Today, Chancellor Rachel Reeves set out the Government’s plans to promote growth and to kickstart the UK’s economy after a decade of stagnation under the Conservatives.
This followed recent announcements from the Government over the weekend which caused a stir across the housing world. First, Reeves announced a plan to introduce a “zoning scheme”, with a presumption in favour of development around train stations to allow homes to be built faster and without unnecessary barriers. And Housing Minister Matthew Pennycook announced a White Paper on Planning and Infrastructure which reduced the extent to which nationally significant infrastructure projects would have to consult with a broad range of stakeholders.
It is clear that stability and certainty is one of the Government’s main arguments for the UK to be an attractive investment destination. With an unpredictable Trump across the Atlantic, and political instability across Europe, Labour’s sizeable majority and loyal party makes the UK a rare island of (relative) calm.
This stability is clearly being driven from Reeves, famously an accomplished chess player, a game whose stability derives from the fact that it only has three variables: the two players participating and which one begins.
In comparison, our planning system currently resembles more a game of Monopoly, driven by the randomness of dice throws, which card you pick out from the Chance pack, and how happy Uncle Greg is with the Christmas present you gave him. The success of a project can rely on a myriad of factors from the personalities of council officers, the reaction of statutory consultees like fire services and environmental bodies, whether the application is close to an election which may make committee members nervous, and whether objectors have the resources to launch a legal challenge. This uncertainty can hold up even the most basic project by months if not years, leading to added costs and less certainty.
The UK’s discretionary planning system is also increasingly an outlier, with most comparable countries instead opting for a zoning system, where projects are approved more by the letter and less by the interpretation of existing rules. If a housing project is promoted in an area designated for housing, it has to fulfil a set of requirements and is then good to go.
In response to this, the Government’s actions seem to attempt to create something closer to a zoning system, particularly in places where the argument for new homes is strongest; they are introducing planning passports for brownfield sites, releasing ‘grey belt’ land under ‘golden rules’ of development, reducing the extent to which judicial review can hold back housing projects, and increasing the amount of delegation to officers from planning committees.
This is all good as far as certainty is concerned. Fewer vetos within the planning system will create greater stability and expectation of a return on investment for people investing money into new housing. At the very least, this will mean that new homes get built faster. An optimistic take would also say that if investors are surer of their returns they will be more able to set aside money for infrastructure investment around new homes, and providing affordable and social housing alongside homes for private sale.
But, as encouraging as these steps are, it is uncertain how many new homes they will deliver in the long-term, with planning departments still under-resourced, developers weighed down with new environmental and quality standards, and delivery in urban areas hampered with significant viability challenges.
While Rachel Reeves may have claimed a few victories in the war on uncertainty, a few major campaigns await.
A final, implementable version of the Future Homes Standard is needed, so that developers have a clear idea of the environmental standard for new homes and adapt accordingly.
Work needs to be done to smooth the operations of the Building Safety Regulator, which is still rejecting 86% of Gateway 2 applications (at building control stage). An active approach needs to be taken to ensure that the BSR provides clear guidelines, advice and feedback, and to resource them to provide swift and clear verdicts.
And considerable work needs to be done around viability, so that developers and local authorities have a clear understanding of what can be delivered on individual urban sites, how much social housing can be provided from day one, and how long projects will take.
All of this is even before considering more major questions around housing. How can the myriad of documents developers need to submit be simplified? How can local authority and housing association development capacity be increased to deliver the social homes we sorely need? And what work is needed to challenge our existing model of speculative development, to modernise construction practices, and to encourage smaller sites and diversity in the housebuilding sector?
While the economic winds may be challenging for the Government, housing is its one place where it is forging a strong path. Builders are projecting an increase of new homes, including of social and affordable housing, and the industry as a whole is fully behind Labour’s plans.
But, in order to turn this mood music into a plan for 1.5 million homes, the Government needs to grasp the nettle of all causes of uncertainty, and work to create a stable environment for new homes.