Philip Barnes – Blog


Leave a comment

HIGHER HOPES FOR TOWNS?

Apologies buts it’s another OpEd on Northern towns, in light of the election result? And from a housebuilder of all things. But at least a northerner, who lives here and until recently spent 20 years working on planning and regeneration here.

Everywhere but Corbridge……

I was nervous, it was the first morning of the Public Examination into the North East RSS. First up – the CEO of the Regional Development Agency, explaining the RSS strategy. But PINS wanted to know the real priorities – the absolute basics without which the strategy could not succeed.

The CEO stayed firm. “Our priorities are the city regions, the coalfields and rural regeneration”.

PINS then asked for confirmation that meant that the key priority was the whole region apart from Corbridge?

No answer.

And perhaps that has been typical over the last 50 years. Spreading the jam to make sure every MP gets some public investment in their area, from a diminishing Government hand-out from Government.

Realistic spatial priorities and tough choices……

But does December 12th offer a new approach? A loosening of purse strings, a louder voice for towns, and perhaps a more business focussed approach to delivering jobs and growth.

As a planner, it should start with defining the spatial priorities. Based on a realistic understanding of ‘the possible’. The courage to back areas which will offer a social and economic ROI and the honesty to promote a needs based approach in others.

Unfortunately this is difficult, if not impossible, with the fabled ‘bottom up’ approach to regeneration. The one where everyone asks for, and gets, their proportionate share of funding available.

But where should the money actually go, and on what…….?

Having prioritised spatially, the next question is how? There are perhaps only three ways that national Government cash can boost the economy of an area. Physical projects, training expenditure, or direct funding new jobs.

Each can be hugely beneficial and each can be a tragic waste of money. For every Newcastle Quayside there is a National Pop Music Museum. For every newly skilled entrepreneur creating local jobs, there is someone else who utilised the training to move up and away. And for every Nissan there is a Linwood.

Picking the winners and avoiding the losses requires a deep understanding of local economic potential. Too often the consultancy studies are undertaken without really getting to the heart of what regional businesses need to deliver more.

Too often defaulting to a museum here, or some ‘digital’ there. Or a newly branded cultural quarter. Without really getting under the skin of the very specific local potential. (Or lack of)

A sharper focus on business and jobs……..

So can December 12 trigger the right economic interventions to create high quality local jobs. Less zero-hours insecure low paid jobs and more of the skilled industrial jobs which the German Government is so focussed on identifying, funding and delivering. Especially in the former GDR areas.

The chemical industry on Teesside is genuinely world class.  A brand new ethylene cracker might cost hundreds of millions of pounds and might propel the sector even higher. Yes a lot of money but potentially a huge economic and social ROI.

Now is the time to invest in the businesses which will give Teessiders a hand up, not a hand out. The airport has been saved, how can we now capitalise?

In parts of Teesside the social contract has broken down because the economic contract has broken down. Now is the time for Government to be investing in restoring both.

A greater role for planners?

So whilst it is heresy to say it, perhaps a more spatially led approach. Yes, a more top-down approach, to define the opportunity areas and then frame the tough local conversations on priorities.

So less anytown boilerplate business centres with public sector tenants, in the wrong locations.

And more the tough decisions on where to unleash the market facing Government investment in the businesses, training and infrastructure which will unleash the economic potential of the north.

But without ignoring needs based funding to rebuild the social contract in disadvantaged areas. Through improved housing, stronger community structures, and better town centres.

And enough left in the kitty to grab and support the next Hitachi or Sage when such opportunities emerge from nowhere.


Leave a comment

KEEPING UP APPEARANCES

So why on earth is a housebuilder writing about snobbery on a long journey home from holiday? Because it seems getting worse, and it affects how many new homes are built.

Some home truths are always welcome……

On vacation I enjoyed reading the well researched book, Home Truths by Liam Halligan. Albeit, from a Barratt perspective, I didn’t recognise most of his views about how volume housebuilders actually operate.

But one chapter particularly struck a chord. Namely the powerful indictment of the snobbery within the middle class elite about suburban housing, such as his own parents family home on the Kingsbury estate in NW9, Metroland.

