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Cllr James Fredrickson is the Cabinet Member for Public Health on West Berkshire Council.

Sajid Javid does not have an easy task ahead of him. Since taking on the role of Secretary of State for Communities and Local Government in July last year, he has set himself the target of kick-starting a housing market that, by his own admission, is in crisis. His comments last week mark a welcome step change; announcing that the government’s goal is shifting to expanding housing supply rather than boosting demand. Yet some backbench MPs have baulked at Mr Javid’s request for £50 billion of borrowing to fund an expansion of social and affordable housing. Whilst any support to enable local authorities to provide affordable housing should be lauded, Jacob Rees-Mogg is right to highlight that it is supply, rather than capital, that the housing market needs. Unfortunately this a far more difficult issue to tackle.

The first hurdle is historic planning policy. Supply is tightly restrained by a plethora of planning restrictions. The approval process itself is also conflicted. Many residents are homeowners and will not want to see their house values fall through a sudden expansion of the local housing supply, on top of fearing a sudden spike in infrastructure congestion that can follow large scale development. As for the local authorities, they are resource-constrained and tied in procedural red tape. They then often prefer fewer larger sites within their local plan rather than having to handle many smaller incremental applications.

Previous policy decisions have also inflated demand. Whilst the ‘Help to Buy’ scheme has lifted many first-time buyers into home ownership, this benefit is relative. Whilst the policy expands the credit supply to young first-time buyers, it functions to increases the funds chasing a relatively static supply of goods. This then inflates prices. The first-time buyer’s comparative gain is then a loss to everyone else looking to purchase a property. Meanwhile, homeowners have reaped the rewards of holding on to their property and watching its value increase.

As a first step, liberalising planning rules to incentivise private sector investment would be an effective means to motivate build. Javid has rightly pointed to London’s density being considerably lower than that of other European major cities. Reviewing build height restrictions is then a clear step in the right direction.

As for expanding the supply of available land, there is a growing call for reviewing access to the green belt. Even a three per cent reduction in green belt space around London would deliver enough space for one million homes.

Both of these options are contentious. Many would not want to see high-rise buildings creeping ever upwards, nor previously public open spaces being turned into building sites. But with a housing market inaccessible for the majority of 25-34 year olds – long held resistance to such ideas may need to change.

In my own ward of Victoria in central Newbury, similar debates are ever present. By a slim majority, Vodafone was permitted to develop its global headquarters on greenfield land just outside the town centre. Whilst contentious at the time, that development stimulated the growth of the area’s tech economy, which as a sector is now the area’s largest employer. On the other side of the town, another once contentious housing build adjacent to Newbury’s racecourse has received a national award for integrating public open space into the wider development.

A contentious build is not then always a bad one; nothing worth doing comes easy. I hope that Javid takes the same approach to policy when reflecting on how the private sector can lead the expansion of our country’s housing supply in the years ahead.

 

17 comments for: James Fredrickson: Commitment to expanding the housing supply is welcome news – but the private sector must lead the way

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