Industry reacts to housebuilding proposals

Published:  01 October, 2013

The Federation of Master Builders welcomes government measures to encourage self-build projects, while Ed Miliband pledges that the next Labour Government would tackle the housing crisis by building 200,000 homes each year, with a 'use it or lose it' policy aimed at property developers who do not start work onsite straightway.

The measures, announced by Communities Minister Don Foster at the Liberal Democrat Conference, are designed to encourage take-up in the self-build sector, and include guidance for planning authorities to better identify local demand for self-build, and a review of small sites held by the Homes and Communities Agency to identify more land suitable for small developments and self-build projects.

Brian Berry, chief executive of the FMB, said: “At a time when more and more people are trying to get on to the housing ladder, any attempt to get the self-build market moving is a positive step forward. We know that the self-build sector is an underdeveloped part of the UK housing market, accounting for only around 10% of all new homes, which compares unfavourably with other European countries such as Germany and Ireland, where the figure is 50%, and Austria, where it is as high as 80%.

“The government’s proposed new planning guidance will encourage local authorities to accurately assess the level of demand for self-build in their area, which should in turn lead to local plans making better provision for self-build opportunities, increasing the options available to anyone looking for a new home. Local housebuilders typically champion choice and customer focus, and will be ideally placed to deliver the high-quality custom-built homes many people aspire to live in.

“Any exemption from paying the Community Infrastructure Levy needs to apply to all small developments, not just self-build projects, to ensure that large numbers of smaller sites do not become unviable, further weakening local housebuilders and reducing the capacity of the industry to deliver the uplift in new housing that the country as a whole so desperately needs.”

The new measures were announced shortly before Labour pledged to build new homes on “a grand scale” if elected in two years time.

John Newcomb, managing director of the Builders Merchants Federation (BMF) and Brett Amphlett, BMF policy manager, attended the Labour Party Conference to hear Ed Miliband tell his Party that the next Labour Government would tackle the housing crisis by building 200,000 homes each year.

Miliband’s solution is to set an ambitious target of building new homes at twice the current rate annually between 2015 and 2020. To do this, he has big ideas on un-used land, local authorities, and planning regulations that his team is formulating into policy for the 2015 Manifesto.

Land banks

Shadow Housing Minister Jack Dromey MP met the BMF to explain the thinking behind the proposals.

Labour’s most controversial idea is to force developers who hold sites with planning permission already granted to start building - or face new controls, fines or possible confiscation.

This ‘use it or lose it’ policy is aimed at property developers who do not start work onsite straightway. Labour wants to entice speculators to release land before government steps in to force their hand. Dromey will look at giving local authorities new powers to compel owners to sell. Any new powers are likely to include the ability to assemble smaller parcels of land to make the combined area more economically feasible and financially viable to develop properly.

Dromey added that he wanted to reduce the upfront cost of land and have more SMEs involved in tackling the housing crisis.

Newcomb welcomed Labour’s desire to address the housing shortfall but says they have to strike the correct balance between compulsion and encouragement.

“As a country, we are building fewer than half the number of homes needed to meet population, demographic and lifestyle changes, but striking the correct the correct balance between compulsion and encouragement of landowners is more crucial than ever. Statutory powers like Compulsory Purchase Orders or charges and fines are easy options that risk antagonising the customers of merchants at a time when BMF members are seeing on-the-ground activity getting going again,” he said.

However, the BMF believes carrots rather than sticks are a better way to re-invigorate the industry. Though this route can be more difficult, the Federation believes it is more likely to yield collaboration between government and industry as partners who strive to house the population.

At the close of the Conference, Amphlett observed: “With 20 months until the General Election, it is clear that building new homes, and planning permission necessary to have housing completed, is a distinct battleground between political parties. Conservatives favour Localism whereas Labour believes in a more prescribed approach.”

Property and planning law firm Winckworth Sherwood said the proposal to allow local authorities to take back land from housebuilders would fail and not deliver any new homes.

Karen Cooksley, a partner and planning law expert at Winckworth Sherwood, said: “Successive governments have tried and failed to force the public sector to release land for housing. Forcibly taking land off housebuilders into the public sector will undoubtedly face legal challenges.

“Ed Miliband would be far better focusing his attention on making local authorities and other public sector organisations release land they hold for new homes as government has more direct control over them. He could start by making sure central government departments are first in line.”

Cooksley also argued that home ownership is not the only solution to solving our housing need and there is an appetite from new and institutional investors for increasing the size of the private rented sector.

“These proposals are largely a repetition of existing – Coalition Government – policy. It is time for genuinely new thinking if inroads are to be made into our rising housing need,” she concluded.

 

 

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