It’s now 11 months to the election. Thankfully, housing will finally dominate an election campaign for all 3 parties. All no doubt promising more building but without saying exactly where.
Over the next few months all those with a vested interest in seeing more (or less) new homes will be publicising their suggestions for what should go in the respective manifestos. The first salvo came from Shelter/KPMG publishing “Building the Homes We Need” recently. Although the first, I strongly suspect that not much else will be better researched in the months ahead. This is an important well-presented piece of work demanding considered responses from across the housing sector.
Whilst I certainly do not speak for Barratt as a whole I am happy to provide some personal observations.
Let’s start with the stuff I really like.
Firstly it’s clearly underpinned by a huge amount of research and consultation. This allied to its crisp narrative and super use of informative charts and graphics means it commands respect.
Secondly the recognition of the need to get land to these housebuilder more quickly and cheaply is apposite. The report notes that the residual land value model all housebuilders use helps drive high land prices and encourages speculators to enter to the land market occupying a (high value) space between the landowner and the housebuilder. Housebuilders are competitive and land is the raw material we fight hard for. Therefore when a landowner is focussed only on achieving the highest land value (not irrational) then infrastructure and social spend can suffer as housebuilders do what they can to give the landowner what he/she wants – the highest possible price – in order to secure control of the site.
Conversely there are many examples where Barratt have worked with enlightened landowners primarily driven by the need to create quality and legacy. Again not irrational. This allows us to focus more easily on the qualitative elements. For example at Derwenthorpe at York (Joseph Rowntree Foundation) and Cane Hill in Surrey (Homes and Communities Agency) the product has been truly outstanding.
However the report skilfully and honestly articulates that these examples are perhaps the product of enlightened landowners and housebuilders rather than a “natural” output from the current system.
Thirdly the focus on more custom build, more self-build and more small builder activity is welcomed. Lending difficulties, the recession and our unduly complex planning system has driven many small builders out of business. At Barratt we support the “Help to Build” proposals in the report and would like to see more small builders back. Why?
- They don’t compete with us
- They train people for our industry
- They often pioneer new housing in areas which haven’t had any in recent years. When local communities see that new housing brings in nice new families (rather than a calamitous fall in local house prices) it can “pave the way” for us
Fourthly it goes without saying; the proposals for New Homes Zones are supported albeit more detail, in particular in relation to the role of the landowner may be useful. Similarly recognition of the need to make some Garden Cities actually happen and to release land from Green Belt is all good and sensible stuff. As is the suggestion that LEPs (in the absence of anything else) get involved in driving “larger than local” strategies to meet housing need in functional economic areas.
Fifthly measures to fund early infrastructure provision and create less market volatility cannot be argued against. Similarly funding proposals to switch funding from benefits to bricks, to create a Housing Investment Bank and relax regulations in order to encourage more local authority and institutional investment in housing.
And finally I completely agree with the following narrative on page 10:
“City and town leaders have few incentives or tools to build consensus and infrastructure provision remains largely independent from housing. This means that support for new housebuilding can easily wilt in the face of local opposition”
Strategic planning provided local politicians with a “scapegoat” or “fig leaf” in relation to really big, difficult and unpopular strategic housing decisions. At present it is arguably unfair to ask local councillors to take such decisions- let’s remember that the average size of a local authority ward is 5,500 people.
So where was I crinkling my nose as I was reading? It was in relation to the argument that there should be no wholesale reform of the planning system. This would seem impossible if some of the key recommendations of the report were introduced, namely new Home Zones, a new strategic planning layer, Green Belt swaps, Garden Cities and cross boundary needs assessments.
Overall though, hat-tip to the authors for bringing a lot of issues together and making an effective cri de coeur in relation to increased supply.