Housebuilding has risen rapidly up the political agenda over the last two years as the Government courts voters with the hot-button issue of housing supply.
As recently as January, Theresa May declared fixing the housing crisis her “personal mission”, yet she has now welcomed her fourth Housing Minister since the last election.
The cabinet reshuffle in early July saw Dominic Raab become the third Housing Minister to leave the job in two years. When the music stopped next, Kit Malthouse had settled firmly into Raab’s vacant seat, earning him the dubious title of thirteenth Housing Minister in 15 Years. It was a loud and public blow to an industry that has been told it’s a priority as often as it’s been proven not to be. But it wasn’t the only blow we took on the chin this month.
Barely a week before the reshuffle, the Secretary of State for Housing, James Brokenshire, delivered a speech to the Policy Exchange thinktank in which he chastised developers for the 270,000 residential planning permissions granted in London that remain unbuilt. He reprimanded developers for “wriggling out” of commitments on affordable housing and infrastructure and suggested that housebuilders are wilfully taking up to 15 years to complete building on some of the country’s biggest sites. And while he was leveraged housing supply to court an electorate increasingly forced to rent, the Housing Secretory could not have more clearly demonstrated his lack of understanding of the issues facing SME developers, a group he promised to support three breaths later.
The reality is that the UK planning system is drastically at odds with UK housing policy. Preservation measures, parking restrictions, affordable housing targets and a lack of controls around planning approval all contribute to block house building. As an example, we recently had a planning approval postponed for two months simply because one of the council’s committee members had failed to read the proposal on time. This is a needless delay with the potential to significantly impact a developer’s business plan. If there were better controls around planning approval, and local authorities were penalised for such behaviour, this type of delay would be a thing of the past.
And then we have the Secretary’s 270,000 unbuilt residential units. It is an impressive figure that’s sure to galvanise voters, but how representative is it? For developers, a planning application is the culmination of months of research. They’ve already invested significant capital in the site, and the permissions sought are the result of extensive analysis of the local market. If the approval granted deviates significantly from the business plan, then the scheme could cease to be profitable all together. How many of these 270,000 unbuilt homes were simply not cost effective based on the permissions eventually granted?