Richard Carr on why the government should stand firm on house building

Last month the government outlined planned changes to planning legislation in the UK to tackle the shortage of houses. The plans show that councils that don’t build enough homes will lose the right to decide where new houses should be positioned.

Nicknamed ‘nimby’ (not in my back yard) councils, local authorities who don’t meet targets are to be watched by the Ministry of Housing Communities and Local Government to ensure this changes.

New rules

richard carr governmentNew legislation will see councils issued a target for the number of homes they must build every year, taking into account wages, house prices and the number of key workers (for example, police officers, teachers and nurses) in the area.

Where an area has higher ‘unaffordability ratios’, higher targets will be set for the relevant local authority. Should they fail to deliver on the target, the council will be stripped of its planning powers.

The housing revolution

While the announcement received some mixed reactions in the industry, it’s clear that we do have a housing crisis. It was discovered recently by The Independent that the 2014 initiative designed to get people on the housing ladder is failing.

The Starter Home Initiative was described at the time as a ‘major push’ to get people in their first home and further said it would include “innovative changes to the planning system” to “allow house builders to develop under-used or inviable brownfield land by freeing them for planning costs.”

Four years later, not a single property has been built under this scheme, and officials now call it an “ambition”. Many point towards the lack of accountability for councils to deliver on their promises in terms of houses, something that the new legislation is designed to change.

Reaction to announcement

In the immediate aftermath of the speech, share prices for the biggest housebuilders went up, while industry leaders expressed some notes of caution particularly surrounding involving the community in planning decisions.

At Fortitudo Property, we’re in favour of robust and sweeping reforms to tackle what has become a huge problem. As an example, the last time the UK reached the target the government has set for 2020 was in the 1970s when 300,000 homes per year were built.

To get back to this, government intervention is absolutely necessary both at a local and national level. Increasing the planning power in local authorities is an important step forward.

Working together

To use the planning power in the best way, councils should work directly with the national government to sort out problems in the current planning process. To maintain and implement a sustainable housebuilding development scheme, councils must avoid the ‘nimby’ approach.

It’s also vital that developers receive much more government support. There are problems in securing funding from banks which is slowing down the expansion of the housing market, and it’s good to hear the prime minister discuss our role as developers in the reforms.

If the government and councils can succeed in getting rid of the red tape prevalent in the planning process, then more land will be available to developers.

Home Building Fund

The government also proposed to sink £1.5bn into the Home Building Fund, which is also very important particularly for smaller developers. This influx of cash will reduce the number of developers that are forced to wait on available sites.

We very much hope that the government commits to these planned reforms, in the face of undoubted challenges. If these plans become watered down in a similar way to past policy changes, then nothing will change.

We need a radical transformation of the entire planning process, backed up by the government in order to achieve the sustainable housebuilding that the country needs. The announcements are very hopeful, however, and by empowering both developers and local authorities, the government is on the right track.

– Richard Carr