Posted on February 27, 2014

Having just sat on a panel with the current RICS President Michael Newey discussing housing, I heard one of my colleague panel members say, “there is no one silver bullet” to address the critical issues that we face…

…The hour and half discussion we had raised many issues and reminds one of the complexity that we face as individuals, communities and an industry.  Comments and questions came forward about greenfield / brownfield challenges, housing numbers, the private rented sector and affordability.

Successive Governments (and several more Housing Ministers) have had the same stated aim to increase the rate of delivery.  However, it is somewhat notable that the now Housing Minister, Kris Hopkins is not a Cabinet Minister – this to me exemplifies the problem that we face with this issue.  Put simply, we lack a cohesive cross Government response and strategy to housing.

To explain this further I am reminded by the work that CABE (Commission of Architecture and Built Environment) did.  The organisation was part of DCMS, however its work crossed government departments including CLG, Education and Health.  CABE was heavily involved in the design process of new schools and hospitals – bringing the agenda of high quality design forward across the work (and spend) of government.

Bringing this back to housing, I would like to propose the following as a ‘manifesto’ for housing.

1. If we have a housing crisis – then make the Housing Minister a member of the Cabinet. The Minister would ensure that the “Housing Agenda” is embedded across policy and work of the public sector.
2. The Bank of England / HM Treasury need to actively regulate lending markets to ensure that debt fuelled housing bubbles are avoided.  The Bank Base rate is too much of a blunt instrument to manage the economy and housing.  The BoE should use “macroprudential tools” such as Debt-to-Income (DTI) ratios which would be a direct lever on the housing market which is separate to the Bank Rate and has other consequences for commercial investment.  Click on this link to the RICS Economic Research paper, Is it time for a second nominal anchor in the UK? – Managing house price inflation with macroprudential tools.
3. North v south – acknowledge that there is no ‘one-size-fits-all’ and policy that may seem sensible for Greater London and the South East may be entirely counter-productive in the regions for example, garden cities, green belt release, affordable housing and CIL.
4. Viability – continue the focus on viability in plan making, but also encourage planning authorities to be more flexible in plan making and applying affordable housing policies.  For example, prioritising affordable housing or infrastructure from projects, enabling investment in low demand areas, encouraging continuing investment in high demand areas.
5. Brownfield land – incentivise the re-use of brownfield land through fiscal measures (i.e. through the taxation system) and to also enable aspects such as CIL and S106 to differentiate between green and brownfield sites.  This would enable regeneration of brownfield sites which are more likely to be in sustainable locations where there is existing infrastructure.
6. Remember regeneration – there are neighbourhoods within most of our provincial towns and cities which have housing stock which is affordable to most people in employment – however it might not be the first choice location.  These neighbourhoods need ‘Total Place’ type initiatives which can change the trajectory to one of more demand and private investment.
7. Self Builders (1) – make it easier for non-‘grand designers’ by encouraging the development of a new sector of suppliers that can provide an end-to-end construction solution.
8. Self Builders (2) – we need a range of fiscal incentives which will make taking the step more attractive.  We would also recommend that more mortgage products are provided to support this sector.
9. Self Builders (3) – release public sector land which is serviced for self-builders and innovative SME developers to complement the activity of the national house-builders.
10. Empties (1) – it is not sustainable for the long-term for government to encourage investment from overseas in London to “buy-to-keep-empty”.  The tax system has to dissuade investors from leaving properties empty which could otherwise be occupied.
11. Empties (2) – Local Authorities in the regions need to be provided with the tools (e.g. empty dwelling management orders, compulsory purchase) and resources (e.g. through CIL, commuted sums, new home bonus etc) to deliver new investment, refurbishment and regeneration of low demand areas.
12. Better design – We are still seeing small unit sizes in the pursuit of viability to the point where this is unsustainable.  Government policy (including recommended floor space standards) should encourage high quality design.  This will be rewarded through faster sales rates and values.
13. Private Rented Sector (PRS) – to continue with the recommendations of the Montague Review (click here) to make this an “institutional investment” product.  Success depends on a combination of factors, including codes for managers of rented property, removal of the “threat of rent controls”, sites for innovative schemes to be piloted and enabling this product to be delivered at scale.
14. Social Housing – we have a reliance on private housing leading the delivery of social housing and it is ironic that the supply for affordable housing is reliant upon ever rising prices in the private market.   The private sector has only ever delivered a fraction of the housing required and we need a parallel approach for “direct delivery” with Local Authorities and RP’s using their existing land assets and balance sheets to deliver units.

I don’t consider that any of the above to be new.  The innovation has to be the coordination and focus of policy which can collectively contribute towards greater delivery of new housing opportunities.  There is no one silver bullet, but perhaps a magazine of such bullets that we need to use to address the challenge we face.