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Written Statement - Stimulating Home Building in Wales

Carl Sargeant, Minister for Housing and Regeneration

Since I took on the housing and regeneration portfolio in March, I have quickly come to the view that my main priority as Minister must be to build homes. We are on target to achieve our target of 7,500 affordable homes during this administration and to bring 5,000 empty homes back into use, but I want to do more. I want to exceed our target for affordable homes but I also want the private sector to build more homes.

Building more homes will not only meet growing housing need, but also generate growth and jobs, provide work to help people out of poverty and ameliorate the effects of the bedroom tax. The private and public sectors must be enabled and supported to play a full role in building more homes. I have looked carefully at all the tools available to me, including regulations, policy and funding, and am today announcing a package of measures which together should increase the supply of new homes across Wales. The actions set out in this statement represent the first phase of action in this area and demonstrates the priority I accord to increasing the supply of housing.  

Building Regulations

Addressing climate change is a key Government priority. We consulted in 2012 on ambitious plans to use Part L of the building regulations to reduce greenhouse gas emissions from new properties. The consultation responses highlighted the potential for unintended impacts on the property and employment market. Our sustainable development imperative requires me to balance the longer term impacts of my decision in economic, social as well as environmental terms.

I have concluded that I will introduce, through amendments to Part L, a requirement to reduce greenhouse gas emissions by 8% from 2010 levels. This is lower than the 40% originally consulted upon. I believe that this constitutes a balanced approach - improving our emissions position without undermining the objective to build. It provides regulatory backing for reductions which are currently sought through planning guidance. This will support more consistent delivery across the housing market, whilst having a close to cost neutral affect on building costs. I believe this is important given the nature of the current housing market and the need to stimulate housing supply and get builders building. In addition, this approach does not prevent voluntary implementation of further increases in energy efficiency by the industry.  

This is an interim step towards meeting our legal obligations for all new buildings to be built to zero carbon (and nearly zero energy) set out in EU law by 2021.  

Domestic Fire Safety

As a former industrial fire fighter I am personally committed to implement the Domestic Fire Safety (Wales) Measure which was passed by the National Assembly in February 2011. I am grateful to the construction industry and the fire-related safety sector for their continued interest in this issue.

Fire sprinklers in new residential properties will prevent death and injury to householders and firefighters. However, at a time when resources are tight, I have decided to focus effort initially at high risk properties where this measure will have the greatest impact.

From April 2014, the regulations will apply to high risk properties such as care homes, new and converted student halls of residence, boarding houses and certain hostels and from January 2016 to all new and converted houses and flats. This phasing will allow the housebuilding industry to gain experience and skills, and gives the sector the opportunity to innovate and reduce the costs of installing sprinklers. The approach will continue to set Wales apart as a leader in promoting fire safety.  

On both Part L and domestic fire safety, these decisions reflect where we are today rather than where we were three or more years ago.  They will mean savings for the house building industry as compared to our original consultation proposals.  


Mortgage guarantee and shared equity

I have been looking at a range of options to support buyers who are struggling to secure a mortgage or purchase an affordable family home. This support is intended to stimulate demand and encourage greater supply of new-build properties. A fundamental part of this strategy will be the launch of a Shared Equity Scheme: Help to Buy Cymru. We will be working with stakeholders to determine the scope and potential scale of a scheme over the summer in preparation for a launch later in the year.

In addition, we have developed a NewBuy Cymru mortgage guarantee scheme. However this relies on a tri-partite relationship between Government, builders and lenders and we are seeking to secure the engagement of all parties in a viable scheme. The need for the UK Government to finalise the design of their Help to Buy: Mortgage Guarantee scheme have meant that lenders are unable, at this time to commit to NewBuy Cymru.  

Site Waste Management Plans

My colleague, the Minister for Natural Resources and Food, recognises that any regulatory change, such as proposed Site Waste Management Plans (SWMPs) must meet the needs of businesses, as well as deliver our wider waste agenda. I have agreed with the Minister that, in taking forward SWMPs, we will look at the cumulative impact of the different regulations so that any burdens on industry are kept to a minimum.

Planning

I believe we need to review the wide ranging and ambitious policies which the planning system has been expected to deliver to date - the “planning plus” agenda.  I want to get the basics right, using the most appropriate planning delivery mechanisms, which can change over time. For example, in view of the amendments to Part L of the building regulations referred to earlier, I have instructed officials to review the need for Technical Advice Note 22, including transitional arrangements, to ensure that there is no let up in delivery of our climate change agenda.    

As part of my “back to planning basics” agenda, the new Town and Country Planning (General Permitted Development) (Amendments) (Wales) Order 2013 reduces the need for householders to secure planning permission for certain developments, encouraging activity which secures jobs. Subject to approval by the National Assembly, the new regulations will come into force at the end of September.

The need to have an up-to-date adopted local development plan in place is non-negotiable.  In continuing to press authorities to speed the adoption of plans, I have already acted by requiring local authorities to maintain and update their Local Housing Market Assessments within two years from 1 April 2014.  I believe this will strengthen the evidence base that underpins local authorities’ strategic housing function.

Officials are also looking at the barriers to housing delivery more widely to see what additional changes are required. Work has been commissioned to review the planning application process for housing projects, informed by case studies across Wales. I expect this report in the Autumn. In addition, research into the functioning of planning committees is nearing completion.

Collaborative working

I am working collaboratively on housing supply with other Ministers. The development at Ely Mill is a demonstration of the commitment of the Economy, Science and Transport Minister to prioritise the use of land to promote short term economic growth. This approach is now being discussed in relation to two further sites in Newport and Rhondda Cynon Taf. The recently announced Property Development Fund which will support smaller scale property ventures in Wales is another example.      

Further action

I recognise that the above actions, whilst important, are only the start of building a rounded policy and funding framework to encourage housing supply across all sectors. To this end I have asked Robin Staines, Director of Housing at Carmarthenshire County Council, to head a small task force to look at the barriers to development and offer me advice on that framework. Members of the task force are drawn from local government, the house building industry, housing associations and funders.  

The task force will focus on three areas which reflect my agenda: the potential for local authorities to build homes through various means, open market housing development and affordable housing development. I am looking to make quick progress and the group will report to me as it develops its thinking. I will be in a position to report further on this work in December 2013.

I have also added to the resource available to me to identify potential land sites and prepare these for the development of new homes. The availability of public land for development is one of the key interventions that Welsh Government is able to make in the current public spending climate. As a Government we are reviewing our arrangements for the disposal of Government land to ensure that we are able to use that resource to best effect.