With a focus on increasing housing supply, the long awaited UK Housing White paper entitled ‘Fixing our broken housing market’ has been launched. It laid out several new initiatives designed to increase house building, including the following recommendations;
|Developers to be forced to use or lose planning permission within two years once granted|
|Older people will be given incentives to move out of large, under-used homes|
|Tenants will be given more protections and there is an emphasis on promoting and funding rental schemes and affordable housing|
|Brown field sites to be brought back to use and the green belt will be maintained|
|Local authority capacity and capability to deliver, including planning fees to be boosted|
|Small and medium sized sites and developers to be given more support|
The Housing White Paper and the Housing Crisis
According to the paper, since the 1970’s there have been 160,000 new homes each year delivered in England. However, the consensus is that between 225,000 and 275,000 or more homes per year are required in order to keep up with population growth and start to tackle years of under supply.
Subsequent research undertaken by Heriot-Watt University, has, however, suggested the backlog of required housing is closer to 4,000,000 homes. Indicating the England would need to deliver more that 340,000 homes every year until 2031.
The report determines that the lack of housing is not due to a lack of available land, only 11% of land in England has been built on. The problems are:
- Not enough Local Authorities planning for the homes they need
- House building that is simply too slow
- A construction industry too reliant on a small number of developers
London Housing Shortage
Whilst the devolution of much housing and planning policy has helped to put London ahead of the game, the housing crisis in London remains more complex, more critical and requires greater measures than the rest of the UK. High demand and low supply have caused house prices to rise significantly in recent years, and as the population grows to an anticipated 9 million by 2020 and 10 million by 2030, the capital needs to deliver 50,000 homes a year in order to house its residents.
Simply speeding up house building is not the answer to the problem. Despite being one of the least dense capital cities in Europe, there is a finite amount of land and London is surrounded by green belt. The recommendations in the White Paper that this is maintained restricts the ability of the city to build out, and developers will have to make more efficient use of what land there is available.
It is however unrealistic to assume that brown field land will provide sufficient sites to meet London’s housing need. In addition, brown field land can often be contaminated and expensive to clean, getting planning permission to build can be a lengthy and costly process and putting in new roads and transport links can prove tricky. This adds to the financial pressure that many developers are already under as they are increasingly taxed and have to pay for social housing, and community infrastructure, meaning many of these sites may be too risky and unprofitable.
One solution would be a greater emphasis on building up rather than out and easing planning permissions, especially in the most popular areas for housing, in order that this is possible. While there can also be issues with tall buildings from a financial point of view, smaller buildings and individual dwellings adding upper floors, something which can be far less disruptive than adding basement, would be helpful in creating more homes.
Another is encouraging more people to rent and the White Paper certainly provides solid recommendations in order to make this possible. Of particular note are policies supporting the build-to-rent industry; measures in the white paper include promoting the building of apartment blocks managed by professional companies and backed by institutional lenders. Having been hit by a 3% increase in stamp duty last year, many investors are only now starting to cautiously enter the market so this must make financial sense for them to move forward. The hope would be that more modern methods of construction such as modular housing would make this possible.