If at first you don’t succeed

Originally posted on July 13 on Inside Edge 2, my blog for Inside Housing

It may have important new provisions on housing and planning but the name of the government’s new productivity strategy rather gives the game away.

Described as ‘the second half of the Budget’, Fixing the Foundations was published by the Department for Business Innovation and Skills but includes chapters on housing and planning and welfare that amplify decisions taken in the first half.

But does the name remind you of anything? Go back four years and David Cameron himself was launching a ‘radical and unashamedly ambitious’ housing strategy. The title? Laying the Foundations.

Once they’ve stopped sucking air through their teeth, any builder will tell you that once you’ve laid the foundations and built on top of them, it’s enormously expensive to start to fix them. It’s also a pretty good indication that the foundations were pretty rocky to begin with.

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From One Planet to Dr Earth

Part 2 of my blog on what housing could expect from a multi-party government looks at what the Greens and UKIP are saying.

I suspect many Inside Housing readers would welcome a Green housing minister committed to implementing its manifesto pledges to ‘provide 500,000 social homes for rent over the five-year parliament, control excessive rents and achieve house price stability’.

The manifesto is the only one from the English parties already represented at Westminster that offers a genuine alternative to the current system. While many will question its feasibility, few would quarrel with its principle of ‘making property investment and speculation less attractive and increasing housing supply’. Among the policies on offer are the removal of borrowing caps on councils, the end of the right to buy at a discount, more rights to homeless people, five-year private tenancies with rent increases limited to CPI, removal of tax relief for buy to let landlords and preparations for a land value tax.

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Paying the bill

Blink and you may have missed it but significant housing legislation you may never have heard of passed its final stages in the Commons on Monday night.

Scant discussion in the housing press (including by me) of the Deregulation Bill is perhaps understandable when you consider that it is huge and it covers everything from the right to buy to outer space*. Several of the clauses involving housing were also not in the original Bill and have been added later.

However, here’s what will become law in England this summer as a result of Monday’s votes (there are other minor changes I don’t have room for):

  • The qualifying period for the right to buy will be reduced from five years to three
  • Local authorities will no longer be able to impose standards for new homes that go beyond the building regulations (mainly on energy efficiency)
  • Legislation banning short-term lets of homes in London will be repealed
  • The secretary of state will no longer have the power to require local authorities to produce housing strategies.

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Zero sums

Ministers once promised that Britain would lead the world on zero carbon homes. Do we now just lead the world in hot air?

The 2016 target for all new homes to be zero carbon seemed genuinely revolutionary when Gordon Brown and housing minister Yvette Cooper first announced it in 2006. Questions about practicalities and costs were brushed aside as they argued that the target would spark the mass adoption of new technologies, drive down costs and even open up vast new export markets for British firms. As Cooper put it at the time:

‘In 10 years, all new homes should be built at a zero carbon rating. No other country has set that sort of timetable or ambition but I believe that we need to do it to drive the environmental technologies of the future and ensure that we are building the homes of the future.’

Eight years, and six housing ministers, later and today’s Queen’s Speech promises that ‘legislation will allow for the creation of an allowable solutions scheme to enable all new homes to be built to a zero carbon standard’.  So far, so good. The Liberal Democrats even reached back to the days of Brown and Cooper with their claim on Monday of ‘Britain to lead world on zero carbon homes’.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Tape measure

Plans to ‘end rabbit hutch homes’ made all the headlines but the government’s consultation on housebuilding ‘red tape’ is about much more – and maybe not even that.

The housing standards review was launched in the wake of the government’s housing and construction red tape challenge, which itself was part of a wider drive to eliminate over-regulation in the economy.

Don Foster duly hailed the results published this week as ‘cutting red tape to help build more affordable homes’. Rules on safety and accessibility would not be changed but the number of housing standards that councils are allowed to apply locally would be reduced from more than 100 to fewer than 10.

Nothing wrong with that, you might think. A patchwork of different requirements in different local areas increases design and construction costs for house builders and that means new homes cost more. Instead the Building Regulations will be backed by nationally agreed standards on issues such as security and accessibility.

If that steam rolls its way through the localist principles that supposedly unite the Conservatives and Liberal Democrats, so be it. After all, the coalition did pretty much the same thing on planning with the national planning policy framework for councils that fail to agree a local plan.

But look a little deeper beneath the surface of the documents published this week and it becomes clear that the issues involved in ‘cutting red tape’ and ‘taking off the bureaucratic handbrake’ are highly complex.

First, as the consultation document acknowledges, the costs and benefits are about far more than just the construction cost of a new home. Any consideration of the standards of new homes has to balance a range of different policy considerations for society as a whole against that headline calculation. Sometimes requirements can vary between regions for good reasons and imposing a national standard can lead to increased costs in some areas.

