BY a perverse irony, news that housing starts are now down 52% on a year ago arrives in the same week as the government gets advice that its targets of 2m extra homes by 2016 and 3m by 2020 may not be enough to meet demand.

In a report published this morning the National Housing and Planning Advice Unit (NHPAU) advises housing minister Caroline Flint that these are the only lower level of what is required in regional spatial strategies. The upper level is  2.3m by 2016 and 3.5m by 2020.

NHPAU chair Stephen Nickell made a valiant attempt to justify the new figures on the Today programme this morning under sceptical questioning from Jim Naughtie [go here to listen again].  There might be a severe credit crunch in the short term, he argued, but increased supply was needed to stop prices escalating in the long term. 

But Cllr Keith Mitchell, the Conservative chairman of the South East Regional Assembly, had a simple description for the new higher figures. He used Yvette Cooper's term for councillors who were resisting more homes: 'bonkers'.  

The chances of meeting even the lower of the NHPAU targets seem somewhere between remote and slim. The time when the government could confidently proclaim the need for more homes and the strategy for delivering them backed up by the Barker and Callcutt reviews and the NHPAU's advice seems more like 12 years than 12 months ago.

Even at the time the argument seemed questionable - in particular it seemed to ignore the effect of mortgage finance (the credit splurge that preceeded the crunch) and the difference between demand and need.

Now, with mortgages unavailable, the housebuilding industry in a state of collapse and planning authorities dominated by Conservatives who don't even need to say nimby, the delivery mechanism seems fundamentally flawed.

The only response at the moment seems to be to hope that the mortgage market will 'return to normal'. Something more radical than that is needed - and soon - if we are not to lurch from a credit crunch to a new affordability crisis.

Posted by Jules Birch, June 25

Posted in Affordability, Planning, Housebuilding

WITH the housing marketing plummeting and pressure growing on the public finances, today's call by the British Property Federation for new incentives for professional investment in the private rented sector could hardly be better timed.

House prices are falling at their fastest rate since the 1970s, housing transactions are at their lowest since 1978 (according to the RICS today), housebuilders' share prices are falling through the floor and the chances of meeting the government's 3m homes target look on the unlikely side of slim. And yet demand for housing is still growing: cue the next boom when this bust eventually plays out.

In a submission to the government's review of private renting, the BPF wants a package of incentives including widening the definition of affordable housing to include market rentals, special planning treatment for rentail-only developments, changes in stamp duty rules and reform of the structure of real estate investment trusts (REITs) to open them up to residential property.

And it wants a new concentration on what it calls build to let. Its research suggests a need for £100bn of investment over the next 15 years, and with the buy-to-let model dead in the water, it argues that can only come from pension funds and life companies. Giving planning permission for new homes restricting them to rental for a period of years would enable investors to buy property on a big enough scale and at a price linked to its rental rather than owner-occupation value.

It sounds like an idea whose time has come and one that will be attractive to all the political parties. However, there are two big obstacles to achieving it. First, is the growing pressure for increased consumer rights from bodies like Citizens Advice and the Law Commission. Institutions have long regarded calls for reform on issues like retaliatory eviction and length of tenancies with something close to apoplexy. The BPF report shows some signs of movement but it may need to go further.

Second is Treasury suspicion that calls for 'fiscal incentives' are really just a way for sharp-suited property developers to line their pockets at the government's expense - one explanation for the restrictive drafting of the rules on REITs in the first place. The Treasury may still need some convincing before it gives incentives for an expansion on a big enough scale to make a difference. 

Posted by Jules Birch, June 10

Posted in Finance, Planning, Private renting

IF the government is to succeed in driving through plans for three million new homes in England by 2020, there are few more vital battlegrounds than the East of England. Under a revised regional spatial strategy published today, one in six of them will be in the region: a total of 508,000 by 2021 - a 30,000 increase on previous plans.

The region certainly has land for new homes but the problem is that much of it is protected green belt land around existing settlements like Harlow and Stevenage. The government claims that the plan will actually result in a net increase of green belt.

However, that argument is unlikely to convince environmentalists. A report by the CPRE last week claimed that 1,100 ha of green belt has been lost to 45,000 homes since 1997 and its analysis started with a detailed run-down of the threat posed by development plans in Essex, Hertfordshire and Cambridgeshire.