The author clearly defined how such housing has helped deliver social mobility for working class families and engendered community cohesion. And in stark contrast to so many snobs in the commentariat who would prefer to see the working class increasingly renting from private landlords in new ugly tower blocks rather than see any green fields released for new homes.

Thousands of new private renters, most of them becoming increasingly resentful of being excluded from easily accessible secure and affordable home ownership.

Little platoons of family, community and country……..

I also read Little Platoons by David Skelton and found it incredibly challenging and thought provoking. A powerful call to rebalance north and south (for the economic good of the whole of the UK) by recreating the economic and social contract which has been severed in many of the so called ‘left behind’ areas.

And also his searing critique of a metropolitan groupthink which appears to regard all Brexit voters as stupid; regards working class white boys in failing schools and living on sink estates as ‘advantaged’; regards northern communities as less in need of infrastructure investment and sees patriotism as xenophobic racism.

The groupthink that leads to MPs tweeting blatant snobbery at the sight of an English flag.

But what about the rugby……

Thirdly I devoured Eddie Jones autobiography and particularly enjoyed the description of how he needed to take down the destructive effects of the British class system in order to create the second best rugby team in the world. By getting into the individual minds of:

  • The working class players to get them to act as leaders, shapers and decision makers; and,
  • The middle class players to instil more aggression, nastiness and edge;

So what…….?

Well two reflections. This snobbery seems to be getting worse. In the 1960s satire shows seemed to take aim at the upper classes whereas we have now moved to “The Scousers” and Vicky Pollard.

All perhaps feeding into a demonisation of the working class, outlined in Little Platoons, and perhaps best described by Owen Jones in his book, Chavs.

But back to housebuilding……

I am not aware of any empirical research on the extent to which naked snobbery drives the NIMBY behaviours which drive down housing output. As someone who has done many many public consultation events, promoting new housing, I know all too well it exists.

Most vociferously in relation to the 20-30% of affordable homes:

  • “They won’t fit in round here”
  • “Crime will increase”
  • “I worked hard to afford to live in this area and its unfair they can come here for free”
  • “This will devalue my house and that is wrong”
  • “Our doctor is at capacity and they tend to have a lot of children”

Of course the written responses always record “flooding”, “infrastructure” and school places. Perhaps because blatant snobbery isn’t usually offered as a tick box option.

Snob Zones by Lisa Prevost is the only book I have read on the subject. But even there, whilst the case studies are incredibly insightful, they are essentially anecdotal rather than empirical.

So what next……?

Not sure exactly what the solution is but from a nakedly biased Barratt perspective I sense the constant demonisation of housebuilders feeds into the ‘snob zone’ NIMBY narrative. Only last week I saw a celebrity TV architect expressing an completely baseless attack on the sector via Twitter.

From what I see our new developments are generally superior than the adjacent estates, in both architectural and placemaking terms, and with massively better energy/carbon credentials. But often the local and national conversations are driven by an ignorant narrative of poor design and quality, usually lacking evidence.

Again something which I don’t recognise given that we have delivered a +90% customer recommend score, every year, since 2009. Albeit fully accepting that on occasions we do make mistakes, which can have a hugely affect a customers experience of their biggest ever investment.

UK society is arguably at its most divided for 100 years and hopefully the only way is up. Especially if new policies for the the left behind areas, described in Little Platoons, recognise the huge value of new owner occupied housing. Barney Stringer’s contributions below are helpful in this regard.

https://barneystringer.wordpress.com/2020/01/12/housing-the-growth-of-the-north-part-1/

https://barneystringer.wordpress.com/2020/01/12/housing-the-growth-of-the-north-part-2/

Building on Barney’s analysis means a radical rethink of the Standard Methodology approach to housing provision which simply projects forward what’s happened in the past.

In otherwords, we need to get out of the approach of, ‘being left behind in the past = being left behind in the future’.

Whilst at the same time over allocating vs the spreadsheet in areas of greatest economic growth, population expansion and worst affordability. Clearly essential if we are to give future generations the same opportunities of ours and our parents.


1 Comment

MAJORITY GOVERNMENT – NEW PLANNING OPPORTUNITIES?

So for the first time since 2005, there seems potential for Government to pursue a radical housing agenda without feeling completely beholden to NIMBY MPs threatening to withdraw Parliamentary support for Brexit.

