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Lest we forget the role of demand in housing affordability

For a significant number of young and low-income people housing affordability is getting worse. Housing affordability, or the lack thereof, is a concept widely understood by those living in the United Kingdom. Or is it?

On 8th July 2020, a ground-breaking new book was published by Bristol University Press. ‘Understanding Affordability: The Economics of Housing Markets’, by Professor Geoffrey Meen (Reading University) and Professor Christine Whitehead (LSE). The book sets out to unpick the complex forces exacerbating the endemic unaffordability of UK Housing. Thankfully, it offers insight and recommendations to improve our country’s dire situation.

Using ‘price-to-earning’ ratios and ‘housing expenditure’ indicators are not the right approach

When discussing housing affordability we often use ‘price-to-earnings’ ratios. Although questions remain about whether this metric is even at all suitable. This is because affordable ‘for whom’ is a question consisting of several interrelated elements, which beyond price should include physical adequacy and overcrowding.  

Some argue that using such metrics will not produce any significant improvement in affordability. This is primarily because social norms and demand-side behaviours we find play a crucial role in price determination. We must recognise demand remains a key factor in determining housing affordability.

Meen and Whitehead argue that looking at expenditure indicators alone can be highly misleading. Affordability concepts have their roots in 19th century studies of household budgets. For example, at the turn of the century the USA used the 25 per cent rule of thumb for affordability. This was based on one week’s pay for one week’s rent. Rules like this have informed both mortgage lending and housing policy alike.

More sophisticated approaches using the ‘Lorenz Curve’ tell us more about affordability

The book claims that more complex approaches recommended in academic literature have often been overlooked. This is particularly prevalent in housing policy arena and contemporary political discourse.

“We all know that this country does not have enough homes… the median house price in England is eight times higher than median gross annual earnings; in London, it is 12.3 times higher”

Minister for Housing, Christopher Pincher MP – March 2020

Source: Hansard

Price-to-earnings ratios sadly provide no information on the distribution of outcomes across household types and income levels. The authors are critical of how such flawed basic measures make it into planning policies. For this reason they say it is “worrying that it is still widely used”. Housing expenditure indicators such as rents and mortgage payments relative to incomes are also heavily criticised.

Ratios for example cannot distinguish between households with different income levels adequately. Are these metrics providing us with useful information to make meaningful policy recommendations? They suggest not. It is the distribution of incomes and wealth relative to the distribution of house prices that determines who can afford what. Not metrics that make use of averages such as the price-to-earnings ratio.

Research on affordability undertaken in the first chapter estimated affordability for First Time Buyers (FTBs). In it the authors based their research on variations of a ‘Lorenz Curve’. This approach uses a graphical distribution of the equality of affordability, which  easily shows what proportion of FTBs can afford what proportion of housing stock. A quick look on Hansard results in not a single reference to such terminology in the past 10 years.

Measures of inequality still require closer attention despite painting a clearer picture

Research in the book suggests the use of a Gini coefficient to account for regional inequality. This is an index that measures inequality created by Italian statistician Corrado Gini. We can compare how distribution of income in a society compares with another if everyone earned the same amount. A Gini coefficient of zero means everybody is equal. If we measure a Gini coefficient of 1 it shows a single person earning all the income.

Despite being technically sound, using Gini coefficient’s is still criticised by some. Summer and Cobham argue that it does not adequately capture changes in the top 10% of the income distribution, nor the bottom 40%. In turn, due to the under sensitivity of the measure at the extremes, they consider the Palma ratio more suitable. For example, if the richest 10% have five times more income than that of the bottom 40% then the Palma ratio would be 5.

When undertaking a more rigorous analytical approach we find housing affordability issues persist across the country, even in the North East

The Gini coefficient in the South East is 0.70, thus displaying a high degree of inequality. In this region a household with a median income would be unable to afford to purchase a property without paying more than 30% of their income on housing costs. There are no surprises there, but it does highlight where housing affordability is most acute.

By comparison existing homeowners who wish to move, even those in the lower income ranges, could afford to move to higher value properties without paying more than 30%. Some people in this group are effectively able to make hay much easier than those without accumulated equity.

On this more complex indicator, the research shows that to afford a property in the first decile (lowest 10%) of property prices in the South East, you still would need to earn over the median income. The difference between the ‘haves’ and the ‘have nots’ is demonstrably clearer when using such methods.

Yet in the North East, where inequality is much lower considering its Gini coefficient of 0.30, there are still significant proportions of households who cannot afford to buy properties in the lowest decile. This means that after considering the full distribution of incomes, rather than just averages, affordability for FTBs is not just a problem for the South of England.

Forward thinking Local Authorities should be reflecting on these new affordability indicators to assess the distributional consequences of policy changes. A key takeaway is to recognise that housing affordability is not just a South of England phenomenon.

When determining housing policy we need to better understand demand-side factors

The book reflects international comparisons of the average annual growth in real house prices between 1970 to 2015. Over this period Germany had -0.3% growth in house prices while the UK had more than +3.5%. Yet looking at the comparison relative to wages suggests there is more than meets the eye. In this context house price growth in Germany was -1.9%, while in the UK +1.3%.

Since 1970, German housing stock growth relative to incomes has proven relatively constant, suggesting supply is less of an issue. We think this because even after factoring in incomes relative house prices were even lower. This is despite the rate of growth in housing stock remaining constant.

In the UK levels of growth in housing stock relative to incomes have fallen by around 1.5% per annum. This means wages have been outpacing growth in housing stock. From a fundamental economic standpoint, it is no wonder house price growth has been going one way. Clearly we must acknowledge that worsening affordability and rises in real prices in the UK relative to Germany are as much a result of demand-side factors, as it is a lack of supply.

The British psyche of wanting to own one’s own home may play a pivotal role in explaining why we may have had different house price growth to that found in Germany. Our willingness to spend more on housing costs as our incomes increase, perhaps to achieve social norms such as home ownership, is alluded to as an explanatory factor.

The nature of UK housing demand means prices respond quickly to growth in incomes

Low-interest rates can exacerbate housing market price volatility. But it does not explain the long-run trend of increasing price-to-earnings ratios. Historically the UK’s housing stock has grown at a slower rate than income. Professor Meen and Professor Whitehead argue that price-to-earnings ratios can only be constant over the long-run if household incomes grow at the same rate as growth in housing stock.

We must acknowledge that we have a stronger responsiveness to demand pressures in the UK, than in say Germany. Understanding this can help us deconstruct some of the price drivers behind making affordability worse. It is difficult to tackle the issue of affordability with supply alone when the demand impact from incomes is so strong. As a result the UK is prone to faster deterioration of affordability.

