There are few greater scandals in Britain than the housing crisis. Every year we are building less than half the new houses we need, and prices are continuing to rise. The young are particularly hard hit: a few years agoShelter reported that two and a half million people were putting off starting families because they did not have a home of their own.
Housebuilding can also be a vital spur to growth. Constructing hundreds of thousands of homes helped Britain survive the 1930s depression, and was at the root of the Brazilian economic miracle four decades ago. Some years back the Centre for Economic and Business Research calculated that trebling housebuilding would create over 200,000 new jobs and increase GDP by £75 billion.
So George Osborne is absolutely right to focus on housing as one of the key issues in his “productivity plan” published today. But if he is to get the nation building again he will have to avoid the mistakes of the coalition government, which provoked widespread resistance, not least on the Tory backbenches, through proposing a virtual free-for-all through its controversial planning reforms. The National Policy Planning Framework(NPPF), when finally published, was a more sensible document than originally drafted, thanks largely to a campaign by the Telegraph, but many rural areas were still placed under siege and backbench protests intensified. George Osborne was right
In themselves, the reforms did far less than expected to increase housebuilding. Claims in today’s document that they are “working” because “planning permissions and housing starts are at seven year highs” should be taken with a large pinch of sodium chloride. The increase appears to be largely to do with the recovery from recession, with some assistance fromthe Government’s Help to Buy programme.
And any growth that has happened has been at the cost of public alienation against which the Conservatives themselves warned before the 2010 election, saying that bad planning “gives local communities little option but to rebel against Whitehall – and all too often against the notion of development itself” .That is what happened, and in spades, making much-needed housebuilding even more difficult.
So the Chancellor needs a different approach, and there are some signs that he has learned some lessons. The biggest among them is a new focus on brownfield land, rather than open countryside, for development –something long urged by this newspaper. This is a big U-turn. The last government scrapped longstanding targets, under successive administration, for building on previously developed land that had saved open countryside, stretching in total over an area seven times the size of Southampton. It also stopped keeping complete records of brownfield land after 2010, and the term did not even feature in the draft NPPF.
It has been back in fashion, however, since last summer, when Mr Osborne called for an “urban planning revolution”, and today’s document gives some idea of how he plans to accomplish it. Legislation will be brought in to establish new, statutory, registers of previously developed land suitable for housing and to grant automatic planning permission in principle on the sites identified in them, giving England a ‘zonal’ system for development, as is in place in many other countries.
This is broadly to be welcomed, but with some caveats. Planning experts say that countries with zonal systems usually have quite tight constraints on, for example, the design and quality of what can be built on them; abolishing the need for planning permission, without putting something of the sort in place, risks merely constructing tomorrows slums. And more than a few brownfield sites are important for wildlife: two evocatively named species – the Streaked Bombadier Beetle and the Distinguished Jumping Spider – entirely depend on them. Ending the need for planning permission puts it at greater risk.
Also welcome is ministers’ rhetoric about another of our campaign issues, preserving Green Belts, which both prevent urban sprawl and assist regeneration in city centres. Sadly, however, they do not feature in today’ s document, while something that does – plans to “deliver higher density development” around “commuter transport hubs”- may contradict the ministerial assurances, as many such hubs are in Green Belts.
And worryingly, open countryside elsewhere may be put at more risk. Big housing estates may be waved through by central government without locals having a say – something the coalition considered but then dropped as inconsistent with ‘localism’ – under plans to legislate to allow “major infrastructure projects with an element of housing” to be determined in Whitehall. And though the document proposes speeding up implementing or amending local plans, it looks as if councils without them (about half the total) will remain at the mercy of speculative builders wishing to put developments wherever they like.
Open countryside may be put at more risk (Alamy)
Another retrograde proposal is to scrap planned improvements in energy efficiency standards for new homes, which stands to benefit builders much more than buyers. It will make houses cheaper to put up, but they will probably be sold at much the same price, and will be much more expensive to heat.
Above all, however, the government assumes too easily that freeing up planning will get more houses built and that building more houses will necessarily bring down prices. Housebuilders often sit on land, while its value goes up, instead of developing it: at present they are holding enough land, with planning permission, for 400,000 homes, enough – even if built in a traditional terrace – to reach from London to Rome.
They also naturally prefer to build expensive homes than cheap ones and may well restrict supply to keep prices up. And supply and demand works differently in housing than many other markets; the relatively wealthy often buy second and third homes as investments or to rent, pricing out those who most need them.
So despite some improvements in today’s document, the Government still has a way to go in working out how really to tackle Britain’s scandalous housing crisis.