Six steps to housing heaven: How Theresa May can kick-start a house-building revolution
The new Prime Minister has been in place for two weeks now, and is getting to work to achieve her positive agenda of uniting the country and promoting all parts of it, so no one is left behind.
To deliver this, there has been substantial focus on housing delivery. The social case for housing is indisputable and us housing types know the bad impact that poor or inadequate housing can have on health, educational attainment and life chances.
Building more homes is not a new challenge, and it’s one that has plagued at least the last three Prime Ministers and two mayors of London. There is a growing consensus across business and the population that we can’t go on perpetually failing to deliver the homes the country needs and the new Prime Minister will find significant goodwill towards change.
We need a revolution, but not radical and untried policies. We need a quiet revolution that builds on what we know, capturing existing innovation and progress.
My own six steps to housing heaven would be:
Step 1 – National housing policy should be adaptable to local circumstance. London isn’t Leeds, which isn’t Ludlow. Housing markets and land prices vary significantly across the country and you can’t have a one-size-fits-all policy.
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Step 2 – Broaden the supply base. The country will only get close to building the homes we need if all sectors are firing on all cylinders – homes for sale, social rent and private rent. If a tenure is delivering additional homes, it must be supported. The build-to-rent sector has grown from zero to 60,000 units in its development pipeline in two years, for example, with half in the capital. Promoting home ownership is important, but not enough.
Step 3 – Build differently. The UK will not build 200,000 homes a year through traditional methods, where it produces 150,000 and runs up against labour and material shortages. Legal and General owns the biggest modular construction factory in the world, and it is in the UK. Such factories rely on volume and government should be using its own procurement of homes to support modular construction, to augment private demand and ensure volume is maintained through peaks and troughs of demand.
Step 4 – Land. This is the most vital ingredient if we are to build enough homes. The new Prime Minister should get “heavy” on land. Land release by government departments is abysmal, as a recent National Audit Office report shows. This is not departmental land, but government land. Somebody in high authority in government should have the ability to do land deals on behalf of any central government department.
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Step 5 – Continue with supply-side reform. The government’s various planning reforms are making a difference, but it will take time. Demand-side policies, such as Help to Buy, are helpful and should be used to support tenure preferences, rather than pushing these through supply-side policies, which hampers overall supply.
Step 6 – After umpteen fiscal reforms, the sector is seeking stability on fiscal policy. Where tweaks are needed, support supply, and certainly don’t allow fiscal policy to become a barrier to it, such as recent stamp duty surcharges on investing institutions.
There has never been a greater need, but also a greater opportunity to reverse decades of under-supply of housing. We seem to have a new Prime Minister that wants to take the issue by the scruff of the neck. God’s speed!