Understanding this is a key factors of the counterargument to Ian Mulheirn’s claim there is no housing shortage. Mulheirn’s own paper had a peer review by this book’s author, namely Professor Geoff Meen. In the peer review he explained that it is neither population nor the number of households that affects demand; rather demand needs backing by income to impact house prices.

Surprisingly, Ian’s claims still seem to be gaining traction, most recently by Stephen Bush, who has become “increasingly persuaded” by Mulheirn’s claim that supply has not contributed to the growth in price-to-earnings ratio since the 1990s.

Conventional wisdom is that rises in real house prices reflect a shortage of homes and that the current planning system plays a significant role. The book also demonstrates that increases in housing supply can improve affordability, but that changes need to be large and sustained to produce a noticeable effect. They also acknowledge that a general expansion in private supply does not necessarily filter down to those on low incomes.

The UK demand drivers see income growth translate into higher prices more readily

Fundamentally Meen and Whitehead argue that income growth (and its distribution) reflects demand, whereas housing stock reflects supply and is affected by conditions and policy in land markets. Meen and Whitehead reaffirm that in making such statements, demand must be backed up by income to influence house prices.

In the UK, the demand drivers see income growth translate into higher demand for housing services, which is more likely to translate into owner occupation. This is a sector where the quality of housing stock is generally higher than in the private rented sector.

The book does not deny the unassailable fact we need more funding for social housing. But also acknowledges the total supply of land for housing has been severely restricted. This has led to increased land values off the back of strong demand-determined increases in house price, exacerbated, of course, by easy credit. It is after all the trend which investors and developers have followed all along.

We need to re-calibrate the balance of concerns when discussing supply, demand, and characteristics of investment behaviour

Some have pointed to investor behaviour, low cost of capital, and attitudes of housing being an investment asset as causes of our problems. However, while there is no doubt these have contributed to the trends in price in recent years, research in the book demonstrates that this alone cannot account for the strong growth rate of 3.5% per annum since 1969.

We must accept that rising real house prices are not only a question of supply and investment demand but that it is also very much related to consumption demand.

To stress the point, the authors do not say that supply and investment characteristics are unimportant, rather that there has been a distortion of the balance of concerns. We cannot say it is just supply, or solely interest rates, which has led to this crisis of affordability. Thus, whenever we are framing the narrative, we must not forget to consider demand.

If we keep this in mind when looking to use more sophisticated ways of measuring affordability, while avoiding shallow rule-of-thumb metrics, we may be able to truly understand exactly who in our housing market is being failed by Government. Only then will we be able to devise policy to address it.

<strong><span class="has-inline-color has-accent-color">Chris Worrall</span></strong>
Chris Worrall

Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.

Previously Investment and Finance Manager at both Quintain and Thor Equities. Chris has expertise in developing new residential investment strategies, real estate development finance, and the investment and development of affordable housing. He writes in a personal capacity.

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Good luck to the Green Belt campaigners

Rochdale council, along with nine other councils that make up Greater Manchester, has embarked on an ambitious strategy to plan the future development needs of the whole city region. It is not without its problems and controversies, but Faisal says that is nothing to the devastating impact the Government’s Planning White Paper will have on all our local communities.

Rochdale is part of Greater Manchester, a conurbation of more than three million people. Civic leaders there are grappling with the hugely complicated problem of deciding how many new homes we need to build to meet future demand, and even more controversial, where to build them.

The fancy name of the Greater Manchester Spatial Strategy (GMSF) aims to set out our housing and industry needs for the next 20 years. Our local leaders have been debating and postponing the issue for what seems like an age. Looking that far ahead seems more akin to crystal ball gazing rather than detailed planning calculations and projections.

Debate has led to several “Save Our Greenbelt” campaigns: residents worried about the bulldozers tearing up their local countryside walks, green spaces, and beauty spots. I say good luck to them. There is nothing more worrying than the matter being left to planning officers and housing developers carving up Greater Manchester’s planning map.

Who else will speak up for our precious green belt but those who enjoy and value it? Tens of thousands have made their views known through public consultations – and we are to have yet another round starting this Autumn.

But there is one thing that should worry every single resident of Greater Manchester, never mind every environmental campaigner, that will have a huge impact on future planning decisions for years to come.

Government recently published a planning white paper which proposes reform of the planning system in England. The proposals will see councils lose control of important planning decisions. 

The Bill says it would “streamline” the planning process, cut red tape and make it easier to get new homes for local communities built. But, in fact, it would lead to developments going ahead without any proper public scrutiny and against the wishes of local people.

The Government’s plans mean that areas would be earmarked for development and then there would be no need for planning permission to be granted by local councils. What is worse, it will be using algorithms to decide how many and where up to 300,000 new homes a year will be built.  We all know how successful these computer-led diktats were in setting A-level results.

It will result in little control over developments, overriding local knowledge and circumstances, with local people having no say over developments. The Government has also stated that developments of 50 homes or less would not have to provide any affordable housing. I have been a local Councillor for a long time, and I do not ever recall ever reading a Government report which has annoyed and terrified me more than this one.

Local communities deserve the power to run its own planning system. Planning committees should not be threatened with having its powers taken away. There has been a huge amount of criticism of these draconian proposals all over the country, but the Government is not listening. They want to help their developer friends by sweeping away the local restrictions that keep them under some control.

No parcel of land will be safe from the threat of development, and with fewer affordable homes, many will be too expensive for local families. The Housing Minister Christopher Pincher publicly confirmed that he is looking to loosen restrictions in planning law, to make it easier to push through housing schemes.

And the Prime Minister meanwhile has stated he will be bringing forward the ‘most radical reforms of our planning system since the end of the Second World War. The planning system already favours the developers over communities, and any further loosening of planning laws would be a disaster for towns and cities right across the country.

At the root of all this is local democracy. Local communities and their elected councillors should have the ability to make their own decisions based on local needs. What happens in our local planning committees is extremely important and should be vigorously defended. I will be continuing to campaign for greater local control and I hope our Green Belt campaigners will be doing the same.

People must have the opportunity to make their views known loud and clear, however uncomfortable it is for politicians, whether in the town hall or Whitehall. You have the ultimate power to turn us out. You cannot do that with faceless civil servants and planning inspectors who will be running the show in the future. Not to mention their dreaded computer programmes.

<strong><span class="has-inline-color has-accent-color">Faisal Rana</span></strong>
Faisal Rana

Faisal Rana is a local councillor in Rochdale and sits on the planning committee.

