Some reduce the UK’s appalling housing crisis to a three-word joke: “Demand? Meet supply.” Keir Starmer certainly sounds like he’s taken its logic to heart. With a bluntness that he avoids in discussing tax or anything else, he backs “the builders” over “the blockers”, and hails construction as the way to get a stagnant economy moving. Historically, housebuilding did pull the UK out of the Depression, generating roughly a fifth of all growth and a third of new jobs in the early 1930s.
With planning approvals at their lowest on record, the PM vows to “bulldoze through the planning laws” to unleash a new building boom of 1.5m homes in five years. His most trumpeted proposals are, first, designating unlovely parts of the protected green belt as “grey belt” with a presumption for development, and, second, imposing stiff targets on townhalls and ultimately requiring them to offer up green belt land for new homes if they fall short. Photos of an ugly, disused garage in Tottenham, which can’t be cleared for housing because it sits on protected land, get repeatedly recycled to illustrate his promise of a clear, common sense solution: liberalise and build.
Probe a little deeper, however, and nothing seems clear at all. Councillors grumble that they already review green belt boundaries. Hardened housing lawyers warn that the government’s proposed definition of the grey belt—as land whose development would “not fundamentally undermine” the local green belt—is precisely the sort of, well, legal grey area that leads to more planning inquiries. The Institute for Fiscal Studies reports that England’s housing stock has grown slightly faster than its adult population over the past generation, suggesting much of the problem may be about location rather than quantity. The economist Tim Leunig—who admits he finds it “hard to look at a green field without thinking about how many families it could support if it were built into housing”—fears the government is targeting most homebuilding in the wrong places while reducing ambitions in costly London, ignoring prices and what they reveal about where people want to live. A brief boom in the value of stocks of the UK’s builders around Labour’s election soon petered out. This autumn, Barratt, the biggest of these companies by volume, reported a sharp reduction in the number of homes it had built over the past year, and signalled further reductions for the next.
Of course, Labour’s reforms are still being consulted on, and will take time to bite. But history casts doubt on deregulation as a panacea. After all, that great building boom of the 1930s took place before there were any serious planning restrictions to remove: the trigger was tumbling mortgage rates after sterling fell off the gold standard. The next sustained peak of total housebuilding came in the mid-1960s, nearly 20 years after the 1947 Town and Country Planning Act introduced the general requirement for planning permission, and a decade after the Ministry of Housing instructed councils to draw green belts around the big cities.
Despite Thatcherite thinktanks contriving to blame everything on planners, even private housebuilding didn’t hit its postwar high until 1964. Total building grew for a little longer, thanks to the vast contribution of councils, which would sometimes deliver half the new homes. Neither the total number of homes nor, more particularly, the supply of affordable ones ever recovered from the collapse of that public contribution after the mid-1970s.
Very few observers—whether from an industry, local government or housing rights point of view—believe a “liberalise and let rip” approach can work. Some are unwilling to talk on the record until the direction of the government is clearer; still, they quietly cast doubt on it delivering 1.5m homes. When it comes to where exactly the obstacles lie, though, everybody points to different places.
Councillors in the north of England, where in many places the Starmer administration is proposing to double the previous government’s (latterly merely “advisory”) housebuilding targets, protest that their problem has not been any reluctance to give planning permission, but rather developers speculatively sitting on land where planning is already secured. The extent of such “land-banking” is contested, but the Competition and Markets Authority (CMA) recently reported that “private developers produce houses at a rate at which they can be sold without needing to reduce their prices”; the CMA is also probing companies for sharing information in an anti-competitive manner. (None of which, you suspect, will be helped by the recent merger between Barratt and Redrow, another housebuilding company, which the CMA allowed to go through in return for “undertakings” about the sale and management of properties in one area.) After a tax-raising budget the government’s relations with other business sectors are strained, so hugging the building giants close will be tempting. But encouraging smaller players—who don’t need to worry about their own influence on prices—might get more homes built.
Another huge problem, the overwhelming one in London and the south, is the price of land. For Anna Minton, an author specialising in the built environment, the “relax planning stuff is just pointless rhetoric” until land prices are tackled. There is certainly an interaction with planning, which turns the bureaucratic pen into a magic wand; the price of previously agricultural land routinely rises 10-fold and sometimes much more when permission for building is granted. The big question is who gets that huge gain: the lucky original landowner (at the expense of the eventual homebuyer) or the public authority that makes the decision.
