Yesterday saw the release of the long delayed and much anticipated government White Paper on housing. The report, delivered in a statement to Parliament by Communities Secretary Sajid Javid, represents a cornerstone of Theresa May’s agenda to improve outcomes for low to middle income families, young people and those ‘just about managing’ (the Jams). Briefings to journalists before the release raised hopes of a major policy shift to deal with the twin issues of supply and affordability, as well as effective reform of the planning regime. But are the measures outlined radical enough to deal with an assumed shortfall of 1.25 million units in England alone?

Measures include:

  • Forcing councils to produce an up-to-date plan for housing demand.
  • Expecting developers to avoid “low-density” housing where land availability is short.
  • Reducing the time allowed between planning permission and the start of building from three to two years.
  • Using a £3bn fund to help smaller building firms challenge major developers, including support for off-site construction, where parts of buildings are assembled in a factory.
  • A “lifetime ISA” to help first-time buyers save for a deposit.
  • Maintaining protection for the green belt, which can only be built on “in exceptional circumstances.”
  • Introducing banning orders to remove the worst landlords or agents from operating.
  • Banning letting agents fees.

A decade ago, then Bank of England policy maker, Kate Barker, produced the Review of Land Use Planning report which recommended root and branch reform of the planning system as a crucial step to unlock economic potential. Whilst there have been changes in the intervening years, it is clear that the system remains largely opaque and a source of great frustration for the housing sector. Furthermore, Sajid Javid highlighted cases where councils have hidden the true extent of their own local shortages in order to avoid opposition to new developments, whilst more than 60% of Local Authorities have no active housing plan at all.

Working to resolve planning bottlenecks, increasing build density or getting creative with unit sizes and heights will all work to reduce the shortfall, altering the demand/supply balance, but can only be truly effective if combined with other measures to improve affordability.

Despite solid employment trends of late, thirteen years of stagnant real incomes, a financial crisis, QE and a near record income equality have served to lock many groups, particularly young key-workers out of the housing market, forcing them in to an expensive rental sector. To solve this we must build more affordable homes. Ensuring new developments include at least 10% of affordable units is a step in the right direction, if rigorously enforced.

Although derided by opposition groups, the White Paper has been applauded by house builders and is clearly a step in the right direction but much more must be done to simplify planning and improve affordability. The report admitted 250,000 homes must be built each year to fix a ‘broken’ housing market. Making better use of empty property should be prioritised and the rented housing stock needs to be brought up to scratch. Green spaces must be protected but it is clear that brownfield development alone is insufficient to plug the yawning chasm. More measures are needed to aid first time buyers and to reduce the cost of getting on the housing ladder. A national plan combining housing need with infrastructure and communication links would be of great benefit to our future outside the EU.

Mike Harris – Independent Director.