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Labour’s Planning Commission and the Planning White Paper Compared

Similar analysis different outcomes

During the latter stages of the previous government a Planning White Paper was expected almost on a daily basis. Like many other policy initiatives it fell foul of the Brexit stranglehold on parliament. It was partly to ensure that Labour had a response to the long expected White Paper that it launched a Planning Commission in September 2018 to develop a new suite of planning policies in advance of a General Election then expected to be in 2022.

Labour’s planning proposals made it into the 2019 manifesto but as we know Labour did not make it to government. Nevertheless, the Planning Commission’s suggested reforms sit as a powerful antidote to the view of planning and what it can achieve set out in the Government’s White Paper. Having said that the similarity in some of the analysis of what needs to change is striking.

Labour’s recommendations for greater use of digitisation in the planning system to improve accessibility and engagement with planning and the need for more investment in skills and training for planners are mentioned in the White Paper proposals.

Likewise, the need for reform of the Community Infrastructure Levy and putting in place a nationally agreed method of assessing housing need also are also reflected in both documents. Similarly, there is cross-party agreement that the design and quality of what is built need to be improved. There is also widespread agreement that local plan making needs to be simplified, speeded up and subject to statutory time limits.

However, what is massively different is the policy agenda that is envisioned by Labour and the Conservatives to achieve long lasting change to our neighbourhoods, regions and nation, and the values that need to underpin our planning system to achieve development fit for the 21st century and beyond.

Since 2010 the blame for the government’s inability to deliver on housing targets including those for affordable housing was laid at the door of planning even though the numbers of new houses approved through the planning system but not actually built rose year on year.

Alongside this, constant deregulation of planning, greater use of permitted development, sanctions against planning authorities for having too many appeals, contracted out planning services and too many local authorities without local plans in place led to an increasingly undemocratised, technically focused planning system that was increasingly at the mercy of speculators and where plan making and the visionary underpinnings of planning took a back seat.

Communities for the most part felt that planning was done to them and their views on planning were increasingly ignored or bypassed. Place making if it happened at all was the result of developers, planners and residents working together, despite the constraints of the system, to build or rebuild better communities.

And it was the need to build and rebuild strong and sustainable communities that was the starting point for Labour’s Planning Commission. We wanted place making to be at the heart of a planning system that would be value based to tackle inequality and address climate change.

The Labour Commission included representatives from key planning agencies and stakeholder groups and meetings of the Commission were supplemented by regional events with residents, developers and local authorities. The strong evidence base the Commission established documented the democratic deficit and technocratic complexity at the heart England’s planning system and led to proposals for radical change most notably in the need to build good quality homes with supporting infrastructure in genuinely sustainable neighbourhoods.

Thus, Labour’s proposals include recommendations for a new system of building standards to address quality, climate change and safety issues, and suggest putting in place new principles and guidance as well as national standards to achieve high quality design. It argues for a review of permitted development with planning permission being reinstated in most cases.

Labour wanted to see the relationship between what happens in local communities, their wider regions and the country as a whole reflected in a connected planning system with community, local, regional and national planning tiers so that infrastructure, jobs, local services and leisure and cultural facilities could be planned at the right spatial level. This would not only enable people to be properly housed it would facilitate people travelling safely to work with a transformation in greater use of cycles and public transport.

All neighbourhoods would be planned to have a high quality of life with the services they need to promote well-being on their doorstep and with the heritage of the built environment and natural environment protected and where possible enhanced. We wanted to achieve this by giving residents the ability to plan their communities alongside planning professionals who would give advice and would liaise between levels of the planning system.

That the Government’s White Paper says nothing about how to achieve well-being or equity through the planning system is perhaps not a surprise. What is a surprise is how little is said about land availability except for arguing that greater certainty needs to be given by the planning system to enable developers to come forward.

In contrast Labour suggested a radical approach to bringing more land forward by proposing setting up Public Development Corporations with the power to purchase, sell, and develop land to assist with the making and remaking of communities, alongside greater use of a simplified CPO system if necessary.

Labour also proposed introducing a land value capture system that would capture uplift for current and future communities. And Labour sees the  greenbelt not as a land set in aspic but land to be used as part of climate change mitigation and that can help reduce health inequalities.

The Government has argued for change too but their proposals for a new zonal system do little to match the rhetoric expressed in much of the White Paper and will depend on the type of zonal system adopted as well as the details of the plan that goes alongside it. It could result in a development straight jacket without measures to support delivery and the high quality development the Government says it wants to see. Likewise the proposal to support permitted development that is replicable could reduce quality rather than improving it.

Both of these proposals also run the risk of further denuding democratic oversight of, and involvement in, planning. There is no acknowledgement in the White Paper apart from keeping some sort of neighbourhood planning of the need to have citizens actively engaged in planning rather that simply being consulted (and then often ignored) about it.

Labour sought to address the need for active participation by involving  residents in the  first tier of planning – producing their community plan and making it the building block of the whole planning system.

The conclusion of TCPA is that the White Paper does not provide a single new right for community participation or a single new opportunity for democratic involvement in planning. For that reason alone the government should be asked to think again or come back with much more detail on how they will actually achieve the good quality place-making they say they want but cannot deliver through the proposals outlined so far.

<strong><span class="has-inline-color has-accent-color">Roberta Blackman-Woods</span></strong>
Roberta Blackman-Woods

Roberta Blackman-Woods is the former MP for the City of Durham (2005 to 2019) and was the Shadow Minister for Planning until November 2019.

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Socialist housing policies for a recovering Britain

Labour Housing Group is determined to lead the renewed debate about housing policies that can take us towards recovery. Our online housing conference this Saturday October 3rd (10am-1pm) aims to air the many issues that have come to the fore in the last 8 months as never before, and to make sure that housing comes to and stays at the top of the political agenda when we emerge from the pandemic. As our piece in Labour List yesterday highlights, now is the time to build socialist housing policies for a recovering Britain.

Making a reality of a decent home for all

We were all been concerned about people sleeping on the streets in lockdown, and pleased to see some recognition coming from the Government that this could not continue. Yet despite the short term arrangements to help street homeless people showing what can be done when there is a strategy backed by finance and determination, as in the Everyone In policy, we are now worrying again about homelessness: now that the eviction moratorium has ended, the prediction of large numbers of evictions (legal and illegal too) has to be addressed. The fundamental debate about tenants’ rights must be a key part of our plan for recovery and, in time, for a socialist Britain. Our speakers will look at the need for enforcement as well as how to make private rented homes fit to live in and managed well.

