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CM Comment: who's going to solve the house building crisis?

11 October 2012

The political parties all talk the talk, but does anyone have the policies to tackle housing shortages, asks Denise Chevin

House building, house building, house building. All the party conferences this autumn have made it abundantly clear. We need to build more homes. And each is the party to turn around the current dismal stats which show that the country can barely knock up 100,000 a year. That’s good news for great swathes of the public needing their own homes, and the construction sector, which desperately needs the work of constructing them. Revving up this particular engine will of course stimulate the economy and produce better headlines.

But if only it were that simple. A whole slew of factors are conspiring against house building – the planning system, the lack of mortgages, the near removal of housing association grant, the list is endless. The political parties may espouse the right sentiments, but the ideas are sadly lacking to double the numbers any time soon. It’s great that help for first time buyers is being extended, that self build is being encouraged; that section 106 is having a holiday; that upping the private rented sector has been put on the agenda.  Such a multi-pronged attack can’t be scoffed at.

Changed business model

The biggest problem is the house builders themselves, for which the government has little or no leverage. After the disasters sparked by the 2008 crash they have certainly bounced back to better fortunes, but have changed their business model which is now based on bigger margins on lower turnover. When they have large development sites, homes are turned out at no more than a few hundred a year so as not to flood the market in the area, reduce risks, and raise the cash to finance the next part of the development. Like selling cars, or running banks, it’s all about keeping their shareholders happy – not about cranking up the volume because council waiting lists are heading north.

Look back on the history of house building in the UK and we’ve really only had mass building on the back of government intervention like the construction of new towns and mass council house building of the 1950s.

If we want homes that people can afford in large numbers and quickly, then we can’t rely on the market – look at the Eco towns, Labour’s attempts to ramp up house building before the 2010 election which relied too heavily on the private sector. The party’s new incarnation – Ed Balls’ plan to turn the sales proceeds of 4G networks over to bricks and mortar – may seem a little hackneyed and mightily convenient for a party conference.

But let’s not look a gift horse in the mouth. Parties will have to find the cash somewhere and encourage new house building vehicles into the market. This could come in the form of land of course, which could be handed over to councils, new community land trusts, housing associations or even new forms of social enterprises – organisations which are not ruled by shareholders or profits, and accompanied by the new urban development corporations that could ease the problems of planning. And while we’re at it, raising the cap on councils’ spending under the new Housing Revenue Account Reforms has to be given serious consideration.

Upping number of homes built shouldn’t be beyond Britain. And it’s not.  We managed it in Stratford didn’t we?  

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