A lot of people now have an opinion about the causes and the solutions to England’s housing crisis. This is welcome if the debate is informed. Sometimes it is not. More often commentary is about a point of detail. Which is premature and indeed at this stage of change usually pointless.
Solving the housing crisis will only happen if the appropriate barriers to building are changed. These barrier replacements must happen in the correct sequence. Right at the start is the objective. To create the mechanism for accurately identifying and warranting deliver of the building land. Do not forget this mechanism does not exist. Now that the Commission for New Towns is dead, an English delivery example does not exist. The Crown Estate does a fine job creating premium values, but it has no statutory powers. Building these delivery structures is the responsibility of central government.
Warranting delivery means local councils must take spatial control of their future building land. Self-funding through land value capture and local rates adjustments deals with the financial side over a decade long cycle. The Treasury can stand aside when self-funding takes over. Creating local spatial policies from scratch will need new estate management skills. This expertise creates the premium values local residents crave. Presented with this possibility grumpy multitudes will turn unto welcoming hosts. Now, and only now with these functioning spatial policies in place, do we pay close regard to the tenure mix. It is a mistake to put mix spatial and tenure policies, and a bigger mistake to put tenure first. Spatial is the contentious nettle. It must be grasped first.
The level of spatial, procedural and financial misunderstanding is colossal. Perhaps a football metaphor might help to explain how we solve the housing failure. The government minister is the team coach. Competent and well intentioned, but lacking the right expertise. The local councils are the players. A mixed bag, with a good number of surly players. The coach knows what the team has to do if the nation is going go win. The players too want to win too. But some individuals have different agenda. Above all they have different skills, very different spatial experience and as a result many think their local knowledge trumps the coach’s right to make all the strategic decisions on the field. Learning to play as a team for many players is novel because it demands a different habit of thinking, putting one team mates first for example. Training to become competent at delivery is time consuming. Learning new skills is difficult. Unlearning selfish old habits is hard. The crowd wants a win too, but is unsure where its own loyalties lie. They can be fickle. Where does this take us? Into an examination of confusion. A coach who needs to have the confidence to follow his belief on how to win despite growing barracking from the stands. Players whose bad teamwork and self-indulgent truancy has caused a run of failures, so bad that few want to join their team except blind zealots or the rare idealist. And supporters in the stands hoping for a win and fearing another loss. There was an interesting example of muddle and confusion in the media over the weekend.
The Times article headline is Use it or lose it, developers warned as Labour targets land banking’; by Whitehall Editor Chris Smith with Tom Howard & Alistair Osborne (Friday, 13 December 2024) in an interesting, revealing and scary piece about who dictates when new homes are built. Good investigative work by the writers. In this case the coach, who is Matthew Pennycook has some insights into what the problem seems to be. As Housing Minister he has told developers, who (confusingly have an understanding with the regular football players, the councils they can swap places when like without asking the coach). Probably not a good technique by coach. So he says they “must turn supportive words into action, bringing forward new sites and building them out at pace’. The coach has been talking to them and believing their warm words too! No one told the Minister, sorry coach, that these on and off players, or reserves called developers are not signed up to the coach’s agenda. Snag is professional football players do not have a private agenda. Well the developers do. Which is fair in our capitalist system. I warned against naive thinking some blogs ago but that is beside the point. Businessmen, despite claiming to understand and subscribe to the coach’s agenda for growth, will always have their own. It is called profit They are adept at it. After all few business men act against their own best interests. Veteran entrepreneurs like developers do not volunteer to dump their own best interests even if their are recruited by the coach’s players and pretend to play the game,
It is very plain. The coach’s players needs lot more training. Adam Hug of the Local Government Association who sees himself as the player’s spokesman and councils’ captain, is quoted as calling for ‘use it or lose it’ once sites have been allocated and granted permission. He adds ‘ That this would include being able to charge full council tax for every unbuilt development from the point the original planning consent expires’. Another captain, maybe in reserve, Richard Clewer of the County Councils Network says ‘ We desperately need to build houses, but to do that you have to force the houses that have planning permissions to be built’. Then he too apparently said that developers had every reason to slow building rates so that house prices did not fall, arguing “”There are very competent large companies very focussed on their bottom line and there is no way they are going to build at rates that undermine their profit margin”. Precisely. Reality could be stated more plainly. Let’s hope the coach heard and takes action.
Mr Clewer seems to think that rates penalties will solve the problem. He is wrong. Developers and their land owning partners will put all their other building sites unto mothballs, and wait for nonsensical policies, as they believe, to be reversed. Unless of course Mr Clewer thinks the Conservative and Liberal Democrat parties will join in this crusade against naughty developers. I do not. Future building land supplies will be placed in hibernation.
Of course the developers do not say they have two agenda. That will not be their response. Instead they reject the allegation that they delay bringing forward building land by focusing attention on the next site due to be built out, as indeed does Dean Finch, chief executive of Persimmon who says ‘It’s not in our interests to sit on that’ by which he means the next site. Another unnamed but sharp eyed house building executive said, so The Times report reveals that threatening them was ‘ the politics of the sixth-form common room. He is correct. The fascinating insight is that the house building industry plays this game of billionaires poker without seeing the steamroller coming round the corner. . A spokesman for the House Builders Federation correctly reminded readers the Competition and Markets Authority found that ‘Housebuilders do not sit on land with implementable permissions”, which is true. But this honest statement tells us nothing. about what they do with their stocks if building land with building potential but without implementable permissions. Well, actually they do get it. They are just leaving a false trail. What they do not get is that by mortgaging the future quality of life of local communities they write their own epitaph.
As the honeymoon ends, and reality dawns, it is clear this football coach has a long way to go. His team will not win without a crash training programme in civic duty and estate management. Investors who have enjoyed the rewards of decades of exploitation rationing policies better ask their developers team executives if they know what they are doing? Put simply, the Minister will soon realise, his council team players must fast be turned in spatial executives with commercial skills of the developers without losing sight of their civic objectives by playing to their strengths, using their statutory powers and taking over control of the future supply of building land in their areas. This will take time, as no doubt will be explained to them by the coach at the interval. If the well regarded Mr Pennycook can open their eyes, he will deserve a prize,
Ian Campbell
16 December 2024
