As older readers will know, I was a minister in John Major’s government and an MP for 15 years and my politics remain those of the centre right.
Which makes it hugely frustrating for me that this current Conservative government’s attitude to property developers is both shameful and utterly hypocritical. Only last week, Sajid Javid was at it again, this time blaming housebuilders as an industry for the failings of one or two who did indeed fail to deliver homes fit for purpose.
Those companies deserve to be called out. Their reputations will have been badly damaged and rightly so. But the idea that the whole industry is about ripping off innocent punters for profit is as inaccurate as it is offensive.
Then there is Sir Oliver Letwin’s “independent review to tackle barriers to building”. The clear message surrounding the announcement of this exercise was that developers are hoarding land, watching it increase in value and ultimately selling it at a massive profit at prices only the rich can afford.
It was also clearly spelled out that once they had started to build, developers were taking too long to bring homes to market, thus driving up prices even further. Both these assumptions are in fact absurd, as a clever chap like Sir Oliver surely knows.
The reality is straightforward. Land is so expensive that once developers have secured a purchase they will work as fast as they can to get a planning consent and start turning their considerable outlay into cash. If there is too long a time between buying the land and actually earning a return, that is more a reflection of a sclerotic planning regime, which this government, despite all its fine words, has done very little to improve.
One of the great canards the government is party to is issuing figures showing how many homes have been given consent but have not yet been built. The blame for this is then laid fairly and squarely at the door of developers.
But how many of these consented homes have completed the endless post-consent process of agreeing conditions such as section 106 agreements and CIL imposed by local authorities?
The fact that in many cases that process can take as long if not longer than the application itself is a shameful reflection on the inadequacy of the system.
While I’m at it, can I just point out to Sir Oliver that if I finally get a consent for 1,000 homes it would be economic suicide for me to build them all and put all of them on the market at the same time.
Not only would such a strategy be ruinously difficult to fund – the cashflow would be horrendous – but it would guarantee the price I would get for my homes would be way below what a more orderly sale process would achieve. Criticising an industry for not indulging in economic madness is absurd.
“Criticising an industry for not indulging in economic madness is absurd”
What makes me so angry is that these ministers are not stupid people. Javid made his money in the City. Mrs May worked for the Bank of England and Barclays. They must both know this cynical exercise is all about an attempt to put the blame for our current housing crisis on the housebuilding industry so as to deliberately deflect criticism of government inaction.
If the government is really intent on solving the crisis it already knows what to do: reform the planning system, which will inevitably mean providing greater certainty to applicants and less power to local councillors. But it is abundantly clear that they simply don’t have the bottle to do it.