How Can We Fix Our Broken Housing Market?
The government’s new Housing White Paper sets out four steps to fix England’s broken housing market. They are:
- Planning for the right homes in the right places, focusing on improving local and neighbourhood plan-making and increasing the supply of housing land.
- Speeding up house-building by tackling planning, infrastructure and skills constraints.
- Diversifying the market, by encouraging more small and medium sized developers, institutional investors and housing associations, and through innovation in house-building.
- Helping people now by supporting people to buy or rent homes.
Interestingly, the White Paper signals a shift in the government’s message on home ownership. Emphasis on extending home ownership has given way to a broader focus on all tenures, including more building for private rent, more support to housing associations and new incentives for small house-builders. Whilst the Conservatives’ instinctive commitment to owning bricks and mortar remains, there is now clear recognition that rising rents, quality standards and the security of private rented tenure have to be tackled.
Boosting the Supply of Developable Housing Land
A concerted drive to increase house-building in all sectors is essential. Not since the 1970s have housing completions reached the 250,000 mark. Back then, local authority housing development rates were on par with private sector developments. Housing associations now contribute around a third of new homes, but the gap to be filled is substantial at a time when local authorities face severe financial constraints. It needs innovative solutions to assembling land, financing public and private development and speeding up the building process.
Boosting the supply of developable housing land is critical to all of this. Communities Secretary Sajid Javid’s statement to parliament put it bluntly: ‘If you’re not making enough land available then you’re not going to get the massive increase in supply that we want to see’. Many of the measures the White Paper outlines are directed at increasing the supply of housing land and accelerating its take up for development.
Much responsibility for making this happen is placed on the shoulders of local authorities to ensure they get the numbers right and they are as ‘ambitious and innovative’ as possible to get homes built. Up-to-date local plans should be based on ‘honest’ assessments of the need for new homes. New tests of performance in housing delivery will be applied, with potential to trigger policy responses to increase land supply where housing requirements are not being met.
The Right Type of Housing in the Right Places
The White Paper also highlights the need for the right type of housing to be provided in places where people want and need to live. This means some tough choices ahead. Attractive, high demand areas may not have sufficient housing land allocated, or the political consensus to support substantial new housing development. Brownfield sites have an important contribution to make, but this type of development brings additional challenges in terms of costs and viability.
Identifying the Right Housing Need Figure
Like many working around the local plan process, Regeneris has grappled with the complex challenges of objectively assessing housing need. On this issue, the White Paper confirms that the methodology will be standardised, but those of us waiting for details on its preferred approach will have to wait a bit longer: proposals will be published for consultation later in 2017. All we know from the White Paper is that the government intends the new methodology to be in place by April 2018.
If housing land supply and housing numbers are to be driven up, this new approach to determining housing need will have to:
- Fully reflect the population growth that England might expect to see in future years. Recent years have seen population increases exceed the government’s projections. Whilst there is no certainty that this will continue in the long run, it will be important not to under-estimate future growth in setting housing requirements.
- Factor in the increases in housing supply nationally that will be necessary to address the country’s affordability problems. Providing just enough homes to meet population demand will not necessarily shift the demand-supply balance such that price pressures might start to ease.
- Ensure that the scale and location of housing development supports economic growth.
We believe that the economic role of housing must be an integral part of getting the right housing numbers in the right places. It is about both capturing the positive benefits of new housing development and supporting future economic growth in uncertain times.