The strategy itself is a closely argued case for sustainable development which sets a 35% minimum affordable housing target for new developments and addresses the key regional issue of water management as well as employment and transport.

East of England minister Barbara Follett was clear about the benefits in a speech at the launch event in Letchworth. 'The regional spatial strategy is a key milestone for delivering sustainable housing growth and tackling problems of homelessness, housing affordability and climate change here in the East of England,' she said. 'The plan went through a rigorous consultation where all views were heard. It is vital for all communities that the regional assembly, local planning authorities and developers continue to support the plan and work to quickly and effectively implement its delivery.'

But the problem for the government - and her personally - is political. Her Stevenage constituency (majority 3,139) is highly vulnerable to any Conservative exploitation of the plan - as are those of 12 other Labour MPs with majorities ranging from 6,500 to a mere 97. 

Posted by Jules Birch, May 12

Posted in Planning

CAMPAIGNERS for better housing often find themselves at loggerheads with environmentalists in a debate that quickly degenerates into one side shouting 'nimby' while the other mutters darkly about 'concreting over the countryside'.

So it's good to see a report today from the CPRE today that shows it is possible to campaign for both at the same time. The Campaign to Protect Rural England has long recognised that sniping from the sidelines is not enough - although it is quite prepared to stick the boot in as it did yesterday over the loss of green belt land -  and that it needs to do something about urban England too.

The report argues that one of the key pressures on the countryside comes from an exodus of young families from cities in search of housing they can afford. Not providing enough family-sized accommodation causes social division within cities split into neighbourhoods very rich people and very poor,  as well as growing strain on the transport infrastructure and greater strain on the supply and price of accommodation in the countryside.

The key, says the CPRE, is to increase the density of new development in cities - and the political will to overcome public resistance to higher density caused by the mistakes of the 1960s and 1970s. It settles on a density of 50 dwellings per hectare - enough to support transport links within 10 minutes' walk - as opposed to the 30 typical in suburbs but points out that popular Georgian squares in London have a density of more like 80.

That sort of message chimes clearly with that of housing campaigners warning that the existing push for higher density has merely resulted in more one- and two-bed flats for buy-to-let investors and a dire shortage of family accommodation. New London mayor Boris Johnson also made that one of his housing priorities.

It's much less clear where the political muscle - let alone the will from developers or the money to fund the increased bill for affordable homes - will come from. But it's definitely a start.

Posted by Jules Birch, May 8

Posted in Environment, Planning

THE IDEA that the solution to delays in the planning system is to launch yet another review will strike many people as counter-intuitive. Yet it is an indication of the problems that remain that, despite the Barker and Eddington reviews, the householder development consents review and the Planning Bill that came out of them, another review is precisely what the government launched yesterday.

When one application for a housing development had to be delivered by forklift truck because 24 copies of every page were needed, it's hard not to see the point of a review concentrating on improving the process. This one will be conducted by Joanna Killian, chief executive of Essex County Council, and David Pretty, former group chief executive of Barratt.

That should help ensure that what housebuilders see as the source of the main obstacles to delivering new homes is tackled. The review was welcomed by the Stewart Baseley, executive chairman of the Home Builders Federation: 'Despite all the efforts made to date, the current planning system still takes far too long to identify appropriate sites for development and is riddled with unnecessary delays. The result is that applications take an average of 15 months from initial application to the end of the process – three or four times as long as a generation ago – and insufficient land to meet society’s housing needs is coming forward.'

However, planners responded with a plea not to throw out quality at the expense of speed. 'It will be a regressive step if, at the end of this review, we simply end up with another set of time-based performance indicators and no thought given to how to assess the value of the final decision,' said Rynd Smith, policy director of the Royal Town Planning Institute.

The planning system has to arbirtrate between the often competing needs for different scales of economic and community development, environmental conservation, and local democracy. That difficult juggling act is not going to go away. At the same time as communities secretary Hazel Blears announced the review she was also announcing a doubling in funding going to Planning Aid, the service that gives people advice to help them comment on [translation: object to] proposals and make representations [speak against] at inquiries.

Posted by Jules Birch, March 26

Posted in Planning