PLANNING
HowGreen was my valley
Green planning – a misleading interpretation of reality says Adam Challis, Head of Research at Hamptons.
T
he Q2 2011 report by the Home Builders Federation has reignited one of the most politicised debates on land use in England. Using
Glenigans data, the report highlights the severe slowdown in residential planning approvals, totalling just 58,621 private and affordable units in the first half of 2011. In comparison, the stronger markets of 2006 and 2007 each had permissions of over 200,000 units. Perhaps unsurprisingly, this report has
been used by the pro-development lobby to decry the state of the planning system, while the groups that seek to limit the development of not-previously developed land are concerned that proposals to streamline the planning system will provide an opportunity for unchecked development of the countryside. In reality, both sides are providing a misleading interpretation of reality, muddying the waters in this important debate.
Just the facts
Detailed Government research released in the 2004 Barker Report calculates that the annual need for new housing in the UK is approximately 240,000 homes. This compares with the 134,000 homes built in the UK in 2010 and a slightly lower level expected in 2011. In fact, in the eight years since the Barker Report was released, the housebuilding industry has never even
44 DECEMBER 2011 PROPERTYdrum
come close to this targeted level. There has been limited debate about
whether 240,000 homes are required each year. Notwithstanding this debate, suffice it to say that the current level of housebuilding, at approximately half of this level, is insufficient to meet the rate of household formation in the UK. This
Whether the actual need is
180,000, 200,000, or 240,000. The clear point is that it’s not being met.’
difference creates a deficit between demand for housing and supply, with every year that passes contributing further to the shortfall. Whether the actual need is 180,000,
200,000, 240,000 or even higher, the clear point is that need is not being met. Only a basic understanding of economics is required to understand that this subsequently creates price pressure. Housing affordability (compounded by a lack of available mortgage financing) is well off long-term trends and is one of the most vexing issues in UK society today. This problem is not limited to prospective purchasers, as ownership affordability problems are turning a generation of would be purchasers into frustrated renters and subsequently driving up rental price pressure as well. Even affordable housing is not left
unaffected by these problems, as much of affordable supply is piggybacked onto private development. No market housing development means limited affordable housing supply as well. It is currently estimated that there are 1.75 million households on social housing waiting lists – yet only 30,000 new affordable homes were built last year. So the debate about need is laid bare.
There is no debate; the question is how new housing should be provided and in the context of this debate – ‘where?’
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