We also need to think longer term about the housing policies that are essential to make an economic and social recovery possible.  Our session on design, quality and sustainability, and our keynote speech from the Shadow Secretary of State for Housing, will focus our minds on how to develop green homes, as economically as possible. We will also look at housing policies to suit all parts of the country.

Current Tory disasters, in progress or planned, provide easy clues about how we could do better.  The disaster of Grenfell three years ago has led to a new crisis for social landlords needing to replace dangerous cladding, and a new generation of leaseholders facing penury. We should work closely with newly emerging leaseholder groups to develop new policies based on ending this feudal system. Speakers will show how the Planning White Paper, another catastrophe in the making, would reduce public involvement in planning to very low levels whilst running roughshod through systems for assessing where new housing is needed. A Labour alternative would be attractive to people all round the country.

Racial disparities and inequalities in housing provision have impacted on BAME communities, but this is not focused often enough on within the movement. Councillors and activists from around the country will draw out what needs to change here.

Labour councils are working hard to build council homes in many areas. Sharing ideas about how this can be done in today’s climate, and working towards our aim of meeting housing needs through public provision once more, is a key part of any socialist housing conversation.

Clearly, how we fund the building, refurbishment, and greening of new – private and council homes – is an essential element of Labour policy. Anneliese Dodds, Labour’s Shadow Chancellor will be interviewed by Steve Hilditch, one of the founders of Labour Housing Group, who will be drawing out Anneliese’s thoughts on how a future Labour government could improve the operation of the housing market, how we should prioritise public investment in new and greener homes, and whether we can switch spending from ‘benefits to bricks’.

Most of the morning will be spent in workshops, with councillors, front bench and back bench MPs, academics, campaigners, and lawyers leading the way.

The conference has been organised in partnership with Labour Campaign for Council Housing, the SHOUT campaign for social housing, and the National Leasehold Campaign, as well as our front bench housing team.

We hope to welcome you to it too.

You can see more about the conference here and register here.
This event has now taken place.
Catch up below:
<span class="has-inline-color has-accent-color"><strong>Sheila Spencer</strong></span>
Sheila Spencer

Sheila has been Secretary of the Labour Housing Group (LHG) since 2018, having re-joined LHG Executive after a gap of many years.

She believes that housing is a critical issue across the country and that Labour has great housing policies – but many people, including many members, do not yet know how Labour intends to solve the current housing crisis when next in power.

Sheila wants to see Labour in the forefront of people’s minds when they consider what needs to change. She has worked all her life in housing – in the areas of homelessness, supported housing and housing need. Sheila was a city councillor in Newcastle and is now retired.

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Levelling-up the land market under Labour

On the 6th August 2020 the Conservative Government announced a change to the standard method for calculating the housing need requirement. The debate had up until this point shifted from the ‘numbers’ question. Towards the ‘how’ and ‘where’. Now the proposed new method seeks to achieve a ‘fair share’ under Boris Johnson’s ‘levelling-up’ agenda. But is this the right approach?

The Government’s housing targets have come under fire for contradicting its ‘levelling-up’ agenda.

Recent claims by the Local Government Association (LGA) argue the proposed new standard method would seriously jeopardise the Government’s ‘levelling -up’ agenda.

While the Campaign to Protect Rural England (CPRE) said “the last thing we need is another ‘mutant algorithm’ – this time deciding where development takes place”. We have seen from the exams fiasco the damage that can be caused by erroneous calculations.

Backlash has also come from within the Conservatives. Neil O’Brien, MP for Harborough (Leicestershire), claims “it would be quite difficult to explain to Conservative voters why they should take more housing in their areas to allow large Labour-run cities nearby to continue to stagnate rather than regenerate”. Neil had written for Conservative Home. He argued the new formula would “level down our cities, not level up”. Yet we know large parts of existing suburbs in England and Wales are providing almost no new homes. Tory shires staying untouched? Evidently delusional.

Analysis by the LGA found under the new formula lower growth in housing stock would be expected in Northern regions. London on the other hand would see a 161% rise in homes built. An increase of 57% is expected in the South East. 39% in the South West. For those in the North East proposed targets are 28% lower. While 8% lower in the North West.

On average the house price-to-earnings ratio across the UK stands at 10.7. However, price-to-earnings ratios are still below their previous 2007 peaks in the North East, North West, Yorkshire and Humber, and Wales. In London, the price-to-earnings ratio has worsened by over 50% since 2008. Similarly, the South East, South West, East, and the East and West Midlands have all surpassed their Pre-Covid19 crisis peak. Surely adopting this approach makes sense for these targets to be reduced. Or does it?

On new projections the housing targets are well below what we really need, and fall short in basic economic terms.

On the new proposed standard method it is estimated to be 337,000 – so an annual increase of 1.4%. Currently the Tory housebuilding target of 300,000 accounts for an annual increase of 1.2%. Compared with the two decades between 1931 and 1951 housing stock grew on average at 2.85% per year.

Labour should be attacking the Tories over their lack of ambition. To achieve the levelling-up agenda we need greater supply responsiveness to house prices and housing stock to grow faster than incomes. Only then will we achieve a less volatile housing market. But how could we achieve this?

The Bank of England targets inflation at 2%. As at April 2019 the total number of dwellings was 24.4 million. In effect to ensure growth in housing stock exceeds growth in full-time earnings. Thus, we should be setting the national target closer to 490,000. Somewhat 45% higher than the Tories current level. If we achieved the growth in housing stock at rates seen between 1931 and 1951 this figure would be closer to 696,000.

The average house price-to-income ratio now stands at a whopping 18 times the average salary in London. In London housing supply targets have either been based on land capacity. As seen in the recent Draft London Plan. Or in times gone (and still to date) by projections based on ‘nonsense demographics’.

It makes sense for the Government to require those areas that are seeing the most demand. And demonstrably so in areas that have increasingly high price-to-earnings ratios. Even the North West, North East, and Wales have seen increases in price-to-earnings ratios from their Pre-Covid19 crisis trough. Housing supply should remain an important policy concern for all when considering the ‘levelling-up’ agenda.

It is no surprise why house prices have rocketed in London, the growth in housing stock has not exceeded incomes.

For the period 2009 to 2019 housing in London stock grew by merely 8.6% in aggregate (0.8% p.a.). While full-time earnings grew at 16.9% (1.6%). Almost double the rate. A ten-year target set at the anticipated growth rate in wages, using the inflation rate as a proxy, would see London housing stock need to grow by 2% p.a. or 21.9% in aggregate.

