For sanity’s sake, change the tune. Sixteen housing ministers since 1979 have accepted a factoid suggesting they are responsible for the number of new homes built.
Not one has had the courage or wit to say: “Hang on a minute – 80% of all houses are built by the private sector. They dance to the tune of the market, not proclamations issued at Party Conference. Why should we take on the blame?”
Norman Mailer defined a factoid as an “item of unreliable information, reported and repeated so often that it becomes accepted as fact”. More factoids spin round Planet Housing than moons circle Jupiter. ‘More homes will lower prices’ is one. The effect of adding 300,000 more a year instead of 230,000 to a stock of 27 million is marginal, especially as new homes cost 20% more than old.
Factoid de jour ‘pre-fabrication will bring abundant cheaper homes’ has been sparked by the worryingly enthusiastic Nigel Wilson, chief executive of L&G.
“We need to build houses faster and more efficiently.” Fine. But savings accrue to the producer, who may be tempted to blow them on paying more for land. Prefabrication won’t speed up sales, nor will the units be sold more cheaply.
The most egregious factoid has it that ‘fixing the planning system’ will clear the brush on the path to housing Nirvana. George Orwell said there are some ideas so wrong that only a very intelligent person could believe them. The planning system is like the tax system: it can always be improved. But is the ‘system’ restraining big builders? No, it is more a useful barrier to competition from smaller fry.
The top seven housebuilders upped completions by 55% to 70,000 between 2013 and 2017. (Smaller fry 15%.) Sale prices rose 47%.
Margins of 20% to 30% are being achieved. Does more planning undergrowth need clearing? No. The seven held 348,000 plots last year, 9,000 more than in 2016. These numbers have not been gathered to complain, rather to celebrate a system working just fine – for 80% of the market.
From factoids to facts
New housing minister Kit Malthouse is due to speak at RESI 2018 on 13 September. Please, minister, don’t chide volume builders to ‘step up’ as Theresa May did in March. Retune the dialogue after 21 years.
Encourage everyone to help meet that target of 300 000 new homes a year promised by ‘the mid-20s’ by Dominic Raab during his Mayfly tenure.
Or drop the target like a hot brick.
For there is a shortfall of 70,000 to reach this talismanic target. Even if the traditional private sector suppliers continue to increase production at 7% per year, as they have since 2013.
Even if housing associations up output by 10% a year. Even then, the numbers produced with the aid of fellow PW columnist and housing analyst Alastair Stewart rely on a ‘steady state’ economy. Minister, take courage. Zap the factoids, especially those circling planning. Set sector targets, but only after talking to each sector. Publish your own set of extrapolations. Admit the numbers may not be met. Think much harder about those who might contribute to filling the gap of 70,000. If it can’t be filled, be brave and say so.
For 21 years the noise from self-interested factoid promoters has drowned debate on plenty of sensible ideas. Here are just two among many floating around: encourage build-to-rent and retirement homes with a special use class. But with the quid pro quo that affordable units are provided. Let councils buy land at existing use value. Use the bounty to build far more affordable homes.
Minister, publish your own concrete ideas. Attach them to your extrapolations, thus semi-detaching blame from government. No more blaming builders. Especially no more blaming the bloody planning system.
Peter Bill is a journalist and author of Planet Property
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