Admittedly, this dilemma would take care of itself if all restrictions were simply abolished, but that would be political suicide. In semi-rural, marginal constituencies like the one I live in, the activists who go door-knocking all tell you that the biggest issue are local housing developments that spoil views, clog narrow roads or strain local services that aren’t expanded in tandem. In opposition, Starmer sometimes suggested he would simply crush dissent by Nimby MPs. But when he moves towards mid-term after mislaying Labour’s poll lead, he may find his troops less interested in Number 10 diktats than saving their own seats. Besides, Minton says that even the developers don’t want a free-for-all, because barring “investor-bait in the cities”, their best margins are on “executive homes in the green belt”, which command a premium because of their relative scarcity. So “a bit” of deregulation, she says, suits them better than “a lot”.
Then there is the small matter of the countryside itself. Author, anthropologist and TV presenter Mary-Ann Ochota, who is president of CPRE, tells me that although individual patches of green belt land aren’t and shouldn’t always be sacrosanct, our nation should be grateful that it pioneered the designation to install “forward thinking” protections against “unrestricted sprawl”. Many other countries were inspired to create something similar, she says; others didn’t and ended up with car-clogged, county-sized conurbations such as Los Angeles. The overriding point for Ochota is to show strategic respect for all the things planning must balance: “Genuinely affordable housing, resilient local infrastructure, climate resilience, access to countryside, and space for nature.” She says it is about “thinking comprehensively about what the green belt can enable, not just what it blocks”.
A conservationist is bound to make such a plea, but I was surprised to hear a similar sentiment from an analyst with long construction industry experience. The analyst doubts that the prime minister “really knows what he means” when he says he wants to “reform planning”. The problems the government must solve are only proliferating: “climate and biodiversity are becoming more salient”, and a “lack of investment in water means stress there is more pronounced”. Hasty deregulation of planning could invite litigation under other laws.
The same complexities help solve the riddle about homes not being built after planning permissions have been granted. Councils are much better at giving “conditional” green lights, enough to earn credit in Whitehall, than clearing the conditions that make permissions “implementable”. They’re always short of staff, and are often not best placed to check on each situation’s demands, which might fall under the remit of the Environment Agency, water companies or National Highways instead. The old regional development agencies used to knock heads together, but since they fell victim to austerity in 2011, there’s been no one to do that.
Even putting to one side the delicate balance that has to be struck with conservation, I’m left feeling that a “hands on” housing policy is essential simply for building the homes that families need. Some small tweaks might make a difference, such as giving councils credit only for fully cleared effective permissions that immediately allow building to start. But ending the crisis may also require controversial “sticks”, such as higher taxes on under-occupied properties. The state will also have to be much more muscular in containing land costs. It should then stand ready to acquire cheaper land for dual purpose: building social housing on some plots, while selling others on for private development—and why not for public profit? It must make clear to developers what exactly it expects to see built, thereby de-risking projects for investors and justifying a squeeze on margins. Competition policy must be tough, and new rules—such as time limits or charges on unused permissions—might be needed to discourage land-banking.
With enough ambition and sufficient willingness to take on those landowners and developers who’ve prospered out of the status quo, new town corporations (see Deyan Sudjic, p42) could be one important vehicle for grappling with all this. Looking at the substance of the government’s early moves on housing rather than its deregulatory spin, there are some heartening signs of a multi-pronged approach. Angela Rayner wants to be judged on boosting council housing, and is cutting the “right to buy” subsidies which have so reduced the stock. The housing minister, Matthew Pennycook, has implemented new powers to curb the compensation paid to owners when land is acquired for housing, and suggested these are merely “first steps”. Labour has also acknowledged the need to recruit additional council planning officers, and is looking to metro-mayoralties to restore some coordination in the system. More planning, in other words, rather than less.
It’s too early to be sure which route Labour will take. Piecemeal incursions into the green belt are still the path of least resistance. That might work for landowners and big builders, but not anyone else. Let’s ditch the grudge match of development control and pro-actively shape the communities of tomorrow.