By the end of 2019 London the total number of dwellings across all the tenures reached 3.6 million. London would need 786,700 net additional stock delivered over the following decade. Sadiq Khan would need to increase his original annual target from 65,000 homes per year up to 78,700. This would see London take its fair share of the levelling-up agenda.

London has not seen such levels built, largely by the private sector may I add, since 1935. This is a time that pre-dates the permanent protection of London’s antigrowth local land regulation, namely the ‘Green Belt’. And the tortuous Town and Country Planning Act, which has poisoned London’s well of supply ever since.

Figure 1: New build homes in Greater London, 1871 to 2018
Source: GLA, Housing in London 2019

Sadiq had his own target reduced by the naysayers. An independent review said his small-site target was unachievable. This reduced the original target of 65,000 to 52,000. Still more than Boris Johnson’s 41,882. Yet considerably lower than the proposed new standard method of 93,532. A figure London has never built in its history.

Targets set under the Housing Delivery Test (HDT) over the three years between 2016 to 2019 required one home for every 80 residents on average. Or 38,400 annually. Output would need to increase by 200% to increase housing stock at the same pace as income to hit a target of 78,700. Or 243% to hit the levels set out using the proposed new standard method.

The race to the bottom of build cost and quality is a symptom of a broken land market.

The endemic cladding scandal has left over 3 million in worthless flats. Economic incentives of landowners under the current planning system have led to economic growth and value from cost cutting measures absorbed by land values. The result? A race to the bottom on build quality to pay the highest price.

Our land market has been so constrained that the economic interests driven by the current planning system has seen build quality deteriorate. Literally to the point where basic fire safety has too often become hard to achieve.

Housing targets under the Tories remain a tabula rasa, only Labour has the ambition to level up our nation.

Levelling-up the land market requires planning reform and appropriate housing targets. And densifying cities. Only then will we re-balance the see-saw between land values and build quality. Liberal socialist John Rawls has advocated a move from a broken system of welfare state capitalism, to a property-owning democracy. Where everyone can participate in the productivity gains of a nation.

If every British citizen had a stake in a sizeable amount of property, access to capital and the productive decisions of society, then we can put power in the hands of the many and not the few. In China, the homeownership rate is as high as 90%. We should try to emulate this ambition. And while no silver bullet, revolutionary rent-to-buy schemes such as Rentplus could provide one such solution.

The levelling-up agenda will require a significant amount of homes at social rent levels for those on low-incomes. Particularly in big cities. Labour needs to ensure housing targets are driven on the premise we need to make homes more affordable. This can only be achieved by committing to more supply. And a huge, huge amount of it.

<strong><span class="has-inline-color has-accent-color">Chris Worrall</span></strong>
Chris Worrall

Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.

Previously Investment and Finance Manager at both Quintain and Thor Equities. Chris has expertise in developing new residential investment strategies, real estate development finance, and the investment and development of affordable housing. He writes in a personal capacity.

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We can’t end homelessness without sweeping legal reform

The four nations of the UK have some of the most generous legal entitlements for people facing homelessness. The legacy of Cathy Come Home is the Housing (Homeless Persons) Act of 1977. Since then more than four million households have been helped into alternative housing because they qualify for this almost unique addition to a western welfare state.

Over the years, this settlement has been changed and expanded. Devolved government in Scotland and Wales has charged progress with the former abolishing the idea of non-priority homelessness between 2003 and 2012, and the latter legislating for homelessness prevention in 2014. The landmark Homelessness Reduction Act (2017) introduced prevention formally into law in a similar way in England.

This seemingly progressive settlement hides a multitude of sins. Under the surface it is largely a battleground between homeless ‘applicants’, and local councils who are charged with using the legalistic framework as a rationing tool for scarce housing stock and social support.

Should you find yourself homeless in 21st century Britain here is your challenge:

Are you someone with the right immigration status? Living and working in the UK for years, paying taxes for decades even, is not a guarantee, especially if the state tells you that you have ‘no recourse to public funds’.

Are you at fault for your own homelessness? This bizarre concept of ‘intentionality’ exists to stop the mythical scrounging masses from claiming falsely, but if for example you have rent arears, as thousands do through no fault of their own, then bad luck.

Are you from the local council area you are applying to? Do you have uninterrupted proof over a period of years? If not, you’re out.

Are you in one of the stated ‘priority need’ groups? This one has been seen off in Scotland, but everywhere else you have to have dependent children or qualify under one of the other limited descriptions. If your situation isn’t on the list, then your last shot at this one is appealing to the council to deem you in some way ‘vulnerable’.

Let’s say you haven’t fallen foul of one or more of these – and here is the real kicker – what if the council has nowhere to offer you anyway?!

The system is quixotic. Cash and housing strapped councils are spending their time fighting off legal challenges that their decisions were unlawful. People are sent hundreds of miles to live in squalor because local social housing has been converted or sold, or because the private rental market is too expensive. Private consultants scurry about the system, offering new innovations in gatekeeping it from applicants to grateful housing officers.

The pandemic has brought this murky system into the light. When Louise Casey sent her now famous ‘Everyone In’ email to English councils at the end of March, she basically told them to forget the last 43 years of litigious argument. The instruction on a Wednesday evening to get everyone off the street by the weekend was an instruction to do the right thing and ignore the rules. And in Scotland and Wales, the pandemic responses went even further, with councils given more generous funding settlements and directives from ministers about the public health emergency.

These efforts have been the exception that proves an important rule – that if you offer legal routes out of homelessness for some, you make it inevitable for others.  

For a few weeks the numbers on the street went dramatically down, and gave the public a glimpse of a future without rough sleeping. Politicians have seen that decisive intervention can have dramatic and positive results. And as an unnamed Conservative politician said in the Times last week: ‘My worry is that we’ve shown it is possible to get everyone off the streets during the Covid crisis so if homelessness goes up now people will know it’s as a consequence of government’s actions.’

So, what now? How should we build on the extraordinary efforts of the last six months? And how do we apply the short-term successes of reductions in rough sleeping to the wider homelessness response?

Our first principle should be to move from incomplete legal entitlements, to a universal model of guarantee that anyone facing homelessness is helped to avoid or quickly resolve it. The current model is cruel in its legally sanctioned denial of help to thousands every year. But it also labels people. You are ‘the homeless’, you should be grateful for what you get, and if you get nothing, soon the labels keep coming: single homeless, entrenched, complex, service-resistant, etc.

Let’s abolish the legal tests that create and sustain homelessness.