Hopefully this offers opportunities for the housing sector to capitalise on.

So what would be my personal Top 5 asks of the new Government?

  1. Make it easier to amend outline planning permissions.

It might sound prosaic but perhaps the biggest day to day planning bugbear for Barratt is how difficult it is to make relatively minor increases to an outline planning permission, via the reserved matters process.

So many times we wish to buy a site from a land promoter/landowner and then build a few more homes than have been permitted on the outline.

It should be easy right? Just wanting to deliver more homes and hence reduce the pressure to release more sites……….?

WRONG.

Usually requires a brand new planning application and several months of delay.

Very easy solution though. Simply reissue the 2010 Guidance on Greater Flexibility for Planning Permissions which makes clear that unless the revised scheme causes unacceptable new harms then it should be a straightforward yes.

Seems odd this easy supply opportunity is not being grasped at a time when windowless office buildings can be converted to flats without consent.

2. Either abolish NDSS or make them mandatory

It also seems odd that, as the UKs largest housebuilder, our two most popular house types, as measured in post occupation surveys of customers, fail NDSS.

There is a housing crisis with millions being unable to afford their first home, yet the extra costs to achieve NDSS makes a Barratt starter home 5.4% more expensive for young families.

And whilst we see some concerns that too many greenfield sites are being released we have a policy which delivers, on average, 10% less homes per site.

So I’m struggling to view NDSS as good policy given that:

    • It stops Barratt building its most popular homes;
    • It makes new homes more expensive;
    • It requires more greenfield land to be released.

But actually, the biggest issue with NDSS is that it completely fails on its only purpose – namely to bring consistency and standardisation. LAs are currently a cornucopia of different approaches. From those who don’t ask for NDSS, to ones which do, and ones which ask for various different parts of it.

Madness. Either drive it out consistently or get rid.

3. Green Belt – start listening to the experts not the NIMBYs

Green Belt is the best and most valuable planning tool in the UK planning system IMHO. It’s a key reason why London is the greatest city on earth and why our great regional cities are up there with the best.

BUT the scale of the housing crisis is now such that we now need to consider whether 2 or 3% of it, the worst bits, can be released to address the UKs biggest domestic policy priority.

It is simply not fair to current and future generations, to either avoid meeting housing needs or to ‘dump’ all the UKs new homes in locations beyond the Green Belt. Thereby ignoring the economic, social, transport and environmental benefits of building on the edges of our great cities. Where the facilities exist and where people want to live.

The PINS Examination of The London Plan came to same conclusion. Now is the time for the new Government to be sensible.

Does Manchester really need a Green Belt which is 45% bigger in extent than the conurbation itself?

Is it right that 93% of the land within one hours drive time of our Leeds office, is Green Belt. (Excluding built up areas)

What do the fabled Dutch and German planners do? Have a look….

4. A refocus on home ownership.

86% of people wish to own their home yet due to the decades long failure of housing policy we have seen the rise and rise of the resentful renter. And the response of the planning system is to worsen the problem with blind support for unplanned skyscrapers of private rented flats in all our major cities.

Some planners are actually being persuaded by the PRS developers that these new renters actually prefer to rent than to buy.

THEY DONT.

Whilst some will need to rent for mobility reasons, and some will never be able afford to buy, the vast majority of these resentful renters (either now or in the future) want access to affordable homes they can buy.

Outside London, the quota system of UK planning means that each new PRS flat consented means one less owner occupier home with a garden for a young family.

Yet some regional civic leaders actually claim these new flats, often in ugly skyscrapers, represent urban regeneration! Looking forward to seeing whether that kite is still flying in 2049.

Albeit fully accept that in London more homes of all tenures are needed and also that high quality long term housing providers like Grainger need full support.

5. Ignore the noise around further land value capture reform.

The changes introduced in the July 2018 NPPF (and amplified in NPPG) need time to bed in. It already seems highly possible, that in some areas, these new rules will result in landowners bringing less land to market. Recent Local Plan Public Examinations seem to have a particular aim squeezing the life out of land value. Landowners will respond in the time honoured way – they won’t sell. And the state doesn’t have the capacity to buy land for 300,000 homes every year, by force.

