tackle Them

Author: Katie Hardie

Key Contact: Jennifer Butcher & Neil Morgan

One of the biggest issues social housing providers encounter is claims brought by tenants for disrepair.

Whilst preventing tenants from bringing disrepair claims is not always going to be possible, there are a number of steps a social landlord can take and measures they can put in place to make the handling of disrepair claims less onerous and put themselves in the strongest position possible when faced with a claim.

Below are some top tips to keep in mind when dealing with disrepair claims.

Letter of claim

If a tenant wants to pursue a social landlord for disrepair, it must do so under the Housing Disrepair Protocol (“the Protocol”) and a letter of claim should be sent to the landlord at the earliest reasonable opportunity to start this process.

Following the Protocol is crucial as there are costs consequences for non-compliance or failure to adhere to the timescales set out. Any letter received from a tenant must be dealt with efficiently and within 20 working days of receipt, as set out in the Protocol. If a landlord fails to respond to the letter of claim in time or at all this is regarded as a failure to comply with the Protocol and means that a tenant is then free to issue proceedings. It is therefore imperative that landlords act quickly.

However, although there is a timeframe in which a landlord must provide a response, they should carefully consider the content of any letter of claim received. It is important to remember to look out for key bits of information such as whether there is an indication that the alleged disrepair could be urgent, for example a leak or infestation, which would need to be dealt with immediately.

Experts and access

The protocol gives detailed guidance on the instruction of experts. It advises parties to consider whether an expert is necessary. If the issue only relates to the level of damages claimed rather than to the disrepair itself, an expert’s view may be unnecessary and photos or a video, for example, may suffice.

If parties consider that an expert is needed, access to the property will need to be given in order for the expert to inspect the alleged disrepair.

A landlord must:

  • give reasonable notice of the need for access (except in an emergency);
  • give access to common parts as appropriate (for example, to allow the inspection of a shared heating system); and
  • take reasonable steps to give access to a tenant for the purposes of inspection, even if the tenant is no longer in occupation.

Similarly, a tenant must also give reasonable access to the landlord for inspection and repair in accordance with a standard tenancy agreement.

If it becomes apparent that there are access issues when a landlord is trying to arrange works or inspections, a landlord can review the tenancy agreement to see whether there is a provision setting out what they can do in the event access is denied.

However, best practice would be to (1) arrange an appointment with the expert and tenant, (2) prior to the appointment send a letter to the tenant (and their solicitors) that clearly states the time and date so there can be no disputing this further down the line, and (3) proceed to attend on the date and time. If the expert cannot access the property (4) ensure they evidence that an attempt was made.  This is helpful because failed access can work in a landlord’s favour if a disrepair claim is brought by a tenant. A landlord may want to be persistent and carry out these steps at least three times before considering commencing court action against the tenant themselves.

Records and documentation

If a disrepair claim is ultimately brought by a tenant, it will be helpful to the landlord’s case if it can provide documentation to evidence complaints of disrepair received and details of any works that have been undertaken in response. It is unlikely that a tenant will keep detailed (or any) records and often the courts will expect a landlord to have these (despite the burden being on the tenant to prove its claim). If this is the case, a landlord will be in a much stronger position to defend a tenant’s claim. It is therefore worth ensuring that as a landlord you have reliable reporting systems in place.  

Settlement

A landlord will always have the option to try to reach a settlement with the tenant should they bring a disrepair claim. Once a claim is issued, costs can very quickly escalate (and will not always be recoverable from tenants even if a landlord is successful in defending a claim) and litigation is never without risk. Therefore, it may sometimes be worth taking a strictly commercial view and attempting to settle. That said, if a landlord is confident in defending a claim and has strong contemporaneous evidence to back up its defence, they may wish to fight the claim all the way to trial.

The above measures and tactics can be applied to all types of disrepair claims and if these are borne in mind when dealing with issues of disrepair it will more than likely be less time consuming and costly for landlords.

If you would like further assistance, please contact the Litigation & Dispute Resolution Team.