Second, the Everyone In initiative was a fleeting glimpse of assertive state action on homelessness in England. Louise Casey has come and now gone again, officially moving on in late July, leaving the UK government rudderless once again. Devolving the problem to the myriad responses of each local council is fundamentally flawed and we know all too well what that leads to – with every measure of homelessness in England going up in the last ‘decade of disaster’, under the cloak of decentralised but declining resources.

Governments in Scotland and Wales have recently begun an overhaul of their homelessness systems. This rediscovery of assertiveness and vision is desperately needed in England too, and a blueprint is written in the Crisis plan for ending homelessness. There are solutions ready and waiting, from scaling up Housing First, to the case for social housing at scale, PRS reform, etc. And the good news is that financially these reforms easily pay for themselves over a 10-year period.

The current government target of ending rough sleeping by the end of the parliament is the first of its kind. Rough sleeping is of course the most damaging for of homelessness. But in order to reach this goal, we need a consensus across all political parties on wider basis.

Since 1977 the legal system has designed in homelessness. This must be reversed, and replaced with a universal guarantee of housing support, and then backed by an assertive government strategy to make homelessness in all its guises a thing of the past.

<strong><span class="has-inline-color has-accent-color">Matthew Downie</span></strong>
Matthew Downie

Director of Policy and External Affairs, Crisis. Matt, who joined Crisis in 2014, played a leading role in the introduction of the Homelessness Reduction Act – one of the biggest reforms to homelessness legislation in England in a generation – as well as the publication of ‘Everybody In: How to end homelessness in Great Britain’, a landmark body of work showing how homelessness can be ended for good. He was awarded an MBE for his services to tackling homelessness in June 2019.

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Working from home or living at work?

On March 23rd, 2020 UK was formally placed into lockdown. Those who were not key workers were asked to not work or to work from home. This meant the decades-old tradition of working professionals putting on suits and commuting into work to go into an office and sit at a desk for several hours a day ended. Abruptly.

At first, some rejoiced at this news. We all learned about the intricacies between Zoom and Microsoft Teams and most of us became pop-quiz experts. The concept of moving from your home to go miles away to do the same thing you could do from your couch seemed insane. Most of us also found that we work better in pyjamas and are never late when our bed is also our office. Long live the “Boffice” we cried!

However, as time went on, difficulties emerged for the working poor. Those who could leave their cramped city flat and run away to a big house in the country did. Oxford University found that during lockdown over 250,000 people left London to go to live elsewhere, many whom were under 30. Those who could upgrade their Wi-Fi did. Those who could create an “office” like environment with comfy chairs, a working desk, and several monitors, did. Those who could not – struggled.

Many young people realised that no garden, no living room, and several people using the same kitchen and bathroom were acceptable before Covid-19, but not during lockdown. Landlords profiteering from turning that pesky living room into a third, fourth or even fifth bedroom in a House of Multiple Occupancy were making homes unliveable in lockdown. After a few weeks – the “Boffice” was not as great as we thought it was. People were not working from home. They were living at work.

The property developer Pocket Living found that 37% of those in London who were living in shared accommodation, were living and working in their bedrooms during the lockdown. Many reported that this was affecting their mental and physical health.

Participants reported issues like “noise, lack of work surfaces, and privacy” that severely affected their ability to work. Of those asked, 46% of participants reported not having a suitable place to work. Now, after the first lockdown and as a result of these changes, the Independent reported that 70% of young people are feeling more anxious about the future as a result of the Covid-19 pandemic.

This year might be the first time that young people move out of London and other city centres on masse – or do not actually move there in the first place. At the beginning of the year, it was predicted that the number of young people living in their own private rented sector (PRS) was going to rise by over 1.3 million. Now, I would not be so sure.

But fear not landlords – help is at hand. A landlord’s best bet lies in effectively extending regulation of the minimum shared space required for houses in multiple occupation (HMO). Regulation should enhance the need for shared living spaces. Young renters need to have space in order to live and work in separate and private areas. Ensuring shared living spaces are available would provide the stability and space young people need to be efficient and productive at work.

By creating living spaces that are living and working friendly – landlords will ensure that they can keep their tenants in good mental and emotional health, and ensure their properties are occupied. It is not a huge amount of effort – but it will be well received by tenants thrice over. As young people find themselves in a new working environments and central offices become a thing of the past – landlords should act now to ensure a good relationship with their tenants for the future and the “New Normal”.

Additionally, for those unlucky enough to be on the ever-growing list of industries impacted by Covid-19 and find themselves now on furlough or in a tough job market, landlords should allow late or partial rent payments. The stress of renting as a young person is high enough, and a little flexibility from landlords would go a long way.

The “New Normal” does not have to be all bad for young renters. Instead – tenants and landlords must act together to ensure better working and living conditions. There should always be a difference between working from home and living at work and with a little communication and adjustment, better housing is possible.

<strong><span class="has-inline-color has-accent-color">Cathleen Clarke</span></strong>
Cathleen Clarke

Cathleen Clarke is a youth campaigner and Labour Party activist. She is currently running for Chair of Young Labour and works for a migrants’ rights charity.

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Shared ownership: a scheme beyond repair?

Shared ownership has its benefits, but it is not the panacea for the country’s housing crisis.  

Home ownership is becoming an ever-distant dream. Nowhere is this seen more acutely than in London where exorbitant house prices mean exorbitant private rents are often considered the only viable option. So those with the opportunity to get on the property ladder through the somewhat elusive shared ownership route are the lucky ones, right?

Well let us explore that further.

You can get a shared ownership home through a housing association. You buy a share of your home (between 25% – soon to be lowered to 10% – and 75%) and pay rent to the housing association on the rest. 

Northern Ireland and Scotland set their own criteria, but elsewhere in the UK you can buy a home under this scheme if your household earns £80,000 a year or less (capped at £90,000 in London) and are either a first-time buyer, someone who used to own a home but can’t afford to buy one now, or are an existing shared owner. 

It is true, there certainly are benefits to this arrangement. Shared owners have more stability than those renting. They are not so much at the mercy of a landlord who could evict them almost immediately under section 60. Greater permanency is met with greater control. Shared owners can paint a wall or put up a shelf without first seeking permission from a reluctant landlord. 

Then there is the cost. Shared ownership can form a happy medium for those wishing to leave the private rented sector but who cannot yet meet the stratospheric costs of full ownership. This is again particularly true in London where the average house price is more than double that of the national average.  

But just because this can be the more affordable option, it does not automatically mean it’s affordable by anyone’s definition. Which is where we begin to uncover the flaws of this scheme. 

