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Antony Antoniou – Luxury Property Expert

Easier Flat Conversions Announced in Autumn Statement New housing policy 

Easier Flat Conversions Announced in Autumn Statement New housing policy

Housing Revolution to Benefit Multiple Generations

The UK government has announced a new housing policy in the Autumn Statement that could revolutionize the property market. The plan would allow homeowners to convert houses into two flats without needing planning permission. This new “permitted development right” is slated to come into effect in 2024 after a consultation period.

The policy has been lauded as a “win-win for all generations” that could benefit landlords, first-time buyers, and downsizers. Let’s explore the details and implications of this proposed change.

Addressing the Housing Shortage

The new build-to-rent policy aims to help address the UK’s ongoing housing shortage. For years, successive governments have failed to meet targets of building 300,000 new homes per year in England. Lack of affordable housing has made it difficult for young people to buy their first properties.

The Chancellor of the Exchequer, Jeremy Hunt, promoted the new right to convert homes into flats as a way to “unlock the building of more homes.” The government has allocated £32 million specifically for housing projects to “develop fantastic new housing quarters” in cities like Cambridge, London, and Leeds.

Though not a cure-all, permitting homeowners to convert houses into flats could ease some pressure on housing demand. It would increase rental unit supply and create more affordable starter homes for first-time buyers.

New Opportunities for Landlords

The private rental sector also stands to benefit. Landlords have faced various tax changes and legislation in recent years making buy-to-let investing less profitable. This permitted development right gives landlords a new opportunity.

They can now take advantage of heightened tenant demand by converting existing houses into two rental flats. The rental income would offset the renovation costs over time. Some landlords are already converting properties into HMOs (houses in multiple occupation) for young professional flatmates. But the prospect of self-contained flats is likely more enticing to 30-somethings wanting more privacy.

The policy change comes at an opportune time for buy-to-let investors to meet today’s renter preferences.

Helping Older Homeowners Downsize

In addition to increasing rental supply, the new right to convert homes supports “downsizing in situ” for older homeowners. Around 3.5 million older homeowners are interested in downsizing. But obstacles like high moving costs, stamp duty charges, and limited suitable options have prevented them from doing so.

The ability to reconfigure their existing homes into two flats provides a more accessible downsizing solution. Older homeowners can live in one smaller flat while selling or renting out the other. Downsizers get to right-size their living situation without leaving their communities.

This then frees up larger family homes for the next generation of buyers. Enabling more fluid movement within local housing markets is better for all demographics.

Concerns Around Implementation

While the policy aims are sound in theory, experts have raised some concerns about execution. Council planning departments are rightfully worried about losing oversight on housing developments in their communities.

Unchecked conversions could lead to substandard living spaces or clashes with policies around maintaining family-sized units. It will be important for central government to work closely with local authorities on guidance and standards around the new permitted development right.

Some also caution that a proliferation of one-bed flats could exacerbate car parking problems on residential streets. However, creative design solutions and considerations around bike storage could help mitigate this issue.

The Key Is Balancing Quantity and Quality

Housing industry leaders agree; it is vital to balance increasing housing quantity without sacrificing liveability and quality. Rigorously enforced space and amenity standards for converted flats should help avoid creating subpar living spaces.

If executed thoughtfully, the new build-to-rent policy can successfully expand rental stock while preserving the overriding “health of our housing market.” The private sector also has a duty to provide safe, comfortable, sustainable homes that allow communities to thrive.

An Opportunity, If Done Right

This proposed planning reform marks a pivotal opportunity in UK housing. The ability to simply convert existing houses into flats unlocks new possibilities across the market. First-timers finally within reach of homeownership. Landlords able to meet tenant needs. And older generations empowered to downsize on their own terms.

It will undoubtedly take compromise and care on all sides to ensure quality keeps pace with growing quantity. But collaboratively, the new permitted development right could help advance housing access and affordability for generations to come.

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