Lower land prices sounds great, especially for us housebuilders. But actually there is one thing that a housebuilder hates even more than high land prices – namely no land on the market due to the planning system taxing landowners so heavily that they sit on their hands.

The 2018 reforms are radical and the consequences as yet unknown. Now is absolutely not the time to be considering more disruption.

Personal thoughts and some ideas obviously easier than others…


Leave a comment

WHAT’S ACTUALLY WRONG WITH MORE SUPPLY?

So two things have happened in the last month or so:

Firstly we now have a Government with strong majority;

Secondly I flew back from an overseas trip and, as always, was stuck by how green and undeveloped Southern England is compared to the Low Countries.

Conflating these is deliberate as it forced me to think as to whether building say, another 2m extra homes in Southern England is actually going to cause the armageddon many predict.

Particularly given the increasing volume of assertions, by a very small number of economists, (and significantly larger number of journalists) claiming that increasing supply will not have any short term impact on house prices.

But it seems much less is written on whether such a significant boost to supply would actually be harmful. And if so how? And there is even less on the hugely positive benefits which flow from building more homes, especially owner occupier market homes.

Firstly, more market homes is the easiest route to delivering more affordable homes – via S106. And with filtering we know that for every household moving into a new build home, another second hand (or social) home is either freed up or faces reduces price pressure pressure from first time buyers.

Ahhhh but the argument is that extra supply will cause more empty properties because new build supply is exceeding household formation. Really? Really???? That might work in a spreadsheet but out in the real world all of us know that household formation is being held back because of rising house prices over the last 30 years. And all of us knows of someone who is being forced to stay at home longer, or start a family later, because there aren’t enough homes in the UK.

Now is the time for a new Government, with a strong majority, to break the stupid logic cycle of:

  • Lower household formation due to insufficient housing and high prices, causing:
  • Lower housing requirements (because suppressed previous household formation is simply embedded into the future requirements for new homes) leading to:
  • Further housing undersupply and high housing demand vs supply, causing:
  • Increased upward house pressure, and
  • So it goes on.

Perpetuating that cycle through lowering supply is simply not the answer. Just checkout the average age of first time buyers.

Ahhhhh but we should reduce owner occupier housing and focus on social housing or private rented housing – the next argument goes.

Even setting aside the filtering argument, and the fact that 86% of people want to own their own home, do we now have the operational, financial and political framework to deliver a huge increase in social housebuilding?

To govern is to choose said Pierre Méndez-France. And given that housing has been an “austerity free zone” over the last 10 years do we really think that now is the time that it will be targeted for further prioritisation ahead of infrastructure, the NHS and schools? Especially when more market homes, is proven to deliver more affordable homes, at no cost to the government.

Everyone who works in the housing sector, irrespective of where, would support a huge funding boost to deliver more social housing, But how realistic is that given the Government’s election manifesto and Queens Speech? Reducing the supply of market housing would simply cause fewer new market homes AND fewer social homes. Not to mention the reduction in our S106 contributions to, inter alia, libraries, education, NHS, the Police, off-site highways, public transport, etc.

And even if there was a massive spending switch to delivering more social homes, do we actually think such projects would spend any less time getting allocated and consented than market homes? In some areas I suspect the NIMBY opposition could be even more visceral. Snob Zones by Lisa Prevost is instructive on this.

As for new private rented homes. Should policy really prioritise the enrichment of private landlords ahead of supporting the 86% who wish to own? Especially as many of the new PRS homes are in areas already characterised by high proportions of rented stock.

So yes, we can all support more social housing – especially if we ignore the practicalities of delivery, but I fear the events of last week mean we actually need to focus on how we can get more market homes (and its attendant affordable housing) onto site quickly. The London Mayor’s rejection of PINS clear recommendations to review the London Green Belt is both a disappointing omen and and an early test of strength for the new Government.

Final point, if current Ministers are wishing to push social mobility and ‘blue collar conservatism’ I would ask how many other economic sectors better deliver on meritocracy than housebuilding?

Can only speak for Barratt but our business is 100% characterised by rewarding hard work rather than a tie or a crest. A huge number of our leaders and managers, from senior to junior, joined the industry straight from school and have enjoyed career progression based on brains and ambition.

