SME housebuilders are key to growth – and the Conservative revival
Housing was a major cause of the Conservative collapse – particularly with young people. If we want to build the right houses in the right places, SMEs are the answer, says Jack Rankin
Like the Chancellor, I’m no economist. She might have a degree in PPE, but you don’t need that to work out that for years demand for housing has been too high and supply too low. Now those in think-tank land have confirmed it: mass migration has pushed up rents £132 per month in England and we’re some 6.5 million homes short of where we need to be.
People will write PhDs in the future about my party’s collapse at last year’s general election, but for those under 50, housing – or rather the lack of it – was a massive factor. It’s no surprise then that in last year’s election my party polled terribly with anyone under 50. I said at the time that it felt like every young-ish Conservative voter had been at my wedding. I’m glad to have been proven wrong on this: if anything, this has given new purpose to young professional groups like NextGen Tories, Conservative YIMBY or Looking for Growth who are using social media to be the voice of a new generation. Make it easier for young people to own a stake in society and you might just win over a new set of Conservative voters. After all, why be a capitalist if you don’t believe that by your industry and hard work, you could own capital? There can be a tendency in my party to dismiss Gail’s-loving young professionals as a Lib Dem problem, but young people want the same things every generation wants: a strong pound in their pocket, the chance to raise a family and a place to call their own.
Urban sprawl
But this doesn’t have to mean urban sprawl with developers dragging and dropping indentikit homes on the countryside. We are all familiar with the usual objections to pretty much every large-scale development – I’ve raised some of them myself – and these aren’t going away any time soon, despite Labour’s attempts to steamroller local voices in their Planning and Infrastructure Bill. Clearly, squaring that circle isn’t simple, but part of the solution may well lie with SME housebuilders.
When we were building enough homes it was SMEs who accounted for the majority of completions, creating competition in the market both on price and quality. Smaller developers tend to have a much deeper understanding of place – where to build, local styles and materials and how best to work with, rather than against, the glorious English countryside. SMEs will have a bigger stake in the future of these communities – it follows that this kind of development will be easier to sell to local people. Not to mention that without the financial reserves of big developers, SMEs have more incentive to build out quickly.
We also need to stop pretending that London and our other major cities can’t be built up anymore. We’ve seen record low housebuilding in our capital under Labour even though many parts of London are less dense than, Barcelona, or even Leeds: it’s half the density of Paris! As Kemi Badenoch says, young people are paying the price. It’s killing aspiration: you might turn down that great job offer in the city if the pay rise is outweighed by increased rent. We have vast brownfield sites, redundant retail zones, and absurdly low-rise areas just minutes from major stations – there are even prisons in zone 2! If we allowed more upward development, particularly around transport hubs, we could meet housing demand without laying a finger on the green belt.
We have vast brownfield sites, redundant retail zones, and absurdly low-rise areas just minutes from major London stations – there are even prisons in zone 2!
This is where SMEs come in: repurposing a vacant shop in a city centre or building upwards through permitted development rights isn’t worth a bigger developer’s time when they are sitting on masses of green belt; SME housebuilders have a competitive advantage and yet the planning system often seems to work against them. The recent report published by the SME housebuilders APPG reflects this with an overwhelming 96 per cent of SME housebuilders surveyed running into major planning barriers even when sites are available.
Labour have made some positive noises, such as easier access to finance, that have been welcomed by the industry, but there are claims that half of the remaining 2,500 SME housebuilders may well go bust by the next election. This would just be the latest in a series of blows to their ‘1.5 million’ target. Meanwhile, landlords are selling up ahead of the implementation of the Renters Rights Bill and we know by now that Labour aren’t serious about tackling migration, or anything else really. We know the Prime Minister doesn’t get it- according to him there is plenty of housing for asylum seekers.
Politicians need to stop talking about ‘the right homes in the right places’ without a roadmap for how to achieve this. SME housebuilders that can listen to local needs and take on challenging brownfield sites may well hold the answer, and we need policy that reflects this.
Empowering small businesses and encouraging home ownership? There might be something conservative about that.