Beware of Mike the Merciless

May has been even busier for the housing secretary. A Financial Conduct Authority inquiry he ordered into profiteering in the building insurance sector is taking evidence: those pocketing hidden commissions beware.

Wider financial misconduct has been red-flagged. “We want to shut down this racket of illicit money that has flooded though the property market”: those turning blind eyes, beware.

A sword of Damocles has been hung over RICS, after it refused to ease rules to allow members to inspect Grenfell-blighted blocks. New powers to conduct a government inquiry into the body are to be introduced. Take that!

Housebuilders have been zapped again by Gove’s ray gun: “Too many new homes are identikit creations plonked down without regard to the shape and character of existing communities.” Get with the ‘BIDEN’ principles, he demands: beauty, infrastructure, democratic control, environmental enhancement and neighbourhood protection. If not, ‘I will take you on’, menaces Mike the Merciless.

Peter the Merciless orders Mike to give councils the right to demand 25% higher space standards and 20% lower density levels. A view admittedly not shared by those who throw stones from detached homes. Poorer folk must help save the planet and increase land values by living cheek by jowl in tiny boxes. That’s the line.

Much of the above will be given force in the 338-page portmanteau Levelling Up Bill published last week – except, that is, for Gove’s wishes on insurance and money laundering. A significant omission is a promise Gove would surely have wanted to make. Namely, a timetable for the second tranche of leasehold reform that would allow existing leaseholders to more easily enfranchise.

Act Two was “promised during this session of Parliament”. Now the government simply “remains committed”. The minister responsible, Stephen Greenhalgh, said in the Lords last week that the reforms will happen “in this Parliament”. But fearful rumours abound that Number 10 is intent on spiking Act Two. Best not. There will be a frightful furore.

Gove’s Gladstone Bag Bill contains not just plans to introduce the BIDEN principles, but others “about local democracy; about the Community Infrastructure Levy (CIL); about the imposition of Infrastructure Levy; about the compulsory purchase of land” as well as the “governance of RICS” discussed above.

Reform dropped

Forget ‘local democracy.’ This refers to folk being given ‘street votes.’ A few examples of developers getting together with owners and voting to add a set of extra floors without the need for formal planning approval may happen. Peripheral stuff.

Samuel Hughes and Ben Southwood of think tank Policy Exchange somehow managed to convince Gove that the policy will result in “110,000 homes each year for the next 15 years above current estimates [being] built”. A preposterous idea, given it will ignite neighbourhood wars. But give Gove credit for dropping ‘planning reform’. The idea that changing the planning system will result in more homes is even more preposterous.

There is a promise to simplify and strengthen the law on compulsory purchase. But a pledge that forbids the buyer forcing the seller to accept ‘existing use value’ pretty much kills off the moribund ‘Garden Cities’ programme. Pity. Pray for exceptions.

The one change worth close attention is the replacement of the CIL with the Infrastructure Levy. Official explanation: “The levy will be charged on the value of property when it is sold and applied above a minimum threshold. Levy rates will be set and collected locally, and local authorities will be able to set different rates.

“The rates will be set as a percentage of gross development value (GDV). This will allow developers to price in the value of contributions into the value of the land, and removes the need for obligations to be renegotiated if the GDV is lower than expected; while allowing local authorities to share in the uplift if GDVs are higher than anticipated.”

A genius idea. Tax the transaction, not an opinion.

Peter Bill is a journalist and the author of Planet Property and Broken Homes