THE MARKET IS BROKEN; CAN WE FIX IT? NOT WITH THIS WHITE PAPER
Published 23 February 2017
The Government has published its long-awaited White Paper on Housing – something eagerly anticipated by the construction sector throughout the country, and nowhere more so than here in Norfolk. Much talk at planning and built environment seminars over the past 24 months has speculated the revolutionary changes the Housing White Paper would bring to force. Would the new strategy signal a step-change in the way the May administration will tackle Britain’s well documented ‘broken housing market’?
The paper itself was eloquent in spelling out the problem which most of us knew already existed: not enough new homes being built, a decade of the squeeze being put on smaller house builders, lack of finance to both build and buy homes, a protracted and bureaucratic planning process which is under-staffed and under-funded etc.
While Sajid Javid’s 106 page tome adequately articulated what we already knew, in truth it didn’t offer a huge amount in the way of solving those problems, and certainly does little to add anything new to speed up the supply of housing.
In fact, in some cases it seeks to impose new planning restrictions, or curtail existing planning flexibility, and it is planning that most of the delays occur. It is no good urging house builders to bring sites forward if the Government is not going to fund the extra planning officers, environmental experts, highways specialists and so on which are needed to make that happen.
Building at scale still exposes commercial developers to significant financial risk, and this is why just ten large firms now build six in every ten new homes in the UK. The credit crunch saw many smaller builders disappear from the market, and while the White Paper has introduced an infrastructure fund to help such firms bring schemes forward, these are the very companies which will find getting through the planning maze most problematic.
Unsurprisingly, perhaps, shares in the UK’s largest house builders jumped after the White Paper was published.
Perhaps the most radical change in thinking demonstrated by the Paper was a recognition that the aspiration to home ownership is not the Holy Grail that generations of Conservative politicians have held it to be. The importance of the private rented sector is acknowledged; but measures to provide tenants with more secure tenure through longer rental periods and protected rents could drive investors away from this market just as we need the sector to grow – it’s a delicate balancing act.
This long-awaited document, billed in advance as revolutionary and visionary, risks being remembered as a political buoyancy aid which does little to fix what everyone agrees is a housing crisis. Our construction sector needs a properly thought-out strategy to help it contribute to fixing the problem; sadly this White Paper does not provide that.
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