Real estate takeaways from the Levelling Up white paper

After more than two years of build-up, the government’s flagship Levelling Up paper landed this week (2 February), and received an underwhelming response from the industry. Those that already picked through the trailed news, 12 mission announcements or even the 332-page document itself have bemoaned the lack of real detail and new funding. But, among the references to a list of the largest cities in the world since 7000 BC and 20 new King’s Crosses starting in Wolverhampton and Sheffield, there is confirmation of long-debated and long-awaited legislation. EG trawled the five pillars, six capitals and many, many pages for the biggest real estate takeaways from the government’s decade-long vision. Funding for regeneration Government claims £10bn will be invested in housing over the decade. The paper points to the existing £4.8bn Levelling Up fund, the £900m Getting Building Fund, the £400m Brownfield Housing Fund, the £150m Community Ownership Fund and the £3.6bn Towns Fund. Alongside recent funds added to the £1.8bn in brownfield and infrastructure projects announced in the most recent spending review and the £11.5bn Affordable Homes Programme, the government said a £1.5bn Levelling Up Home Building fund will be launched to provide loans to SMEs and support wider regeneration. Elsewhere, it hopes to channel some £16bn from the Local Government Pension Scheme into projects that support local areas – a move that trade body CIPFA instantly opposed, calling for government to make proper funding available. Homes England’s new remit The government’s quango housebuilding business has been through various iterations and leadership changes. The white paper says the body will expand to play a wider role in supporting local government. Homes England’s previous strategic land focus saw it fund infrastructure and remediation to parcel up sites for housebuilders. Now, the government has called for a refocus to also tailor opportunities for long-term institutional investors. The 80:20 rule that previously saw Homes England grant funding concentrated in areas of low affordability, in the South East, will be scrapped in favour of greater finance for the Midlands and the North, as well as the Brownfield Housing Fund for combined authorities, with a further £180m for locally-led projects. Vacant space The government aims to crack down on vacant commercial space with landlord incentives – for example, powers for councils to force landlords to rent out vacant properties to local businesses or community groups. The government will give councils new powers to apply a premium of up to 100% for homes left empty for a year, rather than two years. The additional revenue will be directed to dealing with empty homes, with upcoming consultation on fresh guidance. The British Property Federation said requiring property owners to fill empty premises misses the point, where government should be focused on making locations attractive for tenants through the BPF’s proposal for “town centre investment zones”, alongside broader tax incentives, planning flexibility and local authority powers. First-time buyers, renting and senior housing A vow to support home ownership rests on government’s retention of Help to Buy for first-time buyers and ramping up the First Homes scheme, providing homes at 30% of the market value. The government has repeated a promise to work with lenders to provide low-deposit mortgages, on the back of the Mortgage Guarantee Scheme. By 2030, the number of first-time buyers will increase in all areas, it said. Government will seek new minimum standards for homes in the private rented sector, and particularly for people on low incomes, and will set a new Decent Homes Standard with an aim to reduce the number of non-decent homes by 50%. It will publish a white paper in the spring setting out its strategy for the private rented sector, including ending section 21 no-fault evictions and a new National Landlord Register. A task force will be set up to explore improved choice and quality for people in senior housing. Planning reform A strong planning system will be vital to levelling up, the government said. Following updates to the National Planning Policy Framework, National Model Design Code and Office for Place, planning reform will focus on ensuring local plans are made simpler and shorter. Improved data will make plans more transparent, a new model for the infrastructure levy aims to capture value from development more effectively and enhanced compulsory purchase powers will support town centre regeneration. Following the Planning white paper’s narrow focus on housing, the Levelling Up white paper calls for a positive approach to employment land in national policy and increased engagement with infrastructure providers. R&D tech clusters Domestic investment in research and development will increase by 40% by 2030 and at least one-third over the spending review period. As public investment rises to £20bn by 2024-25, the government hopes private sector investment will also climb – doubling over the longer term. The Department for Business, Energy and Industrial Strategy will aim to invest at least 55% of its total domestic R&D funding outside the South East by 2024-25. R&D investment should reach 2.4% of GDP by 2027. Three innovation accelerators will be established in Greater Manchester, the West Midlands and Glasgow city region to replicate the success of places like MIT in the US. Civil service relocation The government aims to move 22,000 civil servants out of London by 2030, with Glasgow, Edinburgh, Cardiff, Belfast, Manchester, Newcastle, Birmingham, Bristol and Leeds all on the city wishlist. Already, HM Treasury has selected Darlington; the Cabinet Office is set for Glasgow; the Foreign, Commonwealth and Development Office will go to East Kilbride; and the Department for Levelling Up, Housing and Communities has planned its Wolverhampton headquarters. To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews