Help to Build

At last week’s PMQs, Ed Miliband and David Cameron traded blows about the number of homes Labour and the Conservatives have built in office. Then over the weekend Nick Clegg threw his support behind the idea of building new towns, even going so far as to name two potential sites. When MPs as far apart on the political spectrum as Austin Mitchell and John Redwood agree that we need to build more homes, it’s as close to a consensus issue as British politics is likely to get.

Of course, major disagreements between the parties do remain, on what to build, where to build and how to build.

There is no silver bullet to the housing shortage, so it’s important to keep an open mind as their policies develop. However I’d like to suggest six tests to apply that will give a strong indication as to whether ideas put forward will really be ‘Help to Build’ or just more of the same:

  • Does it make more land available for building? Brownfield first, but some green field land will be needed if we are to build enough homes. For years, we’ve been making less and less land available for new homes which pushes up the end price for home buyers and renters.
  • Does it break the “land price trap”? As well as more land, we need land that doesn’t cost the earth (sorry). In France, Germany and Holland they let councils buy land at its existing use value, for example farm value. Councils then put in the roads, schools and bike lanes because they know they’ll get the extra cash generated by designating the land as residential. Without breaking the trap of high land prices, it’s always a squeeze to pay for essential infrastructure, or affordable housing, and quality is always squeezed.
  • Does it help local builders? To get building enough homes, we’ll need the big developers running at full capacity.  But we also need to expand the number and range of builders in the market in order to get a step-change in building. New policies must create opportunities for builders who specialise on smaller sites and firms that prioritise construction, rather than land trading. Increasing the amount of self-build is one obvious way to do this.
  • Does it deliver a full range of homes and tenures? During the house price boom of the 2000s, half of the homes being built in England were flats, many of which were in expensive city centre developments and bought by buy-to-let investors. We need a housing policy which is much more responsive to needs. This means a mix of tenures affordable to people on different incomes: social rent, shared ownership and full market ownership. We also need a range of flats, family homes and homes for older people to downsize into.
  • Does it rely on house price inflation? The problem with Help to Buy is not that it doesn’t increase building (it does in the short term), but that it can only work by inflating house prices. While it may get a few people onto the ladder with lots of debt, it prices out the next lot. That’s not fair, and it’s not economically sensible either. We need strategy for building homes which can work with stable house prices. They manage to do it Holland and Germany, so there’s no reason we can’t here. 
  • Are the homes built for living, not investing? I think the biggest test of a new housing strategy is whether it can begin to challenge our culture of building financial assets dressed up loosely as places to live. We have some of the smallest as well as the most expensive new homes in Europe, despite not being the most densely populated country. Let’s start building homes as places to live, not places to invest. In practice, this means policies for new homes which reduce the role of speculative investment and buy-to-let and instead use long term investment to pay for quality new homes at prices ordinary people can afford to rent or buy.

 

 

 

Share this Article

Tell us your thoughts on social housing, to get your voice heard at a national level

Want to take action? Help us be there for every person who needs us

Had a bad housing experience? Share your story, to help us campaign for real change