This white paper is far from the radical overhaul of housing policy that was promised (10.02.17).
The ‘use it or lose it’ rules designed to prevent developers land banking are too black and white and completely fail to consider other key factors preventing the building out of sites, such as finance.
Banks in most cases will not fund the development of a scheme until 50% pre-sales have been secured. In an active market this isn’t a problem, but in a more challenging market such as the one we currently face, this is a major barrier to development. The idea that developers are just sitting on land waiting for prices to go up is ludicrous. If they can’t sell half the scheme in advance, they simply can’t build it. Where is the proposed legislation tackling this fundamental problem?
While I support a more enlightened approach to the rental market and an end to the blinkered focus on home ownership, I’m concerned that here, too, the government has not looked at the bigger picture. PRS has a huge role to play in providing housing, but the entire market needs to be healthy in order to deliver it at scale.
Big urban regeneration schemes such as Nine Elms and Pan Peninsula would never have happened without funding from the top end of the market, which is currently stifled by stamp duty escalation.
However, I welcome a relaxation of regulation around space standards that will give developers the freedom to meet consumer demand. For too long the overbearing bureaucracy of the planning system has forced developers to build cookie-cutter schemes that fail to meet the needs of the local demographic. If a scheme is proposed in Croydon, where there is strong demand from millennials who want smaller homes with shared facilities, that’s what should be built.