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•May 10, 2022•

The EWS1 Form as a Response to the Cladding Crisis

The EWS1 Form as a Response to the Cladding Crisis

Author: Joshua Prior

Key Contact: Steve Morris, Gareth Baker & James Williams

The External Wall System Fire Review, more commonly known as the EWS1 Form, Certificate, or Report is proof by a qualified individual of a residential building’s fire safety. The safety is measured by the fire resistance of the external walls. This form is a clear response to the cladding crisis which started with the Grenfell Tragedy in 2017.

The form describes itself as “a set way for a building owner to confirm to valuers and lenders that an external wall system (EWS) or attachments, such as a balcony, on buildings containing flats has been assessed by a suitable expert for likelihood of proportionate remediation to address fire safety risk.”

EWS1s are not a legal requirement for any building, however if the building is one which the Building Safety Act 2022 calls “higher risk” (over 18m or seven storeys tall) then it is likely that a transaction will request one – whether that be buying, selling, or mortgaging. The rationale for this “higher risk” requirement is that the smaller the building (in terms of height) then the smaller the risk of a cladding crisis.

The questions in the form  are relatively simple and only ask for the property’s address and then Option A (where no combustible materials are detected) or Option B (where external walls are likely to support combustion). There are then a couple of sub-questions for both with Option A asking whether there is an existing risk assessment or that no combustible materials are present, and Option B asking whether remedial actions are required. Option A can be signed off by various professions (such as surveyors, architects, and engineers), however Option B – due to its severity – will need somebody with a greater expertise in fire risk assessments.

The form is valid for a total of five years from issue but needs a reassessment if there are any significant changed to the external building (for example, balconies).

If you wonder whether your building or property transaction requires an EWS1 Form, please speak to one of our Real Estate Lead Partners, Gareth Baker and Steve Morris, or our Construction Partner James Williams.

•May 10, 2022•

The Building Safety Act 2022

The Building Safety Act 2022

Author: Joshua Prior

Key Contact: Steve Morris & Gareth Baker

The Building Safety Act 2022 (BSA) is an ambitious attempt to improve the UK’s building standards, following the tragedy at Grenfell and the report into building safety by Dame Judith Hackitt. The Act received Royal Assent late in April and has ended almost a year of debate by both Houses of Parliament. Whilst not all the Act’s provisions will come into force straight away, there are some key areas that we have identified that developers and tenants alike should be aware of.

The Act will apply to England and Wales alike, however Scots law slightly differs and so the below should only be read with reference to England and Wales.

Accountable Person / Duty Holders

“Higher-risk building” – those residential buildings which are over 18 metres tall, or more than seven storeys – will now be required to have an “Accountable Person” who, as the name suggests, will be responsible for the overall building safety. The Accountable Person will likely be the owner of, or the person with an obligation for repairing the common parts of, the building and will be responsible for taking all reasonable steps to prevent a major incident occurring due to a building safety risk, reporting to residents the relevant safety information of the building, and carrying out fire and structural safety risk assessments. The Act seems not to impose any liability upon the individual, however there are other updates on liability as mentioned below.

Additional Liability

The BSA has been reported to rip up the long-standing legal principles of privity of contract and duty of care, and instead creates a new cause of action for anyone with a right or interest in the property (for example the tenant or current owner) to bring a claim against a party in breach. The party could be anyone who creates construction products which are installed in residential buildings and result in the property being unfit for living. Traditionally there would be no relationship between the current owner of the dwelling and the manufacturers of construction materials, however the BSA overhauls the old rules bringing more accountability to building safety standards. Moreover, liability is also now imposed on “any person who markets or supplies a construction product [and] makes a misleading statement in relation to it” marking a clear reflection on the tragedy seen at Grenfell in 2017.

Removal of “capped” leaseholder contributions.

The last implication to note from the BSA is that leaseholder contributions have been limited to Higher-risk buildings (residential buildings over 18 feet or seven storeys), and capped to £10,000, or £15,000 in Greater London. The Government rejected amendments to cap the amount to zero.

If you wish to speak to our Real Estate or Construction teams, please contact Steve Morris and Gareth Baker (Real Estate) or James Williams (Construction).

