Sir Keir Starmer, in his interview with the Times Political Editor Steven Swinford, vowed to be tough enough to take on vested interests, accusing developers and landowners of building too little housing in order to drive up prices. This is a hostile, poorly informed accusation which will antagonise an important and powerful section of the property industry. Crucially Labour will not achieve its housing objectives with this confrontational mind-set. Of-course developers and landowners exploit the broken planning system. Why not?
Currently a large part of the housing land supply market is an alliance of opportunists and manipulators who understand how to exploit the development plan call for sites and thereafter how to game the system.. Attacking these players is misguided. They operate, and remain fully entitled to do so, according to normal commercial principles. It will be quite wrong, is short sighted and will fail if Labour attempt to penalise them for their actions based on long established, legitimate and accepted attitudes. Their commercial response, as stated in the earlier blog today, will be to close down, to go into hibernation mode. Their non-cooperation ensures long delays; the probability of a change of government, and with it another change of policy.
Can these vested land interests be co-opted? Yes, but it takes a lot of time. The objective is to ensure that future medium and large scale land supply releases are entirely in the gift of local communities. They must take over spatial control of their areas, and in doing so control the timing and location of future housing land releases in their areas. Local councils must be therefore be given the power, the confidence and the support to take over control of all spatially significant potential building land long before it may be needed for house building. Acting far ahead, this advanced transactional intervention will take place at market values reflecting existing uses, countryside values in rural areas and brownfield values in urban areas, and not reflect future development value. Valuers working in the market will tell you this means buying potential building sites 10 /20 years earlier. At this point of time, there will no hope value, because the added value due to the expectation of a change in use to a higher value will be too remote and too uncertain.
Speculators land interests, alongside landowners land can then be purchased at extra little cost, because the hope value will be negligible. Shrewd councils will seek to be far ahead, ensuring up to 100% of the value of uplift created when they issue planning consents goes to their ratepayers.
Proceeding on these lines needs local areas to cooperate spatially and follow consistent policies for decades. Such co-operation must start in Westminster. I wonder if Keir Starmer is ready to make the opening offer to Rishi Sunak? And, if he did, I wonder how the PM would reply? A refusal would lose a lot of potential brownie points. At stake is nothing less than England’s future economic growth.
There is an easily overlooked dividend for local areas. Faced with a politically united, long term, council led new source of future housing supply existing exploiters of local shortages will be compelled by commercial reality to bring the existing generation of potential housing sites forward at a faster rate, which is what Labour want.
Ian Campbell
17 May 2023
