People need homes, not empty promises

The government set itself a target to build 300,000 homes each year, which it has consistently failed to achieve. And it has little consideration for where these will be built other than on greenfield spaces.

The Department of Levelling Up, Housing & Communities (DLUHC) acknowledges a shortfall of 348,462 new homes. Michael Gove, the Levelling Up Secretary, has pledged to hit the targets by the next election. But at the same time as promising this he has made local housing targets advisory and made changes to planning laws that meant that many planned developments have been frozen.

Planning consultancies and developers argue that these changes will result in a shortfall in England of between 50,000 and 100,000 new homes over the next five years. The changes have affected plans for new homes in both rural and urban areas.

Developers are keen for more profitable greenfield sites to be released, and they will exaggerate the housing need. But neither they nor the government are serving Britain’s need for housing.

Relaxing rules?

The government proposes to relax planning rules in the centre of cities to make it easier to convert shops, restaurants and other commercial property into residential accommodation. This seems an attractive way of making use of empty office space now that working from home has impacted on commercial usage.

But, in reality, the availability of commercial property and the technical issues that can be associated with suitable conversion will do little to decrease the shortfall. It has all the hallmarks of a diversion from the real problems.

Gove has announced the launch of a £24 million planning skills fund to introduce further flexibility around office and shop conversions. It will include the introduction of a “super squad” of planners and other experts to support local areas.

But the DLUHC has handed back £1.9 billion to the Treasury budgeted for 2022-23 because it hasn’t been able to spend it. The government says that’s because of rising interest rates and uncertainty in the housing market after the pandemic – and don’t worry they will spend the money in later years.

The amount handed back included £255 million for new affordable housing and £245 million to improve building safety. It seems that the government wilfully refuses to learn the lessons from the Grenfell Tower fire.

Funding for local authority planning departments fell by 55 per cent between 2010 and 2020 according to the National Audit Office. The latest proposals announced by Gove are no more than smoke and mirrors when set against this financial attack on workers. Even property developers say that housing isn’t a priority for this government.

The parliamentary LUHC Committee published a report on the new planning proposals. It says that the government has not shown how the policy of scrapping mandatory local housing targets will directly lead to more building of new homes.

Where will they be built?

Indeed planning consultants told the committee that the changes would cut annual housebuilding to around 150,000 units. But this does not address the key questions. Where are houses going to be built? Will they be affordable? Who is going to build them?

It’s no good earmarking more farmland and countryside around existing towns and cities and calling it planning. Decisions have to be made about competing land use and how city regeneration schemes can be made to work.

‘It’s no good earmarking more farmland and countryside and calling it planning…’

A constructive, planned approach could also provide some relief from the lack of progress in the social housing sector. The damage started under Thatcher in the 1980s with many houses sold off under the Right to Buy scheme, drastically reducing the availability of family homes for rent.

The housing association movement in the 1970s and early 1980s was made responsible for bringing the renovation of a great deal of dilapidated housing, particularly in the inner cities. But many have now taken on the mantle of quasi-property developers, losing sight of their progressive history and burdened with debt through borrowing.

The government does nothing to discourage this: it wants not more homes at genuinely affordable rents, but “more homes of every kind” – unaffordable for many at market prices, and often built on greenfield sites. While new homes targets are missed, those trying to buy into the existing stock struggle to find enough for a deposit, pay existing mortgages as interest rates increase, or find property in an overheating rental market.

According to the Halifax the average first time buyer needs a deposit of over £62,000 to buy a property. This study found that in 2022 average property values for first time buyers were around 7.6 times the average of UK salaries. That rises to 10 times the average salary in areas of London. As a result, the majority of people are now getting their first mortgages in joint names.

In mid-2022 the Halifax reported that housing availability had fallen to its lowest level on record. The failure to plan is having a direct impact on workers being able to access housing and then pay for it. The report found that, since the start of the pandemic, house prices have risen by 16.8 per cent while earnings had gone up by only 2.7 per cent over the same period.

For those who already have a mortgage, repayments are an increasing burden. The Office of National Statistics looked at the loan to value ratio, the size of the loan relative to the value of the property being purchased. They reported a 61 per cent increase in monthly repayments on a semi-detached property in December 2022 compared to a year earlier. Similar increases were seen on other types of property.

Unaffordable

In December 2021 a loan to value ratio of 75 per cent and a budget of £1,000 per month would enable someone to afford an average semi-detached property in nearly two-thirds of local authorities in Britain.

A year later an average semi would be affordable in less than a third of local authority areas.

The story is much the same in the private rented sector. According to HomeLet Rental Index the average rental price for a new tenancy in the UK in July 2023 was £1,243 a month, up by over 10 per cent from last year. The figures for London were far higher, £2,109 a month, an increase of 12.9 per cent.

We need to start planning and re-building to meet increased housing demand from a growing population, changing demographics and inadequate old housing stock. We also need to plan for the supporting infrastructure that is currently inadequate even for the existing population – transport, schools, GPs and so on.

We need a house building programme that prioritises proper planning for people rather than property developers. As a country we need farmland for our self-sufficiency in food production and we need our countryside – as does our wildlife. So relying on profitable greenfield sites isn’t the answer.

Increased house building also provides an opportunity to create jobs and develop skills in planning and in the construction industry, including the development of high-quality apprenticeships for young people. There is also an opportunity to source building materials and equipment from British factories, further safeguarding and developing employment and skills.

But this isn’t going to happen without us making it happen. The inability, or more to the point, the unwillingness of the government to build new housing within our towns and cities, develop safe and integrated planning and ensure existing housing is affordable is evidence of that.