What can the Government do to hit housing targets?

What can the Government do to hit housing targets?

The UK needs more houses. That’s been the case for a while now, but still demand massively outstrips supply.

This puts upward pressure on house prices, meaning that buying a home is kept out of reach for many.

This, in turn, places extra pressure on the Private Rented Sector, with more people than ever renting.

Schemes such as Help to Buy, shared ownership homes and Build to Rent only help up to a point, but they aren’t going to solve the problem on their own. Not even close.

The Government has made a big deal out of affordable housing since being elected last May, and there are signs that first-time buyers are starting to find it easier to get a foot on the property ladder.

The Help to Buy ISA has helped in this regard, as has the additional stamp duty surcharge on buy-to-let investments and second homes. By making buy-to-let less attractive as an investment, over the next few months more stock is likely to be freed up for first-time buyers to snap up.

Measures such as the Lifetime ISA, which comes into force in April 2017, will also make it easier for people to save for a deposit.

Equally, the announcement of the return of the 100% mortgage – courtesy of Barclays – has given further hope to first-time buyers (although this still relies on a big helping hand from the Bank of Mum and Dad).

The Government has a target of building 1 million new homes by 2020, with many of these shared ownership properties or Starter Homes.

This means 250,000 homes are required each year. In 2015, just 136,000 homes were built in England. This, and the Government’s record on housebuilding since 2010, is understandably making some sceptical about the 1 million target being met.

In the recent Queen’s Speech the government outlined a number of plans to speed up the housebuilding process.

This included a pledge to streamline pre-commencement planning conditions to help accelerate housing developments, as well as giving local communities more say over neighbourhood planning and changes to ensure compulsory planning orders are “clearer, fairer and faster”.

And now a new report, published on Friday 20 May by the Centre for Policy Studies, has put forward how the Government – if it 'strikes now' – will be able to build the number of homes it has promised.

Keith Boyfield and Daniel Greenberg, authors of A Convergence of Interests, argue that all the pre-conditions are in place to make a fast rise in housebuilding feasible.  

They argue that Sadiq Khan, recently voted in as the new Mayor of London, stands in a unique position at the start of his mayoralty to deliver the new homes that the capital is desperately crying out for. Surplus public sector land could provide at least 130,000 new homes on its own, the report suggests.

Boyfield and Greenberg have outlined a number of reasons why the barriers to housebuilding in the UK are no longer as strong as they once were.

For example, nimbyism – usually characterised as opposition to new developments by local residents – would appear to be in rapid decline as more and more people appreciate the need for additional housing.

They also argue that institutional capital is gradually becoming more and more interested in housing developments and infrastructure projects.

Furthermore, many local authorities already have major new developments in the pipeline, while those who don’t will be encouraged to do so “through the Government’s requirement to identify a target figure for new homes in their Local Plans”.

Boyfield and Greenberg have called on the Government to exploit these opportunities with one simple and innovative policy: Pink Zones.

They are known as Pink Zones because, instead of the current planning system which is so often bogged down in red tape and regulation, the pink option provides a more diluted regulatory system, making it easier to push developments through and get homes built.

According to the report, Pink Zones would: provide a streamlined planning system for the construction of vibrant, attractive and prosperous new residential developments underpinned by social and physical infrastructure; work from the bottom up – not the top down – bringing together local residents, developers and councils to achieve consensus over new development and accelerate the development process; and increase competition, bypassing many current planning regulations and improving design standards.

The US has already successfully introduced Pink Zones, in cities like Phoenix, Arizona, and the authors of the report believe the UK should implement them as well.

They admit that this would mean re-designating the greenbelt and building on some areas that are currently classified under this umbrella.

As long as this is handled sensitively, though, Boyfield and Greenberg can see little issue, especially since the amount of land designated as part of the greenbelt has more than doubled since 1979 (some of which can barely be counted as “green”).

“Ultimately Pink Zones would create more and better homes for people throughout the country and tackle the poverty of aspiration which typifies much residential construction in this country,” Boyfield said.

“Our Pink Planning proposals create a mechanism whereby a convergence of interests can be taken forward. By encouraging Special Purpose Vehicles to emerge, Pink Planning, with its streamlined planning framework and a single consenting regime, can bring together all the relevant parties to create new developments that are finely tuned to the needs of individual communities.”

With the difficulty the Government is currently having with hitting its housebuilding targets, it would be a wise move for them to at least consider such a report. It could make all the difference.