COVID-19 – What Next for Affordable Housing?

At the beginning of 2020, we published our predictions for the affordable housing sector.  Several months in, and with us all in a place we could never have foreseen a few months ago, it is time to look again at what the Government said in the December 2019 Queens Speech and what the immediate future looks like for affordable housing.

  • Build a million more homes over this Parliament. The March budget saw the announcement of a £12.2 billion multi-year extension to the affordable homes programme, which was generally welcomed by housing associations.  In the short term, most construction came to a standstill later that month, but work is slowly starting again on some sites.  Supply chain issues and new H&S guidelines will almost certainly impact on build programmes and on cost.  A predicted drop in market sales could put a brake on new developments but could equally provide opportunities for housing associations to pick up surplus stock.
  • Introduce a new, reformed shared ownership model. We are still seeing completions on new shared ownership homes and lots of interest in new schemes coming up.  Reform (including possible 1% staircasing) remains on the Government agenda, but there is a lot of work to be done on the detail and will this be a priority when the current shared ownership model remains fit for purpose?
  • Launch a consultation on First Homes. The consultation continues on First Homes – the proposed scheme for a 30% discount on homes for local people and key workers secured in perpetuity. Our response to the consultation highlighted the risk of First Homes pushing out other tenures.  We could see this policy being heavily promoted as a way of re-invigorating the housing market.
  • Help to Buy. The current programme ends in April 2021 with a more restricted scheme running to March 2023.  There was no mention of an extension in 2019, but rumours are circulating that the Government is considering extending the scheme to help address the anticipated fall in the housing market.  As the Help to Buy framework is already in place, it would certainly be a quicker fix than First Homes.
  • Renters’ Reform Bill. This act will abolish no fault evictions and introduce a lifetime deposit.  No date has been set for the legislation, which is not surprising given current circumstances.  In the interim, the emergency Coronavirus Act 2020 has brought in temporary protection from eviction for residential tenants.
  • Abolish unnecessary ground rents on new leases and give new rights to homeowners to challenge unfair charges. Many were expecting 2020 to bring the long-promised legislation to end onerous ground rents, reform unfair leasehold charges and ban new leasehold homes.  This is now looking increasingly unlikely.

The Government emphasis was always going to be ownership over rental, but could the pandemic mean society takes a fresh look at housing generally?  Whatever happens next, the role of housing associations in a time of economic difficulty cannot be underestimated and genuinely affordable housing is going to be more critical than ever.

Spire Solicitors LLP is a leading provider of legal advice to the affordable housing sector.  To find out how Spire can help your organisation, contact us on 01603 677077 and ask to speak to a member of the Social Housing Team.

This is not legal advice; it is intended to provide information of general interest about current legal issues.