Today’s release of the White Paper on housing will finally show us whether the government is serious about tackling the housing shortage and giving renters the security they need. This blog looks at what’s been trailed so far.
After a gestation period longer than an elephant’s and as closely watched as a royal pregnancy, the White Paper on housing is finally due to be birthed later day. Despite a huge number of trails, leaks and pre-briefs, we still don’t know exactly what will be in it – not that that has stopped lots of media commentators from celebrating it as ‘a multi-pronged assault to solve the nation’s housing crisis’ or denouncing it as putting ‘ministers on collision course with countryside campaigners,’ depending on their perspective.
Some of the most important bits (for good or ill) are likely to be buried in the small print. So as a good policy swot, I’ll wait for the actual document to be published before pronouncing on the plans – but here’s a quick run-down of what’s been trailed so far.
A shift of tone towards renting, and explicitly ending the previous government’s obsession with homeownership over everything else, is definitely welcome. Of course homeownership is great for many people, and what most people understandably aspire to. But there will always be a sizeable chunk of the population who need a decent, secure, affordable place to rent – and for far too long their interests has been marginalised. Worst of all, by pumping public money into an overheated housing market, subsidies like Help to Buy have driven house prices even further out of reach – worsening the very problem they were meant to solve, and leaving more and more people stuck in an overpriced, unstable and often substandard private rented sector.
So a bit of rebalancing here is long overdue. What exactly the White Paper will do for renters remains to be seen: ideally it would give them the security they desperately need by introducing five-year minimum tenancies across the board (with break clauses for tenants). But the hints so far suggest that the government has ducked this one, and is proposing only some very mild measures to ‘incentivise’ longer tenancies on a handful of new build schemes. This would be deeply disappointing for the 2.5m renting parents – and their 2.8 million children – who will be left stuck with short term tenancies, never knowing when they might be forced to move.
There have been suggestions that the government plans to create yet another category of affordable housing: ‘affordable private rent’. This is pretty dispiriting for anyone who has tried to keep up with the bewildering array of new tenure products created in recent years, which have stretched the meaning of the work ‘affordable’ beyond breaking point. Just calling a home ‘affordable’ doesn’t make it so, and the public are increasingly cynical of politicians’ efforts to make this problem go away by slapping spurious labels on things. To be genuinely affordable a home should cost no more in rent or mortgage payments than one third of a household’s income: and that means rent levels that are set relative to earnings, not the overheated market. 80% of market rents is neither affordable, nor secure: it’s not even clear what ‘80% of market’ actually means, as there is no such thing as a clear definition of the market rent for any particular home.
Nearly everyone accepts that we need to build far more homes, but so far the messages on how the White Paper aims to achieve this have been somewhat conflicting. On the one hand, the government has clearly decided not to go to war over the green belt. This is probably sensible – and certainly inevitable – as the issue has become far too polarised to be productive. Our position is clear: that green belt is a good policy for preventing unsustainable urban sprawl, and that when cities need to grow outward some bits of green belt land are good places to do it. Current policy allows for sensible review of green belts – it’s a political, not a technical, problem. So pouring a bit of oil on troubled waters, while maintaining pressure on local plans to do the right thing, is a reasonable, if unadventurous, approach. It’s also right to be clearer about the bits of green belt that really are precious – like ancient woodland – so the debate can start to distinguish between environmental designations like Areas of Outstanding Natural Beauty and Site of Special Scientific Interest, and urban containment designations – which is what green belt actually is.
Similarly, the proposal to require local housing need to be assessed on a standardised basis makes sense, although this is a complex area and has to be got right. It’s vital that the new methodology take proper account of the needs people who are homeless or struggling to keep a roof over their head – and the national need for some places to grow. Local need can’t be allowed to mean ‘exactly the people who are already well-housed here, and no more’.
The real question for us though is not about planning at all – which is often a red herring in the argument over how to build more homes. It’s about actually building the homes that we need – including those that already have planning permission. And it’s here that the internal arguments over the White Paper’s development seem to have been most intense. There are always those voices who insist that if the government get out of the way, and hand developers a few more bungs and easy planning permissions, the market will solve the housing shortage. You will know that this side has won if the meat of the White Paper is all about tweaking the planning system, yet again. But it would be a terrible waste of an opportunity, because the planning system is simply not the biggest, let alone the only, barrier here.
The holders of planning permissions – overwhelmingly the big developers – have no interest in building so many homes that their sale prices fall. If we really want to increase supply AND make housing more affordable, far more radical intervention is needed. Some of the trailed stories suggest that Sajid Javid is ready to take on the system and drive more housebuilding – by tackling the vested interests that control the supply of land and the pace of building. Today’s story in The Sun claimed he will give local authorities the power to compulsorily purchase sites with planning permission that are not being built out. This is exactly the sort of brave, bold action that we need. If there measures like this in the White Paper, we’ll know that the government is finally getting serious about fixing our housing shortage.
Our list of policies we’d like to see in the White Paper is here. When the document is finally released later today I’ll be reading it with interest, bingo pen at the ready. Here’s hoping it doesn’t duck the challenge.