By Ritchie Clapson CEng MIStructE, propertyCEO
The Department for Levelling Up, Housing and Communities is now the Ministry of Housing, Communities & Local Government (MHCLG). The message: not only are socks being pulled up, there’s a fresh pair in play. The trouble is that to get us on track to build the number of homes the country needs—a shortage of 4.3 million homes is being talked about—toes are going to have to be trod on.
Everyone wants the housing crisis solved. But there are a great number of people unwilling to accept two major red lines being crossed: no building on the green belt; no building anywhere near where they live. The true test of the government’s mettle will be whether it’s prepared to stomach inevitable local backlashes. A huge majority makes it easier to handle parliamentarians not toeing the party line regarding housing policy, and a few MPs are certain to find themselves stuck between unhappy constituents and uncompromising Whips. Resolve is going to be key going forward.
The plans
The government has announced a number of ideas it’s looking to implement, which it believes will unlock the 1.5 million new homes it intends to deliver in 5 years. One of these is the development of their newly-coined ‘grey belt’ land. Think of this as green belt land wearing overalls; land bordering our towns and cities that already has some form of development, such as car parks and the like.
There’s also been mention of building some new towns. Options include building extended urban towns that abut existing cities, creating extensions to existing cities which are separated by green space, or going all out for multiple versions of Milton Keynes (which has around 125,000 homes). This latter approach would take a lot more than the length of a single parliament – completing 12 new towns the size of Milton Keynes (including infrastructure, not just dwellings) is a big ask, so new towns can only play a part of long term plans, not serve as silver bullets.
Arguably, the most critical area being targeted by the government is unused brownfield land. This is land that has already been built on but isn’t currently used, including the empty shops and offices that blight our high streets all over the country. According to countryside charity CPRE, around 1.2 million new homes could be built using redundant brownfield land. This is a surefire vote-winner as no greenfield land is touched, plus it will help bring our town centres back to life. Also, all the infrastructure is already in place. This represents the quickest route to hitting the target, plus we’ve got more unused brownfield land becoming available every year.
Reality gets in the way
No plan survives contact with the enemy – that’s the gist of some 19th century Prussian military wisdom. And for our new government, the enemy is the housing landscape they’ve inherited, with the biggest eyesore being the planning system, which was last properly updated in 1947. With too few local planning officers working in a massively under-resourced system, it isn’t easy to see how the government’s bold high-level plans to unlock new homes will actually be approved at a local level. You can bet your own house on every green-belt landowner arguing that their own fair acres should be designated grey belt, but it will presumably be down to the local planning teams to decide each case on its own merits. Given they have insufficient resources to handle their current workload, I can’t see how this will happen. And planning officers are highly skilled; training takes time.
There are around 18,000 planning officers in England currently and the government has committed to recruit 300 more planners, an increase of just 1.7%. This prompts two big questions. Firstly, is it enough to make a difference? And secondly, where will they be recruited from? If they aren’t already involved in planning, then they’re going to have to be trained first which will necessarily take time before they’re going to have much of an impact.
New towns are also one of those ideas that sound great in principle but can prove trickier in practice. One key challenge surrounds affordable homes. The current planning approval process requires housebuilders to build a proportion of homes on their sites at cost. The government has indicated that it wants 50% of the homes in their new towns to be affordable. But if half of what a developer builds has zero profit, they’ll need to increase their margin from the other 50%. This is unlikely to be viable which may mean that new town projects prove unattractive commercially to developers. The government will need to devise another way of tackling the problem. This could involve allowing a small (albeit restricted) profit on affordable homes or having a tiered system whereby more profit is permitted based on the percentage of affordable homes the developer creates on any given site.
Another new town challenge is that we don’t have a recent poster child to shout about. Milton Keynes was built over 50 years ago, and our most recent effort, Northstowe in Cambridgeshire, began with a target of 10,000 homes, yet only 1,500 have been built. The town fell victim to the country’s dire planning system, with too few local amenities being built to support the people moving in: no high street, pubs, or cafes. If the government is to convince people that new towns are the way forward, they’ll need to learn from the failures of their predecessors and ensure that these communities will be of good quality. This means ensuring that amenities are available for early adopters and that the planning system is fit for purpose.
Opportunities
What about brownfield redevelopment? A challenge here is that this sort of project doesn’t appeal to the scale housebuilders who typically create new buildings in large fields – they don’t have the skills or appetite to repurpose existing buildings on smaller sites. This opportunity instead falls to smaller developers, often solo entrepreneurs and investors, and this is where the government needs to provide some support. We’ve had nearly a decade of the previous government targeting landlords and property investors to the point where the buy-to-let investment model barely stacks up. Yet these are precisely the people who could readily turn their hand to small-scale development projects – in fact, many already do refurbs, flips, and buy-to-let upgrades.
If CPRE is correct that around 1.2 million new homes could be built using redundant brownfield land, that’s most of the target for this parliament. And if the government helps unlock potential new homes from brownfield land while at the same time encouraging entrepreneurship and wealth creation opportunities for individuals, they could be looking at producing a spectacular win-win.