In London, shared ownership is increasingly expensive. An investigation by the London Assembly Housing Committee found that the incomes of new shared owners, and the deposits they must put down to buy their share, are generally higher than those of the average earner. 

Affordability is called further into question when you compare what a share in a London property will get you with what you could afford in a part of the country with lower house prices. For example, a 30% share on a two-bed flat in Wandsworth could get you full ownership of a four-bed semi-detached in Wigan. 

The purse strings must be loosened again when service chargers are factored in. Service charge estimates given to prospective shared owners often increase following completion. Residents can be presented with service charge statements a chartered accountant would have trouble understanding.

Any credit can soon turn out to be a false credit because the managing company has forgotten to charge for building insurance and service charge bills can increase each year because the faulty lift requires additional maintenance. 

This is all compounded by the expense shared owners must take on to extend their lease, problems with poor maintenance of properties, and the difficulties in staircasing to full ownership. Moreover, residents continually report that Housing Associations are unresponsive to their queries and concerns. 

With so many pitfalls, we might ask why shared ownership is considered the preferred option for many people. There will always be the lure of home ownership, but there is more to it than that. 

Most shared owners are first-time buyers. Many have no experience of buying property, nor the financial and administrative burdens of shared ownership. The Assembly’s Housing Committee found that many reported not knowing what exactly they were getting into. 

For those who have already undergone that process, some say the model still is not working for them, that they had not been given enough information when buying and that they’re now lumbered with spiralling costs.  

So, what is to be done? Well, the positive news is that the scheme is not beyond repair. With the right political will, there are actions we can take today to make it work for those already in shared ownership, as well as prospective shared owners. 

A requirement on housing associations to report on service charges and maintenance costs for every block of shared ownership homes is an essential first step, because the biggest hindrances to making these fairer are the lack of transparency and scrutiny. 

This should be met with a requirement on housing associations to set out for prospective buyers, in one clear document, an accurate description of what shared ownership entails – and costs – in reality. Clear guidance should also be provided on routes for redress for those who feel they do not receive a decent enough service for the amount they fork out in service charges.  

To understand the value of shared ownership in helping first-time buyers successfully get a foot on – and then move up – the property ladder, housing associations should be required to publish annually the types of tenure those that sell their shared ownership property are moving into, alongside staircasing sales.

Given the call upon affordable housing resource that shared ownership necessitates, this is the very least we should expect from those organisations who benefit. And on a similar note, the Government should reverse their decision to make it easier for shared ownership properties to be sold on the open market and work instead to ensure they remain affordable housing stock. 

Labour’s role is, and always will be, to level the playing field. Shared ownership is a good place to start to explore how that might look under a future Labour government. Overhauling the scheme to make it more accessible to the many is one option.

But of course, there is always the alternative of moving away from this type of model in favour of more affordable housing options accessible to those on lower and middle incomes.  

Sadiq Khan’s action in delivering record levels of affordable housing, driving up council house building in the capital and implementing the London Living Rent are shining examples of what can be achieved when Labour is at the helm. Now, just imagine what could be achieved under a Labour Government. 

<strong><span class="has-inline-color has-accent-color">Len Duvall</span></strong>
Len Duvall

Len Duvall is the London Assembly Member for Greenwich and Lewisham and has been Leader of the London Assembly Labour Group since 2004.

Before joining the London Assembly, Len was Leader of Greenwich Council for 8 years. On the Assembly, Len is Chair of the GLA Oversight Committee, Deputy Chair of the Budget and Performance Committee, and a Member of the Police and Crime Committee and the EU Exit Working Group.

Len leads on the London Assembly’s Campaign for a Domestic Abusers’ Register. He has been in elected office since 1990. 

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Shared ownership – affordable housing or overpriced?

With property prices for first time buyers increasing 69% over the past 10 years[1] and an average deposit of £47,059 needed it is no surprise that shared ownership is thought to be a good option for first time buyers.

The part-rent part-buy properties are mainly developed by housing associations as “low cost home ownership” and so can qualify as the affordable housing needed to secure planning for new developments.

But does it really represent good value for money for the purchaser and the wider public?

There is a lot to love in shared ownership if you are fed up with paying rent to a buy to let landlord.  You don’t have to have keep paying out management fees, deposits and all the other costs associated with renting. You also benefit from rising house prices.  

With shared ownership only have to save for a 5% the deposit on the proportion of the property value that you are buying – if you are buying 25% of a £400,000 property the minimum deposit is £5,000. If you buy in the open market you need a £40,000 deposit for a property of the same value because mortgage lenders require a 10% deposit.

The downside is that you are responsible any repairs and maintenance – your shower breaks down; you must pay the plumber. Even if you only own 25% of the property, you’re responsible for 100% of the cost of new doors to meet changing fire regulations.

It can be expensive buying additional shares in the property, especially if you repeatedly buy small shares. If you want to buy any part of the remaining portion there will be legal, valuation, stamp duty land tax and mortgage fees to pay. If house prices are rising you will be paying more for property as the cost is based on current market value, not the price you originally bought it for.

Another drawback is that most shared ownership is on leasehold flats so that on top of the rent, owners must pay service charges and ground rent. Nor can shared ownership residents exercise the “right to manage”, so you will be stuck with your managing agent even if they are useless. 

But the main problem is down to the so-called new build premium – a term used to describe the fact that most new build properties cost more than otherwise similar homes. In 2019 Zoopla found that on average a new build was £65,000 more than a similar older home in the same location. It is tempting to buy a property that has a dishwasher in the fitted kitchen, and a 10-year guarantee against major property defects. But is it worth £65,000?

All the aspirational property TV programmes focus on the “potential” in buildings – essentially buying something run down, making improvements with new kitchens and bathrooms, and creating additional value. So why is shared ownership restricted to properties which have no room for improvement, and where the main beneficiaries appear to be large scale builders who get their planning permission for large blocks through low cost home ownership and not true social, affordable housing?

The first two homes I owned were wrecks, cheaper than new builds and I was able to put in central heating, double glazing, and new kitchens over time. Just the sort of properties that are snapped up by buy to let portfolio landlords today. Why can’t subsidies be directed to people who are happy to take on a project and use local builders to make improvements rather than hand profit directly to the large-scale building developers?

In England there have been some co-operative shared ownership schemes, but these have mainly been based on a new development rather than benefit from the lower prices in the second-hand market.  A number of housing associations work with disability charities to provide adapted housing through the government-backed HOLD (housing for people with long term disabilities) scheme in England.