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•February 22, 2022•

The Social Housing Decarbonisation Fund

The Social Housing Decarbonisation Fund

As part of the Heat and Buildings Strategy, a further £800m of funding has recently been committed as part of the second wave of the Social Housing Decarbonisation Fund, which will allow social landlords and social housing managers to apply for grants to carry out energy efficient upgrades to their tenants’ homes – including new heating systems, energy efficient doors and windows and upgraded insulation. With buildings and homes making up some 40% of the UK’s carbon emissions, this is a crucial part of the wider strategy to meet the UK net zero target by 2050.

As part of a wider package of measures, this will see the UK working towards a key target of ensuring all new heating systems installed in UK homes will using low-carbon technologies, for example heat pump, or support new technologies that deliver green fuel by 2035.

The initial focus is currently on properties with an Energy Performance Certificate (EPC) rating of D or below, which approximately 1.6 million social houses fall into.

Some 9,000 jobs in the green energy sector are expected to be generated as result of the fund and the carbon emissions savings will be the equivalent of removing some 6,000 cars from the road each year. This ongoing investment will also produce warmer houses, lower emissions and lower energy bills for millions of people, which is more relevant than ever.

A win-win-win scenario?

For information or advice on any of the topics raised, please contact our affordable housing team.

•February 21, 2022•

Looking Ahead to 2022 and Beyond In Social Housing

Looking Ahead to 2022 and Beyond

Social Housing as a sector will undoubtedly remain a key social, political and environmental issue in 2022. As the Archbishop of Canterbury highlighted in the run up to Christmas 2021, the UK has many critical challenges to overcome to provide safe and affordable housing for all. The influence of the new Secretary of State for Levelling Up, Housing and Communities will also be interesting to watch.

The ‘Levelling Up the United Kingdom’ White Paper, released in February 2022 made specific reference to building more housing, “including more genuinely affordable social housing”, as well as scrapping the 80/20 funding rule that focused greater investment in Greater London and the South East region, and instead will see investment in more homes in the North and Midlands regions of England.

Part of this strategy will see new legislation introduced to improve the quality and regulation of social housing, give residents performance information so that they can hold landlords to account, and ensure when complaints are made, landlords take quick and effective action.

This all is set against a backdrop of very specific challenges the sector will need to meet head on; including the continued costs of fixing fire safety faults, moving towards the net zero target in 2050, ongoing supply issues, increased costs for raw materials and wider ESG responsibilities, particularly following on from COP26.

The journey towards sustainability and the net zero target by 2050 will remain high on the political and social agenda but despite all the challenges ahead, the social housing sector must play a critical role in improving the lives of millions of people across the UK.

A busy, demanding but exciting year ahead.

For information or advice on any of the topics raised, please contact our affordable housing team.

•February 21, 2022•

What 2021 Budgets Mean For The Social Housing Sector

What The 2021 Budgets & Levelling Up White Paper Will Mean For The Social Housing Sector

Although the Autumn Budget seems a long time ago, it is important to consider what was announced and how this may impact the sector moving forward. Two key areas of focus included the £11.5 billion investment commitment through the Affordable Homes Programme and the £1.8 billion to be spent on developing 1,500 hectares of brownfield land, unlocking one million new homes.

In terms of the £1.8 billion figure, £300m will be provided to combined and local authorities to unlock smaller sites, with the remaining £1.5 billion providing funding to regenerate underused land and deliver transport links and community facilities.

Further detail in February 2022’s Department for Levelling Up, Housing and Communities (DLUHC) White Paper confirmed that the 80/20 rule which led to 80% of government funding for housing supply being directed at ‘maximum affordability areas’ (in practice, London and the South East) will be scrapped, with much of the £1.8 billion brownfield funding instead being diverted into sites across the North of England and the Midlands.

In addition, the government has committed to building more genuinely affordable social housing, with a new Social Housing Regulation Bill delivering upon commitments the UK government made following the Grenfell tragedy in 2017.

In Wales, the government announced in December 2021 that it will spend £310m in Social Housing Grants in 2022-2023, up from £250m in 2021. The confirmed plans would see a spend of £330m and £325m in 2023-2024 and 2024-2025 respectively, making up over £1 billion across the next three years. This is all designed to support the government target of building 20,000 low carbon social homes by the end of this parliament. In addition, £580m will be allocated for the decarbonisation of social housing in Wales over the next 3-4 years.

For information or advice on any of the topics raised, please contact our affordable housing team.

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