Wednesday’s Budget is an opportunity to light the touch paper to a revolution in housing supply. Not just to talk about it, but to focus on home building and to deliver supply like no previous Government has since Ted Heath’s.
The Conservatives, in their pre-May election pledges, talked a lot about this subject. They promised to:
• Provide 200,000 starter homes by 2020 at a 20% subsidy for those under the age of 40
• Build 275,000 affordable homes built by 2020
• Continue with Help to Buy
• Introduce Help to Buy ISAs
• Expand Right to Buy
• A £1bn brownfield regeneration fund
• Create a London Land Commission to identify publicly owned land for development
All of these supported by a November Autumn Statement that saw the first overhaul in Stamp Duty on property purchases since 1997.
So the scene is set, with the first Conservative budget in 18 years, to start to deliver an agenda that strongly promotes a home-owning ideology. Which is great.
Except that with all most all of their manifesto’s emphasis on fuelling demand, without grown up action on supply and, basically, how many houses are actually built each year, the resulting imbalance in buyers versus stock will surely lead to further rising prices, particularly in the south east, further fuelling the issue of affordability.
Labour’s election rhetoric pledged to build 200,000 homes each year by 2020. And the Liberal Democrats plumped for 300,000 each year and, whilst laudable and ultimately sufficient, was not accompanied by any plan as to how to achieve such an aspiration. No administration has achieved this level since 1971.
But the Conservative manifesto actually lacks any commitment on overall housing numbers to be constructed, which does seem mighty odd. But perhaps less so when you consider that the previous coalition Government, only managed to oversee the building of a paltry 140,000 homes in each year of its 60 month tenure. Just over half the level that is actually needed.
But they must. Governments, especially this one, absolutely have to guarantee that they will set a scene that allows for sufficient numbers of new homes to be built. Not just cheap words. But a promise and one that is kept.
Number 10 revealed this week that the Budget on Wednesday will include an initiative to transform disused railway land into 150,000 homes. And that’s a start but hardly enough to fill a gap in the next five years’ housing requirement of around 550,000 properties based on the current build rate versus what is required.
20% of households are single occupant these days. The population is living longer. Net immigration is now 250,000 people per annum. Therefore the gap in supply of adequate roofs over heads is acute and a problem that is ticking ever louder.
Greg Clarke, Secretary of State for Communities and Local Government, and Brandon Lewis, Housing Minister and my old chum from our Brentwood Council days, would do well to think seriously about these efficiency innovations to tackle what otherwise will escalate to a full blown crisis in no time at all:
• Identify ALL developable land owned by all UK public sector organisations and legislate to force them to provide it for building. By way of example, Central and Local Government own 180,000 land assets including thousands of hectares of land but, for instance, 100 pubs, 60 theatres, 40 hotels and 100 golf courses. And an airport. It is estimated that £380billion of assets are under public ownership*
• Ascertain ALL of the empty homes owned by government departments such as the MoD and implement a strategy to redevelop/refurbish those which are reasonably surplus. Then to be sold off or transformed into market rent and social rental stock**
• Tax relief for high net worth individuals and companies in exchange for them investing cash into social housing schemes. Each scheme would provide a yield and would be traded to subsequent HNWs/companies after five years of ownership. Why shouldn’t the private sector assist the dearth of affordable housing supply?
• Introduce ‘Land-bank tax relief’ to encourage property developers to release land that they hold, more quickly***
• Protect our Green Belt. But review land within the green belt that is tainted and not ‘green, pleasant and open’ and define as grey belt. Such as old industrial estates, scrap yards, property locked roadside plots etc. This will allow more development on such sites and remove the default refusal recommendation from planning officers
• Remove the politics from planning committees. Designate controversial, NIMBY sensitive decisions and on sizeable applications to adjoining councils’ committees
Pursuing the suggestions above will unlock enough land to build hundreds of thousands of sorely needed new dwellings in this Parliament.
Shouldn’t we get a move on?