Sajid Javid has described the housing market as “broken”. Broken from decades of a planning system destroying the supply-side of the supply/demand balance, pushing up prices so that many first time buyers are middle-aged.
Tinkering with the system through mechanisms such as affordable housing effectively became a tax on house building, further reducing supply.
In its housing white paper, the government failed to propose radical reforms, instead listing relatively minor changes within the existing system that will not resolve the problems - it has the chance to redress this in today’s final Spring Budget.
Some of the proposals below are interesting. None are exciting, or game-changers. They could have done so much better in the white paper so let’s hope the Budget seeks to redress some of the missed opportunities for getting more houses built:
- Green belt: this will continue to burnish the property prices of those lucky enough to live by it and condemn thousands of people to unnecessarily long commutes. Even the suggestion that some brownfield sites in the greenbelt might be used for starter homes is limited since they must not affect the openness of the green belt.
- Shortening the life of some planning permissions from three years to two years: Very few planning permissions actually lapse, so this won’t increase the delivery of new homes – but it will provide opportunities for objectors to seek to “time out” planning permissions by resorting to the courts.Making it easier to issue Completion Notices where development is not built out quickly. But the sanction if you don’t complete a development once the notice has been served is that the planning permission lapses in respect of the unbuilt part of the site. How will this increase the delivery of housing? A new permission would need to be obtained, causing more delays.
- Reform of compulsory purchase powers: Any improvement will be marginal. There is no shortage of adequate CPO powers open to local councils. What can be lacking is either the funding or the willingness to use them. New national method for assessing the housing need in an area. A common formula should save time at planning inquiries, and make it harder for local planning authorities to underestimate the number of houses they need to plan for. The devil will be in the detail. To date, we don’t have the detail.
- Amend the NPPF to require neighbouring authorities to prepare a “statement of common ground” on how they will deal with cross boundary issues, such as the provision of housing: The statements are to be “non-binding”, which is fortunate since many authorities would agree only that most housing should be on the other side of the borough boundary.
- A ‘housing delivery test’ that will identify local councils that are failing to deliver the housing needed in their area: An escalating scale of sanctions is proposed. Delivery below 95% or 85% of target by November 2017 would lead respectively to a requirement to prepare a report on how housing delivery will be improved, or a requirement to plan for a 20% buffer above the original requirement. Tougher sanctions follow to 2020.
- Changes to CIL: The CIL review body has recommended fundamental reform of the Community Infrastructure Levy, welcome news on surely the least well thought out tax this century. But worryingly there are hints that reforms might be more modest. Please Mr Javid: abolish it – it’s done enough damage already.