Despite what some spreadsheet might say please don’t start cutting off those opportunities. For every new home we build 2 new jobs are provided.

In conclusion I come back to a simple truth. All of the the various housing market dysfunctions are much easier to address if we have more homes to go round? It is easier to accommodate a homeless person if there is one extra home compared to one fewer.


Leave a comment

The nobility of housebuilding.

It was the HBF policy conference in Birmingham in October 2014. Graeme Bell OBE, former President of the Planning Officers Society, Vice President of the TCPA, and Chief Planning Officer at three different LAs was the last speaker and would close the event.

I was looking forward to the presentation, having met Graeme a couple of times previously and having huge respect for both his career achievements and his contributions to planning. I had only been a housebuilder for a short while but already had developed a huge pride in what Barratt was trying to do as we emerged from recession. We had achieved 5 star status for 5 years, we were planning for growth and our commitments to quality and customer service were deep rooted.

To conclude the speech Graeme emphasised the need for more new homes and then, to stunned silence, congratulated the audience for what we do. He said that providing for the basic human need of a safe and secure home was a noble thing to do.

As a newbie to the sector it both lifted the spirit and resonated with my own thinking.

Fast forward to 2019 and it is seems inconceivable that a public sector planning heavyweight would describe housebuilders as noble in public.

For that the sector needs to take some responsibility. As the market recovered, the drive to post good returns for shareholders, who had been starved of a dividend for many years, saw a drop off in terms of quality and service in some parts of the sector.

And with profit becoming a dirty word in some quarters, the huge success of Help to Buy in driving up supply got lost in the column inches about Government (tax-payer) support for homebuyers helping to drive up housebuilder profits.

Throughout this period the Barratt focus never changed. To lead the sector on design quality, customer service, sustainability, volume and safety. Whilst at the same time driving hard at best in class shareholder returns – something we absolutely must do if we are to maintain the financial firepower to innovate and grow.

And we understand our position as a totem for UK housebuilding, and that perceptions of the industry as a whole have changed since 2014. It helps us drive constant improvement and innovation and above all it makes us double down on our determination to always try to ‘do the right thing’. Sure we will make mistakes but as long as we stick to the plan everyone in Barratt will sleep soundly.

And who knows, perceptions of providing homes as being noble may even return one day.


Leave a comment

POLICY OBJECTIVE VS OPERATIONAL IMPACT

So last week I worked on some research we have commissioned in relation to the operational impact of Nationally Described Space Standards (NDSS) on the cost and delivery of new homes. Unsurprisingly it showed that NDSS makes new homes more expensive for first time buyers, and also restrict density, thus requiring more greenfield site releases.

But the biggest reflection was perhaps the distance between the policy aspiration for NDSS vs the understanding of the operational impact. Evidenced by an anecdote relating to a JV one of our divisions is doing with a particular Council. As part of the introductory work, we showed the Council CEO and the Leader our two most popular housetypes, as measured by post occupation surveys. Both thought they were superb and suitably spacious for young and growing families. But were then shocked to hear that neither could be built by the JV as a result of the Council’s requirement for NDSS. They liked the policy but lacked a detailed understanding of the operational impact.

And so with housing mix policies. Yes the Councils’s consultancy study may say that more of a particular size of house is required. Perhaps the study says there is already too many (or perhaps too few) of a different type or size of house – usually the one for which there is market demand for. But few ex-post studies prove that building market homes, contra market demand, is appropriate. Given that filtering ensures that addressing demand at one point of the housing ladder creates space at another, what is the operational benefit of a policy forcing housebuilders to build homes for sale which buck the market?

And Starter Homes may prove to be next. Ministers are making clear the priority for more owner occupier homes, via the affordable housing route. As a volume housebuilder I have no in-principle commercial objection to that. But have the operational impacts been considered:

  • Who will get these homes?
  • What will be the transitional arrangements?
  • What will be the impact on land values?
  • Will they be mandated by NPPF, with the consequent local plan policy conflict and short term disruption OR;
  • Will they be secured via local plans thus ensuring limited measurable traction for 5 years or so?
  • Setting aside the policy impact, will the policy help or hinder in operational terms? For housebuilders operational disruption is our enemy.

