Bob Seely is Member of Parliament for the Isle of Wight.
Whoever becomes our next Prime Minister needs to bring fresh thinking to housing. We can’t have more of the same. The current policies are flawed, built on a system which is a failed mix of free market (land banking, a tax regime manipulated for developers’ benefit, unsustainable housing estates) and over-complex planning regulations.
Overall, Britain is moving to a more sustainable economic model. We need to do the same in housing. We need a model which stresses recycling of existing buildings as well as existing brownfield sites. We need to use space more efficiently, and design a tax system to encourage this. We need to increase density in towns, where there are services and communities, rather than using up greenbelt, where there are none. We need to reform the system to allow more of the right houses to be built, in the right areas, in the right styles. We need to give councillors the confidence to demand better from the system.
First, the facts. Britain needs houses. The number of households is projected to grow by 159,000 per year based on current trends. We need between 250,000 and 340,000 additions per year to clear the backlog of over 4.7 million households with housing need across Great Britain.
But it’s not just the right numbers we need, it’s the right type of housing. Both old and young are being squeezed. For the young, house prices have grown seven times faster than family incomes, according to IFS research – meaning many can no longer afford to own their home. In 1995-96, some 65 per cent of 25-34-year-olds with incomes in the middle 20 percent for their age owned their own home. Twenty years later, that figure was just 27 percent.
For older folk, households headed by a pensioner account for 88 percent of the projected growth in households between now and 2041, yet an NPI study found “there is a very limited choice for older person households” moving home.
In addition, housing is being built in the wrong places. According to the CPRE, there are currently 460,000 homes planned on Green Belt land. These developments lack affordable homes, are not near services, are car dependent and require new infrastructure. They are truly unsustainable.
My constituency of the beautiful Isle of Wight reflects this national problem. We are being told to build too many homes, in the wrong places, and they will not be for Islanders.
So how do we build better, whilst treading carefully in our countryside? Below are ten ideas.
First, Stamp Duty is killing the market. It’s too high. Evidence from over two dozen prominent voices including the Adam Smith Institute, IPPR and IFS indicates that Stamp Duty is blocking 45,000 property purchases a year, preventing young and old from moving. We should scrap it or reduce it.
Second, utilise our current property stock better. Some 634,453 dwellings were vacant in England on 1st October 2018. Some of those were properties over shops. A UK-wide flats-over-the-shop capital allowance scheme (Flat Conversion Allowance) was repealed in 2012. We should open it again and simplify the system to encourage investment in town and city centres. Let’s make undeveloped spaces above shops economically attractive to live in, but economically painful to sit on.
Third, introduce a multi-million pound ‘bungalow fund’ to convert bungalows into two or more housing units. This would encourage housing associations and councils to buy up bungalows with assumed planning consent for adding a storey to create two properties. Thus, we gently increase density in towns and villages, where there are already services.
Fourth, we should reduce or scrap VAT on all renovations – and consider adding VAT on green belt and green field development. A study on the effects of reducing VAT for renovation and repair from 20 percent to five percent for the years from 2015-2020 projected a total stimulus effect of more than £15.1 billion and 42,050 extra full-time equivalent construction jobs by the end of 2020. It also found a potential saving of up to 237,128 tonnes of CO2 as homes are improved. This is yet another example where lower tax leads to overall economic gain.
Fifth, help smaller councils and housing associations to bid for the £9 billion available to establish a new generation of Council/Starter/Key Worker Housing. This funding should be available to all councils and housing associations, not just some as is currently the case. My council on the Isle of Wight, if it was allowed access to government cash, would build community housing more quickly than developers. The Government should also seek to pass land held by its departments to councils more quickly. It has taken 12 years for Homes England and its predecessor to release land for housing and jobs in East Cowes on the Island; unacceptable!
Sixth, increase community involvement in housing and strengthen local democracy. Give parish and town councils statutory consultee status. Make neighbourhood plans easier to develop. Encourage councils to develop housing strategies for local need rather than just plans which meet government targets. Extend time to oppose planning applications and prevent manipulative developers from gaming the system. Ensure that councils get infrastructure money from developments – known as Section 106 cash – even if they oppose the development. Allow councils – and MPs – to apply to withdraw planning permission.
Seventh, give housing associations greater power to evict anti-social tenants.
Eighth, scrap the automatic Right To Buy and find more cost-effective ways to support home ownership. For example, rent-to-buy schemes. These schemes support homeowning aspirations by allowing young renters to pay below market rates for housing with a chunk of their money going to a house deposit. For one rent-to-buy policy, over a million people could move into home ownership.
Ninth, build beautiful. Local planning should include clear local design and style guidelines. On the Island, we have a beautiful cottage and brickwork style, unique to us. It is painfully ironic that over 100 years ago we were building better housing for the poorest people in our society than we are now.
Finally, give leeway to local councils to chose a different methodology for assessing housing need, and allow councils, provided they behave responsibly, to assess their own housing requirement.
To sum up, let’s introduce a sustainable, recycling model for housing and land use. Get housing right and we deliver lots of social and economic good – and please old and new electoral constituencies. Get it wrong and we alienate our core voters without winning over new ones. It should be an easy choice.