Qualifying people can buy any home for sale on a shared ownership basis (part-rent/part-buy) and this model works well for people who have received compensation for an accident and qualify for long term disability benefits. 

To assist people to buy their first home I think there needs to be a second-hand market option, backed by a housing association to manage the rental element and ensure the finances are in order.  We don’t have to look far for a model – based in Belfast the Co-Ownership Housing Association[2] is enabling first time buyers to part-rent and part-buy in the second-hand housing market across Northern Ireland.

Since 1978 more than 29,000 people have been assisted to buy their first home and currently 9,000 people are currently co-owners.  A 50% own/50% rent is cheaper than private renting and normally no deposit is needed. The home owner is able to choose the property they want to part-rent part-buy in the open market and, subject to valuation the housing association will buy 50% of the property and charge rent based on 2.5% of the value of the rented portion.

This will require a new way of thinking for housing associations and there will need to be some seed funding but rental incomes and purchases of additional portions of the property should make the scheme sustainable in the long term. If we want sustainable communities, we need to have a variety of tenures and affordable homes, and shared ownership can help achieve that.

<span class="has-inline-color has-accent-color"><strong>Sue Rossiter</strong></span>
Sue Rossiter

Sue Rossiter is the Chair of Bethnal Green and Bow CLP and is an expert in mortgage policy with more than 20 years experience of regulatory policy development.


[1] Halifax House Price Index September 2020

[2] www.co-ownership.org

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The ‘Planning White Paper’ and a basis for possible reform

The Government’s Planning White Paper proposes to replace the current regime of local authority determination of specific development proposals by a system of zoning.

Local Plans would define three zones: growth zone (where designated sites have “outline permission”), renewal zone (statutory presumption in favour of development being granted for the uses specified as being suitable), Protected zone (“more stringent development controls”). There is an option to combine growth and renewal areas.

For growth and renewal zones plans would “set out suitable development uses, as well as limitations on height and/or density as relevant. These could be specified for sub-areas” (eg town centres).

For protected areas, plans “would explain what is permissible by cross-reference to the National Planning Policy Framework”.

Development Management policies would be set by National Planning Policy Framework (with an option to have limited development management policies in local plans), plus local design code(s) supported by national design code. There is a national design guide and manual for streets (where there is no local design code, the national one would be applied).

How zoning works in the US

Traditional zoning involves local municipal zones for locales with zoning ordinances (ordinance is a municipal by-law).  These can be by land use and sub-categories within land use – ie different housing types ( single detached dwellings/apartments) or by density (low/medium/high).

There are a number of important variations:

a) Inclusive zoning (includes affordable housing)
b) Incentivised zoning (allows higher density development in exchange for higher local taxation)
c) Form based zoning (new urbanist approach – design based rather than directly land use/functional based)
d) Performance zoning ( based on environmental impacts)
e) PUDs (Planned Urban Development) Zoning sets parameters but individual schemes negotiated between developer and municipality

The Planning White Paper is however unclear on what form of zoning would apply in England.

Current  planning practice in England

Local plans (district/borough wide) allocate development sites  and/ or for specific uses and set both specific policies for designated sites and more general policies for non-designated ones. Local plans set policy requirements to supplement national planning policy requirements and/or facilitate their implementation locally. 

These can set density policies and housing type requirements for different sub-areas or for individual sites. Area Action Plans/ Area Supplementary planning guidance can be determined for development/ redevelopment areas. These can be supplemented by design guidance/ design code, by masterplans (for major sites) and site briefs. Local Development Orders can set specific policy requirements for areas within a local plan area.

UK Land use allocations can be considered to be a form of zoning (though the term not widely used) though not all Local Plans allocate specific land uses to sites and development can still be considered on non-allocated sites. Land use allocations may also not be strictly applied and although in theory we have a plan-led system, alternative uses may be permitted.

Local Plans however set parameters within which individual development allocations should be considered.  This system is comparable with the US PUD system which is also a two-stage system. The distinction between American system as ‘zonal’ and the English system as ‘discretionary’ is a gross over-simplification.

In England, Section 106 planning contributions (s106) can be negotiated on site by site basis in exchange for increased density and Community Infrastructure Levy can be varied by sub area (both in practice similar to US incentivised zoning system).  Affordable housing requirements set in local plan policy, which can vary by area, are parallel to US inclusive zoning approach.

The Planning White Paper would appear to propose a very simplified broad-brush approach to zoning – simplified when compared to the traditional US approach to zoning, which allows much more specific zoning categories.

The key question is whether the proposed English approach to zoning will allow for any of the variable approaches operated in US cities (where zoning is determined by the municipal authority), which are in effect deliverable in practice within the pre-existing English planning regime.

A basis for possible reform

The current planning system and planning practice in England does need reforming. (As planning is a devolved function,  the White Paper proposals do not apply to Scotland, Wales or Northern Ireland). There is a case for Local Plans being much more specific about permissible land uses on specific sites and the specific requirements which would then apply.

This would certainly increase certainty for both developers and local residents. It would also ensure land values reflect permissible uses. However, local authorities, at both officer and member level, need to have the power to ensure that development proposals are fully compliant both with the land use allocations in the published plan and with the policy requirements set out in the plan.

This means that a LA development management function is still required. This will include any decisions as to community mitigation and benefit through a form of scheme specific planning obligations regime, which would, where appropriate, be additional to any value-based form of infrastructure levy.

Objectors should not however be able to block schemes which are fully compliant with the published Local Plan in terms of land use and policy requirements. Moreover, applicants should not be able to appeal against LA planning decisions which are supported by a published Local Plan.

However,  local plan making must be set within a wider strategic context, as many local authorities cannot meet their housing needs within their own area, while other authorities may  resist  helping out neighbouring authorities within their travel to work area. 

The Planning White Paper is largely silent on this critical issue, and in fact proposes to abolish the current ‘duty to co-operate’ with neighbouring authorities and the requirement to produce statements of common ground. 

It is necessary that we re-establish a framework of national and regional planning which links national funding of infrastructure to decisions about the locations most appropriate for both residential and employment growth.

Neighbouring authorities should be required to agree a strategic plan within this national and regional framework. No local council should be allowed to opt out of making a contribution to meeting an area’s housing and employment needs.

Localism on its own is not enough and we need a balance of powers between the different spatial levels of governance and democratic accountability.

<span class="has-inline-color has-accent-color"><strong>Duncan Bowie</strong></span>
Duncan Bowie

Duncan Bowie is a semi-retired academic and strategic planner who has written a number of books on housing and planning.

He is a long-term member of the Labour Housing Group.