What The Parties Are Missing In The U.K.'s Election Debate About Housing
Housing remains a massive issue for the U.K. and is playing a role in this week’s snap election.
This is reflected in the manifestos of the three main political parties, where housing policies take up considerable space, and form a significant part in their visions for how British society and its economy will work.
We asked experts across the spectrum of residential real estate what was good about the manifestos, what had them worried, and what was being overlooked entirely as the U.K. tries to bridge the growing gap between demand for housing and homes being built each year.
According to our experts, the Lib Dem target lacks credibility, green field policy needs to be reviewed, councils should be fined for slowing up the planning process and investors are not as worried as you might think about rent controls.
The man who wrote the government’s independent review – Cast Consultancy Founder and Chief Executive Mark Farmer
The positive: "It was pleasing to see references to modern methods of construction such as pre-manufacturing to increase capacity in the Tory manifesto. Other than that were few differences from the already published White Paper on housing."
“It was interesting to see that all three parties referenced in different ways some form of land value tax to help capture the uplift in value created by public investment in infrastructure. It seems that will be something definitely on the table in some form.
The weak spots: “I think the Liberal Democrats’ pledge to build 300,000 new homes a year by the end of the next parliament is not really credible, especially since they are silent on changing methods of construction. Anything above 250,000 is impossible without those changes. And if Labour want to build 100,000 affordable homes a year, they need to look at how they will provide the skills and resources that local authorities would need to do this.”
What’s missing: “I think not having some sort of fiscal incentive around Stamp Duty Land Tax for developers who adopt innovative methods and so improve capacity, either for themselves or to be passed on to buyers, is missing a trick.”
The financier – Urban Exposure CEO Randeesh Sandhu
The worry: “The issue of land-banking must be approached in a way which does not undermine Britain’s strengths as a leading destination for international investment. Proposals put forward against land banking to simplify the CPO process might be seen as diminishing private landowners’ rights, which may dent confidence in the security of title. Something within the planning process to ensure prompt implementation of planning permissions would be more palatable.”
What’s missing: “It seems to us like government, local authorities and bodies like the Greater London Authority don’t engage enough with non-bank lenders. There are a diverse range of financiers willing to fund residential development out there, active engagement will encourage more diversity and innovation in financing solutions. In the same way as you have a list of developers who are preferred partners when it comes to working with local authorities to develop public sector land, you need the same for lenders, and other parts of the value chain like lawyers. Schemes could be significantly slowed down because the lender or the professional advisers don’t understand the complexities of development and working with public bodies.”
The analyst – Hometrack Research and Insight Director Richard Donnell
The unnecessary worry: “There’s been some discussion of rental controls [proposed in the Labour manifesto] and how that might put some institutional investors off from investing in the private rented sector. But the more progressive institutions are already looking at longer-term tenancies with index linked rents, and I don’t think they are really that bothered about it. If you look at the average length of dwelling in rented properties it is four to six years, so a three-year, inflation linked lease wouldn’t scare people away."
What’s missing: “Central government needs to be more supportive in terms of allowing city regions to get building through the planning system. It doesn’t matter whether that is through housebuilders, local authorities, housing associations or build-to-rent.”
The housebuilder – Berkeley Chairman Tony Pidgley
The weak spots: “There’s no silver bullet, but we need more additionally and more affordability, because at the moment working class people in this country can’t afford to buy their own homes. We need to make sure that if one rule goes wrong we don’t introduce another rule until all of a sudden there are hundreds of rules and the planning system is too complicated."
What’s missing: “Central government needs to undertake a review of regulations around green field sites. I’m not talking about greenbelt with parks and oak trees where children play, but scrap yards and quarries that have got the wrong designation and are called green field. If within the local plan councils went round and said this area doesn’t do anything for society but could be a site for 10, 15, 150 houses, that would have a big impact.”
The private equity guy – Patron Capital Managing Director and Senior Partner Keith Breslauer
The manifestos: “The National Planning Policy Framework has done a good job in making sure more sites come forward that have the potential for development. But one problem is that local councils don’t have the staff to deliver the Local Plans nor to expedite the actual applications that are now coming through — they need resources and budget to deliver their objectives. And some councils in areas where there is strong demand, especially around London, are not accelerating planning applications where they could, in order to satisfy existing residents who don’t want new development near them.”
What’s missing: “You need to use the carrot and the stick, more resources to help councils that do want to process applications quickly, which can be done through planning performance agreements where the developers pay extra to help, and fines for councils that are holding things up.”
The housing association savant with a love of built-to-rent – Places for People Director of Product and Service Innovation Alex Notay
The manifestos: “It’s good to see that all parties are now looking beyond "for sale" housing as the only solution to our housing crisis. We’re keen to see an increase in housing across all types and tenures, from custom-build or shared ownership through to build-to-rent or affordable housing."
The overlooked: "We also need more of a focus for those people who are in work but not eligible for any housing support, who can’t get on the housing ladder in terms of ownership or afford what is available in the private rented sector either.”
What's missing: “We need to adapt the planning system in a number of ways so it is fit-for-purpose — so it can cope with new forms of tenure such as build to rent as well as modern methods of construction such as modular or off-site, which don’t necessarily fit the traditional assumptions on build-out rates. Enabling developers and investors to have greater certainty about where they stand as well as speeding up the process will help the entire industry generate additional, quality housing stock alongside traditional output.”