Review says government housing targets can be met by ‘huge’ urban land supply
A blueprint for speeding up the release of urban land for residential development was unveiled yesterday by John Callcutt in his government-commissioned review of housing delivery in England and Wales.
The year-long review concludes that the housebuilding industry has the capacity to reach the government’s target of 240,000 new homes each year by 2016 and meet its objectives on design and sustainability.
But Callcutt is calling for a new partnership between public and private sectors in which local authorities and housebuilders would strike ‘composite development agreements’ covering large areas of towns and cities, rather than negotiating piecemeal over individual sites.
The review envisages councils holding ‘beauty parades’ before selecting preferred partners and agreeing financial and housing output objectives. Callcutt said the aim is to boost inner city values by encouraging developers to tackle difficult sites.
Callcutt told Property Week: ‘It gives them a land supply. It gives them an assured line of business … it’s open book on construction and other costs, and clearly planning is going to be less contentious in principle.’
He added: ‘There is a huge land supply and basic commodity need there, which will be less volatile than more affluent housing. So that can represent an extremely attractive line of business.’
The inner city partnership idea is part of a 38-strong list of recommendations from Callcutt, who has drawn on 80 submissions from across the public and private sectors since he left national regeneration agency English Partnerships last December to conduct the review.
Callcutt said that he and housing minister Yvette Cooper had seen successful partnerships on a tour of northern Europe last year, and that there are already similar agreements involving Bellway in Solihull and Bovis in Coventry.
’There are good partnerships between developers and cities, but I can’t pretend that those are the norm,’ he said. ‘In all too many cases, development is typified in towns and cities by mutual suspicion and sometimes downright hostility. That’s got to end.’
Callcutt said this would not require new legislation so much as ‘leadership’ from the Communities and Local Government department. He added that English Partnerships and its proposed successor body, the Homes and Communities Agency, would need to act as ‘ringmaster’.
The review hails planning policy statement 3, launched last November, as ‘a sound policy framework’ for ensuring land supply. Callcutt, a former chief executive of Crest Nicholson, said the industry can reach the government’s annual output target ‘without stretching itself’.
‘The industry can make those numbers if they’re all at the edge of town or in the Countryside, or in areas that are going to incur low cost and high value,’ he said. ‘The challenge is to make supply conform to the policy set out in the government’s Green paper, and that means an urban supply.’
However he warned that it would be some time before house prices would be within the range of people on modest incomes. ‘Housing is not just about new homes,’ he said.
‘It’s about the regeneration and renewal of communities. They have got to make a supply where it is needed, otherwise we’re going to have environmental problems on the edge of town and major social issues in our inner cities.’
The British Property Federation broadly welcomed the review. Commercial and residential director Ian Fletcher said: ‘Callcutt’s work closely reflects our own housing green paper submission, which emphasised the changes that PPS3 will drive, if properly implemented.’
Review targets volume housebuilders
The overall thrust of the Callcutt Review is for more joined-up thinking between central and local government, but some of its more contentious recommendations are directed squarely at the volume housebuilders.
It suggests that customer satisfaction surveys be taken
back from housebuilders and run independently. Developers that fail to reach a set minimum standard in two years would be ineligible to deal with public land or receive subsidies. Another recommendation is for the introduction of independent review panels on layout and design.
The importance of this is that when a developer submits ‘a lousy scheme’ the council can refer it to the panel, whose ruling would be binding in any appeal. ‘That will drive up standards immediately,’ said Callcutt. ‘At the moment there is no commercial incentive anywhere for quality.’
He indicated that design watchdog the Commission for Architecture and the Built Environment, which has been an outspoken critic of the volume housebuilders, could oversee such panels.
On public sector land sold to housebuilders, the review recommends that government or local authorities should be able to stipulate a rate of sale of houses to stamp out any possibility of land banking, and stop developers waiting for favourable market conditions.
Though Callcutt said he found ‘no evidence’ of widespread land banking, he welcomed the Office of Fair Trading investigation into the issue. The review also calls
for greater transparency in housebuilders’ financial accounts and other documents on the quality and planning status of their land.
‘It’s one of the few recommendations we’ve made direct to the industry, because we think it’s in shareholders’ interests that that information is clear and consistent,’ Callcutt said.
‘We think shareholders will put pressure on them to do that.’