It was billed by the Government as the biggest shake up to the housing sector in thirty years and this level of ambition was needed from the housing white paper published last week to fix Britain’s broken housing market. But did the Government deliver on its rhetoric?
Certainly, there should be optimism about Sajid Javid’s statement that “our obligation is to build many more houses, of the type people want to live in, and the places they want to live” – and the strategy did include a number of measures in the strategy that will help to make the housing market work more effectively. There was a welcome shift away from focusing purely on home ownership towards supply side policies, including building more housing of all tenures and increasing the supply of suitable land for homes. Finally, the strategy included provisions to enable developers to build homes more quickly, to ensure local authorities have plans in place to tackle housing demand in their areas, and to encourage higher density building in cities.
Ultimately, however, the white paper was not the radical shift that was trailed or needed, for two reasons – the lack of recognition of the different housing challenges that places up and down the country face, and the failure to address the fundamental problem of land supply in cities with high housing demand.
The need for a place-based approach to housing policy
In some policy circles a lot has been made of Theresa May’s background as a geographer, but this has not led to an appreciation in the housing strategy that different places have diverse housing needs.
Take, for example, Oxford and Burnley – two very different housing markets, but which are treated in broadly the same way in the housing strategy because of its national perspective. Housing supply is not the priority in Burnley, where homes are four times as much as average local income – instead, a much bigger issue is that 13% of residents have no formal qualifications. In contrast, Oxford has a thriving economy and skilled workforce, but homes are 17 times higher than average local income.
However, the white paper focuses resources and capacity for house-building in the same way in both places. Continuing to set housing policy nationally therefore compounds the challenges in both these cities – resulting in too few homes being built in high demand areas, and resources being wasted in places where other issues should be the priority.
Making more land available – including on the green belt
The need to address land supply is given more consideration in the new white paper than in many of its predecessors, but its primacy in causing unaffordable housing costs is not fully recognised. The biggest cause of city-by-city variation in housing costs is the availability of developable land, with high costs usually driven by a lack of supply of land designated for homes. Despite this, there remains a political tension within the Government between those who want to see more land made available to get more homes built, and those who favour protecting the green belt at all costs. At present this battle is being won by the latter ‘Shire Tories’, meaning that despite the useful white paper reforms, the most successful cities in the country will continue to become less affordable.
The choice to maintain the green belt around the country’s most successful cities is often the politically expedient option in the short term. But it comes at the cost of the homes that ‘Just About Managing’ families (who the Government has pledged to support), young people and these cities desperately need. It also results in the few developments that do go ahead being forced onto school playing fields and employment sites in cities, or leapfrogging the green belt into parts of the countryside which are arbitrarily deemed a safe distance from the jobs and opportunities of the city.
Although the Conservative manifesto ruled out a re-evaluation of the green belt in 2015 it is disappointing that the white paper’s language made it more difficult for local government to make these decisions. Now ‘all reasonable options’ must be considered before green belt land, which effectively results in an ‘anything but’ approach from planners rather than one based on ‘exceptional circumstances’. It therefore becomes even harder for cities to take up rational re-assessments of their green belt land.
The Government’s signalling also gives local politicians more cover to avoid the tough decisions on where homes will be built. Despite the growing evidence base pointing to the need to develop small amounts of green belt land for housing, politicians (including the Labour Mayors of London Sadiq Khan and candidate for Mayor of Greater Manchester Andy Burnham) continue to prioritise political expediency over practicalities on this issue – resulting in developable land being held back, and house prices becoming more inflated and less affordable.
Taking tough decisions at a local level
Yet despite the flaws in the white paper, there is a lot that can be done to address housing demand at the city level, but this requires taking tough decisions. For example the Greater Manchester combined authority has set out its spatial framework which included significant strategic release of green belt land across the city region. To meet their growth ambitions, the incoming metro mayor should back this to avoid homes becoming less affordable and housing costs choking off economic growth.
There is however more that could be done with regards to planning, to give cities the tools to deal with their challenges, and to create the conditions to support them in doing so. The fastest growing cities in the South of England are together calling on Government to change regulations to enable them to invest in revolving infrastructure funds. The commitment by the Government to simplify compulsory purchase orders and consider mechanisms that enable local authorities to capture land value uplift (and benefit from the resulting revenue) this year are both encouraging. Now cities must look at how they can work with the government and offer projects and capacity to pilot schemes before they are rolled out.
So while the housing white paper won’t bring about the much needed ‘radical shake up’ in housing, it did offer useful tweaks and a welcome change of approach towards supplying more land for homes and building more housing of all tenures. However in ignoring both the differences in housing challenges across the country, and continuing to rule out the green belt, the Government has limited their chances to succeed. High demand cities must make the most of what they can do, within the national framework, and take the tough decisions to build the homes they need.