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More social homes are the only way for Johnson to fix the broken housing market

Boris Johnson has a long to-do list. But the scale of the housing crisis means building more homes must remain a priority. More social housing is the only way, argues Polly Neate

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More social homes are the only way for Boris to fix the broken housing market, says @pollyn1 of @Shelter #ukhousing

“There are simply not 300,000 households a year ready, able and willing to buy homes at current unaffordable prices,” says @pollyn1 of @Shelter #ukhousing

“Our broken land market forces us to make too many compromises,” says @pollyn1 of @Shelter #ukhousing

The new prime minister must turn his attention to the national emergency our housing crisis has become. And when he does, there is no getting around the fact that social housing is the only solution.

The scale of the crisis demands serious ambition to build enough social homes for all those who need them.

But it’s not just a numbers game. As Shelter’s Grounds for Change  essay collection argues, the government must learn from history and take action to reform our broken land laws. Only then will we build the high-quality, well-designed, genuinely affordable homes this country deserves.

Almost everyone now accepts that the housing market is broken and tackling this is a key challenge for Mr Johnson.


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If the government is looking for a historically proven way to provide homes to all who need them without house prices crashing, by far the most efficient, effective and well-understood vehicle is a major programme of social housebuilding.

Earlier this year, Shelter’s commission on the future of social housing gathered a raft of evidence on the benefits for those currently living in social housing.

In much of the country, social housing is the only tenure affordable to minimum wage earners and the only tenure that gives households on modest incomes the breathing room to save money each month. And – unlike in private renting – social tenancies are usually secure, so families can’t be turfed out on a landlord’s whim.

Yet, despite the evidence that social housing is a vital component of solving our housing crisis, just 6,500 new social homes were delivered last year.

Historically low levels of grant, a lack of vision for social housing, and a host of other factors got us here. However, at the heart of the challenge of increasing social housing delivery is the same issue that sits at the heart of so many of the challenges we face in housing today: England’s broken land laws.

The total value of residential land in the UK has exploded in recent years, rising by 583% between 1995 and 2017.

Little wonder that forthcoming Shelter-Local Government Association research reveals the high cost of land is the single biggest barrier councils face in getting social housing built. Elsewhere, housing associations also cite access to land as their biggest barrier to building more.

But things weren’t always this way.

Social housing providers in the immediate post-war period benefited from legislation that allowed them to access land at an affordable price.

As a result, they achieved high-quality, well-planned developments that were built out at record speeds and are still well loved by their residents today.

The Land Compensation Act 1961 changed all this. This act – together with a raft of problematic case law arising from it – enshrines a landowner’s right to ‘hope value’ in cases of compulsory purchase.

This means the price of land reflects the likelihood that it might one day have been used for lucrative market housing, creating a floor on the price of land based on the most profitable uses imaginable.

“There are simply not 300,000 households a year ready, able and willing to buy homes at current unaffordable prices”

We know we can’t meet the government’s target of 300,000 new homes a year by building only the most profitable kinds of schemes.

There are simply not 300,000 households a year ready, able and willing to buy homes at current unaffordable prices.

As Sir Oliver Letwin found in his review of build-out rates, if we want to build more and build faster the answer is to diversify what we build.

Different forms of housing, unsurprisingly, have different markets and different levels of demand. As Sir Oliver discovered, the housing emergency is now biting so hard in some areas that the demand for social housing is “virtually unlimited”.

Yet alternative forms of development, including social housing, struggle to break through the financial barrier of the 1961 act.

A council, mayor or community group wanting to build an ambitious new settlement in the style of Letchworth Garden City would find themselves paying for land at a price which would make it impossible to deliver the scheme as planned.

While public money has built many social homes over the years since the modern land market was defined by the Land Compensation Act, providers have been forced to compromise on quality, design and density to cope with escalating land prices.

“Our broken land market forces us to make too many compromises”

As the government’s Building Better, Building Beautiful Commission recognises, quality design matters. But the way our planning system and land market work right now forces down standards. This is as true for social housing as it is for market housebuilding. Our broken land market forces us to make too many compromises.

Fixing this requires clear standards, developed with communities, to create great places people want to live in and next to.

We also need land reform to make sure land comes into development at a price which makes it possible to deliver on this ambition.

For decades our ambitions for social housing have been boxed in by land traders’ rising profit expectations.

What is needed has been less important than what is possible in a broken market.

In a world where the price of land reflects what will be built on it, communities will have far more freedom to define development outcomes for themselves. These social homes will then become the foundations of strong communities.

Polly Neate, chief executive, Shelter

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