Release land to build the homes Britain needs

This article first appeared in the Financial Times on 23 July 2007

The housing market has long been the British public's number one obsession. Now it has also become the number one priority for Gordon Brown's government.

Expressing good intentions, however, is the easy bit. There is now an urgent need to put flesh on the bones if a housing policy framework is to emerge that is capable of delivering. But of delivering what? The list of priorities in this area is long and sometimes contradictory.

As a nation we need more homes to be built - perhaps another 230,000 every year. But green belt land is to be kept sacrosanct. We want developments to have higher design standards, with lower density and to be zero carbon, yet be more affordable.

We want more consultation with more stakeholders and agencies but want developments to be brought forward more quickly. We want a higher proportion of social and intermediate housing without dimming the incentives for landowners and housebuilders to start work on developments.

All of these issues are legitimate. All of these views are strongly held. So by what yardsticks should we judge the government's green paper this week as it grapples with them?

First, the supply of land available for development must be increased significantly. That will be the bedrock of any successful housing strategy in the next 10 years. Of course there are allegations of "landbanking" by housebuilders, but the reality is that 97 per cent of developments start within three months of obtaining detailed planning permission.

The announcement that 550 government-owned sites are being looked at for potential housing development is a good first step. There is an urgent need to bring that land forward. Pledging to build 100,000 homes in new "eco-towns" also makes sense so long as they are in places where people want to live. It is certainly right that brownfield and should be the priority and it is where Barratt already builds 80 per cent of its homes. But we should be wary of saying that all greenfield land is a no-go area. The likelihood is that some greenfield land will be suitable for new homes and it is certainly true that much never will be.

Second, as more land comes forward it needs to be more rapidly transformed into vibrant, mixed communities. The planning system is slow and frustrating. Although it does not deserve the opprobrium often heaped on it, it needs reform and current proposals are unlikely to go far enough.

While the proposed changes may make it easier to build a nuclear power station or at the other extreme a small house extension, there is little in them that will help the housing supply.

So more radical measures will need to be considered, and these must include giving local authorities a greater incentive to promote and secure development for the benefit of the communities for which they are responsible. Housebuilders will also have to raise their game, demonstrating the benefits that regeneration can bring and contributing to the public policy debate.

Third, affordability needs to be addressed. There is no doubt that innovative products targeted at first-time buyers, such as shared ownership schemes, have a part to play. But bending a regulation here or contriving an eye-catching incentive there will ultimately have only a marginal impact on this most pressing issue.

If as a nation we believe that more social housing on a significant scale is needed, we as a nation should be prepared to invest more money in it. That should be funded from the public purse, either directly or via land subsidy. If local authorities can be allowed to raise this extra funding locally, then all the better.

But as well as addressing affordability, developers and government must act in partnership if zero-carbon homes are to be delivered as envisaged within the next 10 years.

Housebuilders need to lead debate about how the sector will have to change during that period rather than falling back on the old mantra that consumers would prefer things to stay as they are. Specifically, they will have to drive changes in design and materials technology while holding down cost if zero carbon is to be delivered affordably.

Consumers also need to play their part. After all, any zero-carbon home will swiftly lose that status if the behaviour of its occupiers is profligate and energy-inefficient.

To accomplish any of these goals it would help if the level of debate on housing were elevated above the standard witnessed hitherto. The sight of planners, developers and policymakers all blaming each other for the current shortage of supply achieves little.

It is imperative that both government and the industry act quickly. Even if the shortage of supply in the UK housing market were addressed tomorrow, it would be at least two years before the hard-pressed first-time buyer noticed any improvement.