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18/06/2014

Housing: What do the experts think?

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A group debating

In early June, a quintet of housing heavyweights battled it out in a BBC Radio 4-chaired debate about how we can solve the UK’s housing crisis.

Housing: Where will we all live? aimed to explore the reasons behind Britain’s housing shortage and its overheated housing market, and to offer workable solutions that would ensure everyone has a place to live that is decent, close to work and amenities and falls within their means.

Here, in a nutshell, are the key points stated by each of the participants:

 

Rachel Fisher

Rachel Fisher, head of policy, National Housing Federation

The problem

“In 2010, we saw a 60 per cent decrease in capital spending as part of the comprehensive spending review. There was no public outcry. In the context of local authority cuts, they [local authorities] don’t have the people with the skills to do it [build houses].

“How do we link economic development and job creation with housing? It’s very difficult to do that when you don’t have a national plan. We need to think more strategically. We need also to be thinking more about shared ownership and other models, and how we improve the rental model. What is it in our culture that draws us to want to own a home and that’s the only model?"

Improving the rental sector

“We have a very fragmented private rented sector, with a lot of very little landlords and an inconsistency in approach. The housing associations that I represent have been at the front of thinking about how we can have a more professionalised offer for the private rented sector.

“The Mayor of London has recently introduced a rental standard. We really need to think about how we invest in a large-scale private rented sector.”

Should we build on the greenbelt?

“You cannot provide all the homes we need using only brownfield sites. We need infill, diversity, integration. It’s about a mix.

“We conflate greenbelt and greenfield. The greenbelt isn’t nearly as green as we like to think. This is merely a planning designation, a tool for deciding were we want to live, and it was introduced as part of a growth deal [after the Second World War], with the balanced policy of having new towns

“We drew them [greenbelts] in order to say ‘We are going to build our towns over here. This is where the employment is going to be and where people are going to live’. We did it in order to constrain development and prevent  American style sprawl, which is hideous.”

Is localism limiting?

“One of the biggest arguments in favour of localism is that the more people are engaged and talking about the issues, the more likely they are to recognise that they need more homes in their area.”

The solution

“We need to sort out the land: funding sites, allocating and releasing public sector land. Getting people to say ‘Yes to homes’.”

 

Richard Blakeway, deputy mayor of London for housing, land and property

The problem 

“We have a problem that’s been brewing for over 30 years. Unlike health and education there’s been no big national consensus. The biggest failure is housing supply. How we address that needs a radical change – a structural change and not some tinkering.”

Helping people get into homes

“Employers can specifically provide support for the rental deposit. We can use shared ownership models. The average deposit [for a house] is about £60,000. Under shared ownership, the average deposit is about £8,000. This needs to be expanded hugely.”

Too much landbanking

“Part of that [consented properties not being built] is because it’s owned by people who have no intention of building homes. They are speculating. What we need to do is get that land into the hands of those who will build homes. 

“Fundamentally, the existing housebuilder model will have constraints. In a way we should just let them get on with it. But we need to supplement that from entirely different sources. 

“One of the things we are really need is pension funds investing. That would supplement everything else that the big housebuilders will do and could well bring new players into the market.”

The solution

“There’s tons of land that can still be built on within London. There are 200 town centres in London – we shouldn’t lose sight of that. It’s providing homes where there’s the greatest demand in this country. [We need an] Olympic style effort to clean up that land so you can develop it."

 

Wayne Hemingway, Building for LifeWayne Hemingway, designer and chair of Building for Life

The problem

“It’s counter-productive to a balanced society that you buy something on credit and it makes you money while you sit back and do nowt. Sixty-five per cent of the British population own a property. Any government doesn’t want to upset that 65 per cent.

“We’re making the 65 per cent richer and the 35 per cent poorer. It’s got to end in tears.

“They [the big housebuilders] are making record profits on delivering less. Could it be that by delivering less they are making more profit?”

The issue of housebuilding monopolies

“You bid for some land and it might be able to fit 5-700 homes. One builder owns it. And they are effectively in a monopoly. In Germany and Holland, that land would be split between five housebuilders. There’s competition, five times the speed of build. The Monopoly Commission doesn’t understand it. They think that we build houses, but we build places.”

