28 January 2015

  • Co-chaired by two former housing ministers, the independent Commission sets out a pathway to overcoming UK’s housing shortage
  • Requires cross party support for a long-term approach, together with consistency in policy, and a commitment to both quality and quantity
  • Targeting 2 to 2.5 million new homes built by 2025

Today (28/01/2015) sees the launch of an independent report by the Lloyds Banking Group Commission on Housing at the House of Commons, which sets out a roadmap towards the sustained supply of good quality new homes.

The aim of the Lloyds Banking Group Commission on Housing is to generate cross-party agreement on key policy areas which could make a significant difference in providing greater levels of new homes.

Co-chaired by Mark Prisk MP and Nick Raynsford MP, two former Housing Ministers from different political backgrounds, the Commission also includes a number of industry experts from different fields who collectively generated the insight shaping the conclusions of the Report. The research underpinning the report has been carried out by Cambridge University and sponsored by Lloyds Banking Group.

Headline recommendations

The Report calls for a progressively rising target for national house-building which will deliver 2 million to 2.5 million homes by 2025.

To achieve this, the focus needs to be on the delivery of more high quality yet affordable homes, with large private sector builders supported by:

  • A revitalised SME home-builders sector and custom/self-build sector.
  • A new professional rental sector backed by institutional investors, with more secure, longer-term tenancy agreements.
  • A duty placed on all public sector bodies to review land holdings and assess the case for the disposal of surplus for the purpose of new homes.
  • Strategic Plans introduced to provide clarity to Local Planning Authorities (LPAs) on the number of new homes needed and the infrastructure around them at ‘first-tier’ council level
  • Meaningful public engagement which informs local communities of both the need and benefits of more high quality homes.
  • A review of the balance between public expenditure on new homes and housing benefits that help to pay rents.

Mark Prisk, MP, co-chair, Lloyds Banking Group Commission on Housing, said:

“The UK housing market is facing a range of interlocking problems relating to the general shortage and quality of new homes being built. These will not be solved without a determined and sustained programme supported by all political parties, and we intend this report to be the spur to give this issue the priority it needs.”

Nick Raynsford, MP, co-chair, Lloyds Banking Group Commission on Housing, said:

“The Commission was convened to identify the key policy responses necessary to generate a higher, more sustainable level of housing production in the UK. Crucially, this report does not revisit issues previously raised in other reports, but has focused on a number of key areas which could make a significant difference.”

Other key recommendations in the Report are:

  • Planning: the National Planning Policy Framework (NPPF) should not be significantly altered over the next decade. Government needs to ensure that all Local Authorities have local plans in place (currently 40% of districts do not have a Plan that has passed an examination).
  • Strategic Planning should be introduced to address the small geographies of districts, to introduce better co-ordination of infrastructure delivery to match housing growth, and to ensure that properly planned areas of housing growth recognise the natural capacity of the area. These should be sub-regional – at ‘first tier’ council or ‘city region level – so as not to be too remote from local public engagement and to maintain democratic accountability for planning at a local level.
  • Compulsory Purchase Orders: Greater clarity is needed on the rights of local authorities to use these to assemble large brownfield sites from smaller parcels in multiple ownership to stimulate brownfield regeneration.
  • More long-term development partners: HM Treasury rules concerning ‘best value’ need to change to encourage government departments, NHS trusts, local authorities and other public bodies to become long-term development partners. Local authority bond guarantees should be matched to this land release until 2025.
  • Clear targets for Local Authorities: over the time taken with S106 agreements and pre-commencement conditions. The difference between the best and the average can shave 18 months off the process from starting pre-applications to opening the first show house.
  • Reform of the Construction Industry Training Board: In order to improve the operation of its levy on the industry and to improve the relevance and speed of the training it provides.

Brandon Lewis, Housing Minister, said:

"I welcome this report’s contribution to the debate, which makes clear that all parts of the housing industry must work together and continue to build the homes this country needs.

"It also recognises the progress we’ve made since 2010 to get the country building again, providing more homes and security for hardworking people. This includes the £525million Builders Finance Fund to kick-start stalled smaller sites, the billions we’ve invested in building new affordable homes, and the radical reforms to the planning system which has put power back into the hands of local people."

Stephen Noakes, Managing Director – Retail Customer Products, Lloyds Banking Group, and member of the Commission, said:

“The Report acknowledges that the challenges holding back the supply of good-quality new homes are multi-layered and as such there is no one single solution. Instead what is required is a sustained programme of measures and a long-term commitment to a wide variety of different types of developments.

“We are recommending a series of incremental changes which form an achievable framework for long-term housing affordability. This is a generational challenge, and we need to get to a sustainable level of house-building for a more prosperous Britain.”

Helping Britain Prosper

In 2014 Lloyds Banking Group made a public commitment to Help Britain Prosper*, and has already confirmed a number of practical steps to realise this:

  • In October 2014 Lloyds Banking Group announced the launch of a ‘Housing Growth Fund’ to assist smaller house-building businesses. This will be a £50 million fund to provide SME housebuilders with equity to support residential development projects. This is part of a call for at least 60,000 new homes above the current level of supply.
  • In January 2015 Lloyds Banking Group became the first lender to take part in the Custom and Self Build (CSB) Scheme. Under CSB individuals wishing to self-build or custom-build a home in one of the participating local authority areas will apply for a mortgage and, once agreed, the deposit, for as little as 5% will be paid direct to the local authority. The local authority will fund the cost of the build to completion at which point, the mortgage will be provided by the lender, covering the build costs, which will be fully repaid to the local authority. Once the house has been built, homeowners will simply have a mortgage on a custom or self-built property.
  • 2015 First Time Buyer Commitments: Lloyds Banking Group will pledge to support first-time buyers, by committing to lend a further £10 billion in 2015 to help customers purchase their first home. We expect the commitment to help more than 80,000 first time buyers by the end of the year, and this will be delivered by continuing to offer the most comprehensive proposition in the UK mortgage market.
  • In addition, as part of the Helping Britain Prosper Plan, Lloyds Banking Group has committed to providing at least one in four new build mortgage completions for first time buyers, second steppers and private rented, as a proportion of the total new build market.
  • Lloyds Banking Group will continue to support key initiatives in the UK housing market, including Help to Buy, shared ownership and shared equity, to help more customers get on the housing ladder, and more customers move up it.


To read full report click here