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RTPI: Practical ways to avoid a post-Brexit house building slump

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House building stalled after the 2008 financial crisis: We cannot afford to repeat the same mistakes again, says the RTPI's chief executive, Trudi Elliott.

The vulnerability of developers post-Brexit puts affordable housing at risk and is an urgent issue which policy makers need to address.

The new minister for planning and housing hit the nail on the head when he said we need to “work with councils, housing associations, developers, investors and local communities to make sure we build the homes we need with the mix of tenures that people want…”

It is exactly this pragmatic approach which works across and leverages the various public and private sector players that we need now.

Rightly or wrongly, the job of housing the nation has up until now fallen largely to private developers. This means that their vulnerability post-Brexit is a national issue which policy makers need to address. We must learn the lessons from the 2008 financial crash and cannot let the challenges that major house builders will face in a downturn result in affordable housing being dropped.

Too much planner, developer and councillor time was wasted during the post-crash recession arguing over which element of a permitted housing scheme should be cut to make it stack up financially. Too often it was affordable housing, too often the resulting scheme was poorer for it. In order to avoid the same public vulnerability to the shocks suffered by large house builders, we must find innovative ways of funding the affordable housing element of consented sites.

On a macro level we must also get the public sector building. The consistent shortfall in housing delivery compared to historical times of plenty suggests that there is a missing agent in housing delivery in this country and that the missing agent is the public sector. Local authority and housing association-commissioned house building will be part of the solution. Public sector involvement in housing delivery can create markets and support private sector provision.

"We must also get the public sector building"

However, local authorities need to be given the financial freedoms to engage in these partnerships. In order to foster this proactive approach, they should be able to set the planning fees they need to properly resource their planning service and to be proactive in the land market to unlock land for homes.

Planning permissions for homes far exceeds delivery at present, so local authorities and others should offer already permitted sites to support small and medium-size builders. This sector should be supported in the new industrial strategy - we need to get them building again.

Recent figures show poor progress with the government’s drive to release public land for housing. There should be a requirement for public sector land owners to release land in a more socially conscious way, rather than the current approach of focusing solely on financial receipts from land sales. In the longer term, the use of public land for housing will provide savings for public bodies like the NHS, creating healthy communities and cutting the housing benefit bill by re-routing public spending into house building rather than the pockets of private landlords.

"There has been a structural shift towards renting among young people in this country and we are poorly equipped to deal with this"

Also, local plans and local decisions should be respected for what they are. Government should support local authorities and their partners to deliver housing developments that are in line with approved local plans rather than delay them by calling them in. At the same time, government should require city regions that want devolution deals to have a plan for delivering the supporting homes required by job growth.

There has been a structural shift towards renting among young people in this country and we are poorly equipped to deal with this. We are a complete outlier as a nation in failing to supply purpose-built properties to rent with longer term security. Creating a fiscal regime that encourages “Build to Rent” is critical to this.

These schemes have become attractive to investors, and news that corporate landlords would be exempted from a new 3 per cent stamp duty charge levied on homes bought for buy-to-let investments is a step in the right direction. Other countries ring-fence some land for rental developments, and in order to adapt to the resurgence of renting these are the kind of options that we need to consider.

Market behaviour is driven by the existing housing stock, the structure of the rental market, taxation and housing benefit policy. We must recognise the true value of planning in creating certainty and shaping markets that work for everyone.

The minster’s first statement rightly recognises what needs to be done. Now let’s do just that.


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