Increasing the supply of reasonably priced housing in the UK

Denis Minns’ written evidence to the Economics of the UK housing market inquiry in 2015 which some Government Policy now recites.

1 | Seek to eliminate ‘development costs’

There was a time when we spoke of ‘building costs’ of new homes. The costs of bricks and mortar, timber and tiles and the fitting out and finishes. Today there are so many additional ‘development’ costs driven by compliance. Additional drawings, surveys and reports for planning applications. Method statements for tree works health and safety. Building standards compliance and new home warranties. Service information, Indemnity insurances and bonds. The cost of a new home is increased by these development costs and crucially the time taken to tick all these boxes which is often spent by highly paid professional consultants. Many planning conditions requiring further planning applications and written permission prior to commencement of works are unnecessary.

Many development costs and planning conditions could be erased.

2 | Allocate sites specifically for certain housing categories

The RICS suggested this some years ago. Planning permissions should specify the category of residential development granted whether it be for Private rent, social housing, homes for the elderly, first time buyer housing or indeed a mix. This would depend on a planning authority’s housing needs. The value of the site would thereby be ascribed by the category of residential development permitted. This would enable sites for social rent for example to available at lower cost as the planning permission would limit the value of the site.

This would be a relatively simply change to subordinate legislation.

3 | Take positive action to identify ‘grey belt’ land for development

By ‘grey belt’ I mean that colourless wasteland that surrounds our urban areas without the energy of the urban build environment or the tranquility of the rural idyll. There will be small pockets of land here that are virtually serviced. Little additional infrastructure will be required.

Some local authorities are calling in proposals for sites. This is a welcome pro active approach and should see some better use of grey belt land.

4 | Offsite production and design common denominators

Eric Lyons, the architect who designed the new village of Ash Green in Kent spoke of ‘common denominators’ in housing. Those repeated designs and components that reduce cost. Offsite production of houses to repetitive designs would reduce costs of design and construction.

Repetition should be embraced. Use of common denominators and offsite production of houses should be encouraged.

5 | Increased densities

Britain seems obsessed with two storey housing. In France some of the more beautiful urban areas are four or five storey. Kensington and Chelsea is the most expensive residential borough in London. Yet it is one of the most densely built in the country.

We should introduce a planning presumption that any single storey house may be demolished to be replaced up to three storey house unless there are compelling reasons not to allow it.

6 | Government schemes

Shared Ownership is an excellent scheme operated by most housing associations and should be encouraged. Stair casing should be made as easy as possible. Subsidy of Shared Ownership tenants in stair casing is the proper way to encourage Right to Buy. Housing associations should be given more freedom to transfer tenants from their rented models to Shared Ownership models with the prospect of eventual ownership. Shared Ownership tenants should be given the freedom to sub-let rooms.

Right to Buy housing association houses is a flawed concept which is highly controversial seeming to favour a small group of people. It is unloved by professionals as it weakens the ability of Housing Associations to carry out their functions and potentially reduces housing association stock.

Allow housing associations to control their own disposal of housing through their shared ownership model.

7 | Taxation

Stamp Duty Land Tax is in practice a tax on the sale price of a house. If SFLT is raised, the vendor will receive less for his house, when reduced he will receive more. However the buyer pays this tax and her perceives it as a burden when on completion he pays over SDLT to the revenue. It is thereby a disincentive to demand. Knight Frank have recently reported substantial decreases in transaction volumes in the high end housing markets in London. The raising of SDLT levels on high end housing and its reduction on low cost houses has merely distorted the relative prices of houses.

SDLT is an efficient tax to collect in a nation where land is subject to compulsory registration. It is therefore essential to retain it but essential to get it right. I doubt whether the receipts of SDLT since the charges were implemented have increased the tax receipts.

Incentives need to be introduced to increase transaction levels. Further reform might be directed as socio-economic goals. For example certain houses could qualify as SDLT free. Houses sold for demolition and redevelopment for example.

Community infrastructure levy is calculated at a set rate per square metre of additional accommodation permitted. It is a blunt instrument of local taxation based on infrastructure requirement and does little to encourage the provision of house building particularly of smaller sites where development values are only marginally in excess of existing use values.

Community infrastructure levy should apply only to larger sites.

8 | Privately rented accommodation

We are starting to see more large professional landlords coming in to the Private Rented sector. We will thereby witness more professionalism and consistency in management, more build to let schemes, longer term tenancies and security of tenure. The reduction in tax relief to small landlords is not therefore disincentive to supply of new homes to the private sector.

Encouragement of stable rented accommodation comes from larger landlords with long term strategies, and build to let schemes designed for rentals.

9 | Social Housing

Social housing is housing let at low rents to those who simply cannot afford to pay market rents for their housing. Right to buy has no place in this category. The objective has to be to reduce rents as much as possible so that tenants can afford them without resorting to Housing Benefit. This might be achieved by; *Building far more social housing schemes recognising 1 and 2 above. Designing and building cheaply. Allocated social housing sites. *Imposing strict occupancy conditions on tenants. No car where parking is limited, no smoking in blocks of flats, alcohol ban for certain tenants.

The requirement for percentages of affordable housing as a condition of a planning permission is established. Local planning authorities should adopt a flexible approach to making housing affordable. For example discounted housing. The sale of new homes to first time buyers at discount to market price. This might be an affordable requirement that would benefit the developer and the local authority.

Local planning authorities have long been requested to recognise viability when dictating affordable requirements. They should be willing to be flexible.