PROCUREMENT
The planning system
The lack of available land with planning permission is a significant barrier to housing delivery. Given the acute housing shortage there is now an urgent need to review the planning system and consider whether planning policies that were designed many decades ago, such as green belt policies, are still delivering the desired outcomes.
Such a review should also consider whether more recent planning policies interact with those that are longer established. There is a growing concern that the current process is not fit for the purpose of supplying enough land, brownfield or otherwise, to deliver three million new homes over the coming years.
What is needed is a freeing up of more resources in the planning system to deal with more significant planning applications and improving the pre-application process.
Innovation and funding
Fresh thinking is needed to enable the house building industry to deliver the homes that are needed in the future.
Key to this is the need for the government to be looking at changing its stance on taxation to create a market that could attract much needed investment into the whole of the housing sector. At present, a large proportion of new housing construction is carried out by a small number of providers that are heavily dependent on one business model.
Increasing the range of housing producers should increase overall supply and help to reduce volatility in its delivery.
Taxation
Finally, there is the bigger, more uncomfortable truth that the UK cannot currently afford all the homes that it needs which raises the issue of whether or not local and national taxes should be increased to meet this need.
To achieve this goal, a number of smaller scale delivery models could be actively encouraged. These could include delivery by smaller housing associations, co-operatives, community land trusts and other mutual providers.
Government, registered social landlords, local authorities as well as house builders, should be looking at ways to develop public-private partnerships that share both the risks and benefits of housing delivery.
Although it has been reported that local authorities may start building again the reality may be some time coming not least because they do not have the skills capacity that would enable them to run direct labour organisations and it would take them a significant time to develop them even if they had the desire.
If local authorities are to develop the mixed communities that are required they will need to work with the private sector, RSLs and, of course, they would face the same issues as them in terms of a lack of mortgage availability and the impact of regulation on site viability.
However, local authorities still Jul/Aug 10
have a huge role to play and by working in partnership could make great progress as central and local government have land. RSLs have management expertise and builders can provide the skills to build the new communities that we need.
There is also a need to boost productive capacity by encouraging more house builders into the market. There is a need to provide some level of certainty to people assessing the potential benefits and risks of establishing a new business and also removing the barriers that current regulatory costs and complexities present to market entry.
There is a huge amount of uncertainty in terms of how the wider economic climate is impacting on house building, on the future regulatory environment, on whether the technology being developed to achieve zero carbon housing is going to be viable and on targets. All of these factors lead to uncertainty, cost or risk and need to be addressed if our house building market is to be an attractive option for new players.
The arguments relating to changes in taxation need to be examined in detail as do the merits of different forms of property or land taxation. Given that having a home is basic human need at some point the issue will need to be discussed and addressed. The reality is money is desperately tight as budget cuts have to be made and different needs compete for dwindling resources which in turn will probably drive taxation up.
Conclusion
The housing crisis presents a unique opportunity to help build the UK out of the recession and deliver the homes that are needed today and for future generations as the population grows and the way we live and work changes in the developing low carbon economy.
House builders are more than capable of delivering the homes to meet the nation’s needs if people can get the mortgages; if sufficient public funding is devoted to social housing; if businesses can get loans to start up and grow; and if the planning system is streamlined and made more receptive to current and future housing needs.
What is needed now is strong political action from the government to tackle the housing crisis which will not only deliver political rewards but leave a lasting legacy to the people of this country.
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