affordable homes Archives

The Government has today issued a new Housing White Paper for England, “Fixing our broken housing market”. It includes out a broad range of welcome reforms to increase the supply of new homes and to make housing more affordable, including:

Compelling councils to produce a current plan properly to confront housing demand;
Requiring developers to avoid low density projects where housing land is scarce;
A new emphasis on affordable renting;
Reducing the currency of planning permissions;
Employing a £3 billion fund to help smaller building firms compete; and
Putting the question of further tightening of energy performance standards back on the agenda, albeit without any specific proposals at this stage.

This patchwork of measures, however, comes nowhere close to fixing a shattered system, as our response below highlights.

The Present Situation

Successive governments over the past 50 years have failed to properly to address the ‘housing problem’. The stark reality now is that:

House prices in the UK are the highest in the world, except Monaco.
Construction of new housing has been decreasing steadily since the 1970’s.
Housing in Greater London is exorbitantly expensive, with a price to income ratio of 8.5 compared to 5.0 for the rest of the country.
There is an overall shortage of inexpensive (‘affordable’) housing across all forms of tenure, almost everywhere.
New houses are about 40% smaller than those in similar European countries.
The housing stock is not just deficient in absolute terms, much of it is in the wrong place and is of very poor quality.

Current Complications

The situation is further complicated by such factors as:

A planning regime so unimaginative, rigid, restrictive and subject to locally vested ‘NIMBY’ interest, that housing tends to be built where the development constraints are least, rather than where effective demand is greatest.
Green Belt policy that is not just obsolete or outmoded, but conceptually wrong. Land, and landscapes, of truly high environmental quality should actually be better protected, if not positively enhanced. Meanwhile, swathes of ‘brownish’ urban ground and poor-quality peri-urban farming terrain could readily be released. Greater sense and selectivity should be the watchwords.
Housing markets are insufficiently flexible in terms of size, style, type and tenure. They cater badly for the old, the young, the alone, the mobile, the transient, and the home-worker – let alone the poor and the destitute.
Many government perceived ‘solutions’, such as Help-to-Buy, Inheritance Tax Reform, higher taxes on Buy-to-Let, and ‘Bedroom Tax’, might play to the electoral galleries, but are, in practice, invariably counter-productive.
Even the differential Stamp Duty imposts, widely acclaimed, have the effect of reducing mobility and stagnating the market.
Council Tax has not been subject to a proper revaluation since 1992, so that the tax levied bears little relation to underlying property values, and the consequent ‘equalisation’ system plainly works against more progressive planning authorities.
Few politicians dare to embrace and promote really radical reform. The housing crisis is capable of mindful rectification, but momentary ministers lean towards policies that treat the surface symptoms, rather than tackle the root causes.

The one overriding feature of vital housing policy reform remains, as it has endured for the past half-century, the fundamental prerequisite to concentrate crucially on the ‘supply-side’ of the market (in terms of both quantity and quality), and not continually tinker with ‘demand’.

Options

In addition to the simple imperative of making more land available, Hillbreak would offer three options to help solve the persisting shortage of affordable housing.

Meaningful urban intensification complemented by more Garden Cities, Towns and Villages. We need to place even greater emphasis on executing good urban density, for which the contemporary examples in the UK are few and far between. The intensification and continued renewal of our towns and cities, including a key focus on suburban neighbourhoods and hubs centred on decent public transport and green infrastructure, is vital. In this regard, our work last year with British Land and Deloitte on meeting the needs of London’s growing population is pertinent. In parallel, we have a few new ‘Garden’ projects popping up as a testament to the enduring legacy of Ebenezer Howard, and admittedly more promised. However, it really requires a multiplicity of these numbers to have a meaningful and meritorious effect. Perhaps the “Development Corporation” approach merits a revisit.
A Unified Infrastructure Fund. International investment monies are seeking long-term, certain and secure havens almost as never before. We propose that the government should orchestrate the assembly of top investors – insurance, assurance, mutual, private equity and sovereign wealth – to form a Unified Infrastructure Fund, independent of, but underwritten by (not debt!), government, to finance planned new developments and the necessary framework of services and facilities.
Tax Increment Finance (TIF). Although the idea of TIF has been around for quite a while, and successfully deployed in many countries across the world, especially in the United States, where it started in the 1950’s (Illinois alone has over 900 districts), somewhat surprisingly it has not caught-on well at all in the UK. This is despite strong campaigning from such organisations as the Core Cities Group, The British Property Federation and many Chambers of Commerce. Put very simply, TIF is an investment tool for funding infrastructure and other related development which promotes growth and captures locally generated value and revenues. The potential for TIF’s is, we believe, utterly enormous.

In all this, we believe that quality and ‘placemaking’ should be central to the planning and development of new homes and neighbourhoods, inspired by and capitalising on local assets and potential. The intention always should be the creation of excellent places that promote health, happiness and well-being.

A ‘Royal’ Recommendation

We think a Royal Commission on Housing should be established to inquire into the persisting housing crisis. This would ‘imagine ahead’ to envision the prospect of a healthy market tomorrow for all types of tenure across all locations, and ‘plan backwards’ to identify today the necessary policies, plans and programmes to achieve it. It would have a fixed timetable, say two years, be politically, professionally and societally ecumenical in its membership, headed by remarkable and respected figure(s), and consult widely, wisely and well. Surely, it is not beyond the wit and wisdom of governance at all scales and across all divides to unify for such a noble and common purpose?