CBI guest blog: why the next government needs to prioritise housing

As the election campaign enters the home straight, a lot of organisations are turning their thoughts to the first 100 days of the next government; key moments like the first Queens Speech and Spending Review. What’s note worthy this time around is how high up housing is in the priorities of organisations outside the sector.

Last week, the CBI – Britain’s leading employers’ organisation – released their list of key issues they wish to see the next government prioritise in their first 100 days. In a guest post below, Dave Rublin explains why the shortage of homes features so prominently and what action they would like to see.

Dave Rublin is a Policy Adviser for the CBI (Confederation of British Industry)

When the country wakes up on the morning of 8th May 2015, it will do so after one of the most unpredictable general elections in living memory. Whoever is in power will face up to some real long-term challenges, including changing skills needs, greater global competition and low social mobility. A lack of decent, affordable housing cuts across all of these challenges, making it critical that building new homes is at the centre of efforts to create a more prosperous Britain.

Like Shelter, the CBI believes that the new government should immediately prioritise housing, demonstrating its commitment to helping people attain a better quality of life. Our business plan for the government’s first 100 days, Best Foot Forward, puts housing at the heart of the policy agenda.

The need to build more homes is not just a social priority, but an economic imperative. In 2013/14 the net supply of housing fell more than 100,000 units short of the 240,000 homes needed each year to meet demand. This shortfall is not a recent phenomenon. For decades Britain has failed to deliver a sufficient supply of homes, incurring significant costs for households and businesses alike.

Recent CBI research found that the housing shortage now costs households an extra £4 billion in inflated housing and transportation costs, with significant knock-on effects for business. Our members consistently cite housing as one of the biggest threats to their ability to compete, with significant difficulties reported in recruitment and retention of employees affected by the lack of housing.

Broadly speaking, we seek action on three “P’s”: planning, plots and partnerships.

Above all else, we must have a plan to combat the housing shortage. Best Foot Forward calls for the introduction of a comprehensive new housing strategy to take a root and branch look at housing policy across the board, mixing ‘big ticket’ solutions with more granular improvements. While there will be no quick fixes to resolving the housing crisis in the next government, a strategy can join up the efforts of national and local authorities more effectively. For example, infrastructure delivery should be coordinated with home building to fast-track the development of large housing sites.

Plots refers to the land supply needed to ramp up home-building. The 2010 National Land Use Database estimated that there is roughly 35,000 hectares of brownfield land in Britain suitable for housing – enough to build more than 1.4 million homes – of which 40% is owned by the public sector. Despite this potential, the location and extent of publically owned land is unclear, particularly at the local level. The incoming government ought to begin a complete assessment of all publically owned land suitable for new homes so it is registered online by 2016, in order to be freed up for house building. However, we also recognise that building on brownfield alone will not be sufficient to meet demand. A new generation of garden cities is needed, with 10 sites designated for development in the first 100 days to attract the investment necessary for creating viable communities.

Finally, building the homes we need will require partnerships between the private and public sectors and the communities affected by new developments. Although support for local house building is growing as people recognise the urgency of building more homes, we need to ensure community buy-in for new developments. So, the next government should commission a review into how to best link incentives to the delivery of new infrastructure chosen directly by local communities. In addition, the regulatory environment must continue evolving to attract institutional investment at scale into house building through joint ventures and other forms of public-private cooperation.

We agree with Shelter that housing is a bellwether for the well-being of society. A robust supply of quality homes creates jobs, improves public health and narrows income inequality. We urge the new government to use its first 100 days in power to show its dedication to tackling the housing shortage, and helping communities across the country deliver the homes necessary for them to thrive.

  1. This is a welcome contribution to the debate on the very important issue of housing need and supply.

    From an economic point of view private developers often cite the fact that they cannot secure planning permission within a reasonable period of time. At the same time allegations of land banking by at least one of the major supermarket chains is equally a problem as that hamstrings a local authority from developing other parts of the same area.

    Furthermore small developments, (eg inner city/town brown field cites) are said to be uneconomic for private companies to redevelop as the unit cost is too high. Society has to overcome this dilemma by some means because inner city areas need to have life in them to help revitalise the death of High Streets.

    The largest supermarket chain gradually built up ownership of a swathe of Gateshead town and then used the pressure of its ownership to develop the commercial proposals that it wished to do so despite some reservations of the Council. As part of the development it included housing – however it was 1000 units specifically designed for students, presumably because it was a better financial return on the investment per unit. It has helped to regenerate the town centre but unfortunately not for people who need a family home.

    How do we resolve this problem?

    1. Thanks for the kind words. The overall direction of travel from the leading parties is to help SME house builders develop smaller sites — the Conservatives are working on proposals to exempt SME house builders from zero carbon homes standards, while Labour has proposed a Help to Build funding mechanism for SMEs if they enter government.
      As for Gateshead, the local planning authorities may have used the statutory requirements for building new commercial and housing developments (both Section 106 provisions and the Community Infrastructure Levy) to focus on regeneration of the town centre. While the regeneration is certainly a positive development, our calls for a review into local incentives stems from the point you raise: how do we ensure that communities get what they consider to be the most value (be it a greater supply of affordable homes, better transport, more social infrastructure such as hospitals, et cetera) from the delivery of new homes?
      Dave Rublin

      1. Dave: Getting the Conservatives to make house builders exemption from zero carbon is a bad idea. Whether one believes in Climate Change or not, we have to remember oil / gas will not last forever. Why build crippled homes?. The cost of retro-fitting a home, will be more, .then doing it the first time, rather than passing on the problem to future owners.

        When it comes to big house buildings tenders, British companies will loose out because the Germans have the expertise and have the lead in in Passivhus.

        The Germans say British companies don’t know how to build eco-homes.

        We need to knowledges to be passed on to grass roots levels and have off-the-shelf solution to meet the challenges of the future.

      2. The CBI is trying to help house builder who want to build on greenfield. In understand their frustration, but there would not be so much resistance, if house builder built decent communities which uplifted the area. Some of the developments is all about trying to get as many units out of the land, but they are not place where people ‘want’ to live. There is no consideration to the ‘comfort’ of homes.

        Some of the homes, built during the 1980s, are plagued with problems. The garages are too small to fit modern cars. People dry their clothes in the living room, due to inadequate place. Many 2 bedroom houses are really 1 bedroom homes with a box room. It is causing problems for me ‘today’ as councils are saying these ‘box room’ are too small for an adult, they are only fit for a child under 10 years old.

        I don’t have much confidence in UK housebuilders. I much rather land be given to those who care about building homes where people choose to live. This means giving land to ‘self-builders’ or small operators or may be even have a competition on who has the best scheme.

        Much of our housing crisis, is down to a lack of quality homes. This is is the reason for the house price boom. People are desperate for quality property, no one wants to live in a cramped two up / two down property. People want houses with upstairs bathrooms, and possibly en-suite. Extra toilets.

        House builders are putting kitchens into the living room, that is out of fashion now, as people don’t want a pipe of dirty dishes in their living room.

        In new development there are further problems, where a proportion of housing is allocated for social housing. It is a tax on housing. S106 is not been used for the benefit of occupants. People who move in to new-builds experience significant anti-social behaviour from a small element within social housing. This again is another reason people are resistant to new developments. The people on the Left, play politics and use the terms ‘poor’ ‘rich’ doors, rather then address the issue of anti-social behaviour problems.

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