Right to Build. Doing what it says on the tin?
9 May 2014
Whatever you think about the Right to Buy, it had a clear mission and a comprehensive approach to achieving it.
Much like the tagline of a popular wood stain, ‘it did exactly what it said on the tin’. For the first time any tenant living in social housing was free to purchase their home.
What’s more, there was implicit acknowledgement that a right that can’t be exercised is no right at all. Like the old argument goes, just because everyone is free to eat at the Ritz it doesn’t mean they have the freedom (AKA cash) to do so.
So under Right to Buy social tenants were given a discount to bring the right within reach. People living in social and council housing were not only given the right in-principle; the opportunity to become a home owner was extended in practice.
For people who want to build their own home, then, there was particular reason for excitement about the new Right to Build announced in last months’ Budget.
Finding suitable and affordable land is widely identified by self-builders and self-building groups as the principal barrier to being able to build a home of your own (or commission one from a local builder). So opening up access to affordable plots is absolutely central to making a Right to Build a practical reality.
The budget included only a little detail, but the promise to consult on giving “custom builders a right to a plot from councils” alongside mention of “10,000 serviced plots” provided significant reason to hope that the ‘Ronseal approach’ would be brought to self-building.
On Tuesday we got the first extra information from Government about how the Right to Build – which will be consulted on in the summer – may work from the planning minister, who backed the scheme as ‘the son of Right to Buy’. The official details are still very slender, but the early indications are not as promising as prospective self-builders might have hoped.
Under the headline “Sue your council if you can’t get a plot of land to build on”, the Telegraph reported that the Right to Build will amount to “a legal right to get a plot of land” – at market rates. If council’s don’t meet their new legal duty to provide qualifying self-builders with plots of land at market rates, the planning minister said, individuals will be able to go to court to oblige them to do so.
Would this amount to a ‘right’ to build in the same way that Right to Buy introduced a practical right to be a home owner for social tenants? The short answer is unfortunately ‘no’.
While the provision of ‘serviced’ (i.e. build ready) plots in local authorities across the country as a norm would make building on a plot once it’s been secured easier (and possibly cheaper), the current proposition wouldn’t get to grips with the central question of affordability. Self-builders already have the opportunity to bid at market rates on land that councils are selling and many councils, faced with budget pressures, are already disposing of land. The problem is that self-builders – particularly those on middle incomes – are normally outbid.
Government has pledged more access to finance, with a new £150 million loan fund and possible extension of Help to Buy mooted, but this will do nothing about the fundamental high price and affordability of land.
Perhaps even more worryingly: by raising the prospect of resolving matters in the courts, the current proposal raises the possibility that prospective self-builders may not only have to pay market rates, but legal costs too, making it less affordable.
This is not to say that public land should be sold at a discount to self-builders.
While encouraging more self-building is central to making the housing supply system more competitive, as Shelter and KPMG outlined last week, there should be genuine questions about whether self-build should be the policy priority for state subsidy.
However, as we also proposed with KPMG, the real prize for self-builders (and for others who have been priced out of home ownership more generally) is sorting out the market failures in the land market that make land values so high in the first place.
Our proposals include both new garden cities and new proactive planning powers for councils to create New Home Zones, unlocking land more cheaply and reserving 20% of all of new plots for self or custom builders.
Only if policy-makers commit to making self-building a practical possibility for people on middle incomes by putting these changes into action can we expect to see a genuine ‘right to build’.