Overcoming nimbyism

“There’s not such a nimby problem in some of our neighbouring countries. When housing is built they don’t think ‘Bang goes the neighbourhood’. Quite often people welcome what’s coming because the design is so good and you get that variation because they think it looks good and it’s good for society. We have to design better houses and we have to take more care.

“It’s not just the planning system [that’s the problem]. Planning when you say it, it seems to often be a negative word. Planners could be heroes and they should be seen as heroes.

"It [planning] has been put down. You look at university applications versus the subscription for people to be architects and designers. We should be attracting all the brainiest that want to be architects and designers and we could be paying them healthily.”

Improving the rental sector

“If we are going to offer more private rental and better, then we have to give people very long tenures. We all know how wonderful it is to decorate and do the garden, because it’s yours and you want to protect it. I don’t think we should give up on the idea that part of life is to be able to put your sweat equity into a property and get the joy out of it. If you cannot do it in a house that you own, you have got to be able to do it on a home that you rent.”

The solution

“Voting. Get on planning committees. Anyone of 18 or over can do that. Just get political.”

 

John Stewart, HBFJohn Stewart, director of economic affairs Home Builders Federation

The problem

"There are two reasons why we haven’t built enough homes for 25 years. The first is the economic cycle. Boom or bust. 

“The other is the planning system. In 1991, we introduced the plan-led system. We had the planning act of 1947. Local authorities were given responsibility for allocating enough land to meet required needs.

“In the 90s they put a cap on housebuilding and planning had become more and more prescriptive. I believe that most housebuilding will come from the private sector. It needs to be able to meet demand but it cannot do that with the rigidity of the planning system.

“Let’s take 200,000 a year as rough benchmark. If the private sector were to build three-quarters, that’s 150,000 a year. From 1954-1990, the private sector built more than 150,000 homes in 17 of those years. From 1993-2007, there was a very long period of economic growth [but homes were not built on this scale]. It comes down to planning.”

The issue of housebuilding monopolies

“In 2008, an Office of Fair Trading study concluded there was nothing wrong. If a housebuilder sits on a 700-plot scheme, the return on capital will be depleted. Housebuilders will divide it up into phases. They will swap a piece of land.”

The solution

“Local authorities have control of the land that’s released. If there were more sites there would be more housing. If we build more homes, that would help bring house prices down. We will have to rely primarily on the private sector. They operate in a market economy and if you regulate them to the colour of door handles, you will not get the housing you want.

“Time is the key. It will be 8-10 years before you get anything out of it. It’s not going to help anything in the next few years.”

 

Paul Cheshire, LSEPaul Cheshire, emeritus professor of economic geography at the London School of Economics

The problem

“It’s a manufactured problem. Because everyone in England lives on only 10 per cent of the land area, since 1955 the real price of housing has increased more than fivefold. But the price of land has increased nearly fifteenfold. 

“We set absolutely binding limits on the expansion of our cities back in 1955. You simply cannot expand beyond them. We have a system that encourages confontration. Everything is a challenge and a counter-challenge.”

Building on the greenbelt

“We have this completely mythical view of what the green belt is like. The greenbelt for London is nearly three times the size of the GLA area. We have built Crossrail over £18 billion and we’re bringing stations within 30 minutes of London, but you’re not allowed to build houses at places like Taplow and Iver, because of the green belt. 

“Of course we should preserve high value environmental quality land. But the designation is not important. The Hoo Peninsula, for example, is brownfield land. But it’s one of the most important nesting sites for nightingales in the UK.

“There’s oceans and oceans of green belt land – far more than we need to solve our housing problems – which has got almost no environmental value whatsoever.”

Will garden cities solve the housing crisis?

“It is mildly doubtful that if you build 150,000 houses in a very large garden city that’s an answer. We should be building houses where there are jobs and people have access to those jobs. We have London stations in the green belt. You could put 1.6 million houses within the green belt within the GLA area at certain densities. I’m not saying we should do that…”

The solution

“We have to supply more than what the planning system thinks is needed because you have to have competition between suppliers. 

“And you need a simple planning system. One of the key issues of continental planning is that you have a rule-based system. You have something that tells you what you can do on a plot of land and it takes about a fortnight [to get a decision on planning permission]. In Britain it takes two to three years. It makes it too difficult for small builders.”

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