Green Belt? In the context of a climate emergency how can preventing the growth of cities be complementary to a policy which forces required new homes to built beyond the Green Belt? Remoter from jobs and services, with much greater travel needs? The political responses to the London Plan Inspectors Report simply increase the gloom and frustration on this one.

And even that policy nirvana of urban regeneration. Nobody can doubt the positive impact of public/private led regeneration especially on Northern and Midlands cities. Newcastle Quayside, Brindley Place, Liverpool One, Salford Quays, Spinningfields can all be described, without fear of exaggeration, as being transformative to the economic future of their cities.

But the operational impact is much less clear cut when the term urban regeneration is being applied to the construction of thousands of small flats, within ugly private rented tower blocks which, with capped housing numbers, have the planning effect of closing down the supply of much needed family homes. Maybe regenerating the size of Far Eastern investment funds and private landlords, but not so sure about the social and economic future of the city.


Leave a comment

LANDBANKING – THE FLAWED PROPOSITION WHICH JUST WON’T GO AWAY

Just like Elvis still being alive, the argument that housebuilders landbank just wont go away.

The corpse twitched again recently, triggered by a report from Shelter (here) and some interesting research from Australia, (here). Both were seized upon by the conspiracy theorists.

The Shelter research was addressed in a series of tweets from Matthew Spry of Lichfields  pointing out the simple realities that :

  • It is inappropriate to compare consents in one year to completions in another. It can often take years to get through the Reserved Matters and pre-commencement conditions process;
  • Large sites may get consented in one year but they certainly don’t get completed in full within the next year;
  • The public sector is sitting on over 100,000 unbuilt consents, demonstrating the delays that everyone faces – nobody’s fault;
  • Lapse rates are a fact of life. Markets, ownerships and landowner aspirations do change. Nevertheless a negligible statistical impact outside of London anyhow.

In terms of the Aussie research, citing this as evidence of UK housebuilders landbanking seems to be a new high in straw clutching.

Firstly the report itself, whilst extremely interesting, is crystal clear that it relates only to an Australian situation based on Australian evidence. Indeed the only UK references are an academic paper from 2009 and the various Government reports all of which have confirmed that UK housebuilders do NOT landbank.

The more relevant, recent and robust UK reports on land pipelines, by Lichfields (here) and CWE Economics (here) are not referenced. Quite understandable as they relate to the UK rather than Australia. Both these reports confirm that consented land pipelines in the UK planning system are actually way too low to deliver 300,000 homes a year. A point recognised by former Housing Minister Kit Malthouse who called for 5m homes to be in the planning system.

Secondly the report addresses relates to a specific and different question, namely have delays in the Aussie planning process caused Australian house prices to be so high? As part of that, the report considers delivery rates and absorption. All good stuff but of little relevance as to whether UK housebuilders landbank.

Thirdly the report seems to assume that an immediate landbank is similar to a strategic landbank. In the UK however they are completely different, with there being absolutely no certainty that the plots within a housebuilder’s strategic landbank will ever be developed, let alone quickly.

The key similarity between an immediate (consented) and strategic landbank is that both are being promoted to a site start as fast as possible by the housebuilder. One has certainty of delivery, the other does not.

The report also addresses a question as to whether, in Australia, land is held back, or sales rates held back, to capitalise upon market gains. Hardly relevant in the UK with our flat or falling house prices. No possibility of Barratt buying land (our biggest investment) and then sitting on it, incurring huge holding costs, in order to sell homes later at the same price or lower!

Ahhh but some have also used the report to argue that housebuilders deliberately slow build rates to protect profit. The reality is that house prices are set by the second hand market prices, which then set the price of land via the residual approach. If Barratt sells at below the assumptions at the time of purchase then obviously we risk making a loss. Therefore, like every retailer of every product in the UK, we motivate our sales teams to sell faster, at the right price, compared to the rest of the market.

One thing is sure, if there are 3 sites and 6 outlets in a local market, new homes will sell faster than if there is one site and one outlet. The impact may be slower and lower prices in the second hand market, but hey, isn’t that what policy is trying to achieve?