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How to Build More Houses… It's Too Easy to Blame the Housebuilders

on Monday, 19 March 2018.

The UK has faced a housing shortage of varying degrees of intensity for decades.

Successive governments have tinkered with the planning regime, each time promising a new system that will simplify and speed up the process, thereby enabling hundreds of thousands of new homes to be built each year. What has accompanied the latest announcement from Theresa May is a call to arms to the house builders, with a not so thinly veiled threat that those house builders who hoard land and build the minimum houses they can to maximise profit will be treated accordingly when they seek future planning. Hardly the encouraging carrot we need to solve the issue but is it really that simple? Is the housing shortage all the fault of developers? Of course not.

There are some very complex macro and micro-economic forces at work here which needs an holistic response and engagement of the developer industry, as one key player in this issue. Local authorities, lenders, architects, and universities and colleges all have a role to play in helping provide the platform to see new homes built in Britain. So if it is not solely the fault of house builders, what else should be looked at?

  • The planning process itself - we need an honest debate about the National Planning Policy Framework and where exactly we want houses built. Greenbelt or not? Assumptions as to the develop-ability of land? And then having a framework that delivers on that.
  • Local authority resources - a more streamlined system that encourages the right sort of planning, within clear guidelines, still has to be managed and organised. That means making sure local planners are resourced accordingly. There must be some best practice that can be shared from the best run LPAs (of which there are many) to help make sure the right decisions are made within the expected timeframes. 
  • Nimbyism… - Localism means that developers have to take account of the views of the local population, as do the local politicians (or the Secretary of State on call-in of large decisions) but does that always help? Take the example of a local college seeking to enhance its tired campus and which has to sell off part for much needed housing. Too often, too much time, money and energy is often spent on having to convince the local population and the local politicians about the merits of an alternative housing scheme.
  • …And politics….. - There have been decisions or delays caused to planning applications which then rely on landowners/developers having deep enough pockets (and time and energy) to then appeal or, ultimately, seek judicial review. Should planning decisions be as "political" as they sometimes are?
  • Skills shortage - each recession of the past 30-40 years has seen a not so steady decline in the number of skilled brick layers, carpenters and electricians. That won't improve unless there's a concerted effort to recognise we need to plug that gap and apprenticeships and real trades are properly funded accordingly. We also need to look at how houses are being built, taking on board new methodologies which can improve the actual housebuilding process.
  • Funding and the wider economy - the UK has weathered some pretty tough times over the past 10 years. No one likes uncertainty - banks, developers, home owners, nor the government. Brexit is still looming large as an unknown factor that could (or could not) have a significant impact on the UK economy and people's sense of optimism. That feeds into developers building homes that people want to buy, people wanting to move up the housing ladder and banks feeling confident enough to lend money.

The government is right to raise the question about housebuilding. However, the answer is far more complex than just targeting the developers. We need a co-ordinated overview about what does not work and why.  This is too big an issue to get wrong.

For more information, please contact a member of our Commercial Property team, or complete the form below.

This article originally featured in Downtown in Business Birmingham.

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