Brexit: Solving the housing crisis?

Posted by Sara Hanrahan on
Blake Morgan planning Partner Sara Hanrahan’s comments on proposals that more housing should be built in affluent areas are included in The Times Law today.

A detailed piece by Edward Fennell discusses the Communities Secretary's recent assertion that “some areas are treated better than others” and looks at the Government’s role in delivering new housing.

Those with membership of The Times Online can read the piece here: 

The comments were made by Sajid David following the launch of a Government consultation into future provision for housing, launched last week. 

Here, Sara expands on her comments and discusses how practical the proposals are:

Why there is a particular problem about 'rich areas?”

In some of the wealthier parts of London such as Westminster and Kensington and Chelsea it is nigh on impossible for developers to incorporate anything like the level of affordable housing that the Communities Secretary wants and still make a profit. If councils are too rigid about the amount of affordable housing within schemes then development simply stalls. It was precisely because of this danger that viability testing came into prominence. However, proving viability has become increasingly complex and housebuilders are as keen as everyone else to find ways to make assessment simpler and speedier which the Consultation Paper hopes to achieve. There is scepticism around the Government’s proposed solution for ensuring that housing reflects the "actual need for homes in each area". It’s a laudable ambition but it’s not clear how this will be achieved.

Sajid Javid's comments to the LGA that "some areas are being treated better than others" suggests that there is some sort of collusion within the system to keep rich areas rich. This is not the case. Market forces drive gentrification which in turn leads to house prices increasing. The solution cannot be to simply demand increases in supply in order to reduce house prices. There is similarly a problem with homes actually being "affordable" where, for example, 80% of market rent is still well above most wages. What is required is greater incentivisation if the 'broken' system" is to be fixed and not simply stuck with more plasters. 

What is the significance of 'green belt', National Parks and Areas of Outstanding Natural Beauty to this problem?

The Government has a difficult role to play as it has promised to protect the Green Belt and AONBs etc but yet also needs to find new ways to deliver more housing. The Consultation Paper recognises this dilemma and looks to remedies such as higher density and innovative new builds  In relation to higher density, significant new guidance would be needed as currently developers will often get kicked back for having schemes that have too many storeys that affect visual impact. However, the Government's recognition of the potential importance of precision engineered pre-manufactured homes is an exciting new development with great potential. Designs for factory made homes have evolved considerably over the last few years to provide much cheaper construction costs and quicker deliverability and yet remain environmentally friendly and aesthetically pleasing.

What kind of new pressures and powers might be available to central government to drive through change to expand new building to significant levels?

In October 2016, the Government committed funds of £3bn into a new Home Building Fund - and just this month Sadiq Khan set out a £250m plan to buy more land for additional homes within London. These are substantial amounts of money that should make a real difference over the next few years. The aim is to add one million new homes by 2020 but this is a huge target given that we are currently building around 160,000 each year and it is doubtful that even with all the proposed changes and funding we will get even close to this. Unpopular as it may be, the very real solution to meeting need that has not been put forward in the Paper is to release significant areas of greenbelt around our towns and cities for managed sustainable development. 

The comments were made by Sajid David following the launch of a Government consultation into future provision for housing, launched last week. 

About the Author

Sara specialises in urban redevelopment projects, particularly advising in relation to compulsory purchase and affordable housing schemes.

Sara Hanrahan
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