Second, much of the patchwork of local standards that the coalition now wants to scrap is the direct result of its own actions. According to the consultation: ‘One key driver for the increasing adoption of space standards is the NPPF which requires that local authorities have due regard to the nature of housing development in relation to current and future demand.’

Meanwhile the adoption of higher minimum space standards for affordable housing in London than elsewhere followed the decision to hand the Homes and Communities Agency’s London operations over to the Greater London Authority in 2011.

Third, ‘red tape’ is very much in the eye of the beholder. The consultation that is supposedly reducing it actually proposes a new requirement on developers to provide waste storage for new homes to avoid bins dominating street frontages (reducing ‘bin blight’ is an obsession of Conservative communities secretary Eric Pickles) and raises the possibility of new national space standards (supposedly a victory for the Lib Dem half of the coalition). As ‘red’ tape is swept away, blue and yellow tape seems to be taking its place.

Fourth, those plans to ‘end rabbit hutch houses’ (presumably because ‘hobbit homes’ are Boris Johnson) are not at all that they appear to be. The section of the consultation paper on space states that the main purpose is to look at the issues in principle and ‘as a result, government does not have a preferred approach on space standards at this time’. However, six pages later the document states that:

‘The government’s preferred approach would be for market led, voluntary mechanisms such as space labelling, in order to meet consumer needs rather than mandatory application of space standards.’

Space labelling is a scheme put forward by house builders to allow consumers to compare different properties more easily but clearly it could work as an alternative or an adjunct to space standards. My guess is that the confusion could be down to the fact that the Conservatives support the house builders but the Lib Dems are refusing to give up on space standards. As the consultation points out: ‘The degree to which space standards should be developed or mandated is hotly contested and views for and against are very polarised.’

The impact assessment sheds further murky light on the space proposals. It does not include space standard impacts ‘because there is no firm proposal at this stage for a specific space element in the proposed nationally described housing standard and the evidence base on the costs and benefits of different standards is still at an early stage’. A preliminary analysis is tacked on to the end of the main statement. Space standards will be the subject of a huge battle over the next few months but supporters will have to overcome the presumption against them in the consultation.

Fifth, the consultation and impact assessment confirm moves to water down previous commitments on the sustainability and energy efficiency of new homes while still using the same terminology. The code for sustainable homes, which was set up to blaze a trail ahead of minimum standards laid down in the Building Regulations is seen as responsible for ‘a proliferation of local design standard requirements’ that have added to costs. It will now be phased out and the impact assessment states that ‘code levels 4, 5 and 6 do not now fit in with, or represent the government’s definition of zero carbon’. The Planning and Energy Act 2008, which allows local authorities to set requirements for on-site renewables, ‘may need to be amended or removed’.

The UK Green Building Council, founded by industry and environmental groups, argues that the proposals ‘fail to provide a vision for sustainable homes’ and exclude key sustainability requirements such as responsible sourcing of materials and ecology. Chief executive Paul King said these omissions plus the demise of the code risk ‘losing a momentum that has transformed the way homes have been built over the last seven years. The government claims its plans will take off the bureaucratic handbrake that holds back housebuilding, but it is in danger of letting key sustainability requirements roll away completely.’

Just as well then that my final point is that the environmental impact will not be as great as it seemed it would be when the UK-GBC was founded in 2007 and output of new homes was around 180,000. Completions are of course currently running at around 110,000 or half the level needed to achieve 250,000 net additions to the stock per year. The impact assessment includes an estimate of housing growth over the next 10 years. Under the (optimistic?) midpoint estimate of 4.5 per cent growth a year it will take until 2022 to get back to 2007 levels.

Communities and Local Government department ministers claim that policies to boost house building such as the elimination of ‘red tape’ proposed in this consultation are working. Their own civil servants estimate that England will fall at least another 500,000 homes behind the level needed to meet demand over the next 10 years.

Originally posted on my blog for Inside Housing


Sold short

A stark warning of the consequences of market failure in the housing system comes from an independent commission today.

The broad-based group set up by the Royal Institution of Chartered Surveyors(RICS) is chaired by Michael Newey, RICS president elect and chief executive of Broadland Housing Group, and also includes Mark Clare of Barratt, Nick Jopling of Grainger, James Pargeter of Deloitte Real Estate, Paul Tennant of Orbit and Duncan Maclennan of University of St Andrews.

They argue that: ‘High house prices, complemented with high levels of housing unaffordability are the greatest signs of market failure. This in turn has an adverse effect on labour mobility, commuting, productivity and job creation. This commission recognises the negative impact that a poor housing system has on the wider economy and hopes to see it elevated still higher on government agendas.

In other words, what the commission argues are ‘clear signs of market failure’ include negative externalities that go far beyond housing and require a switch away from the ‘short-termism’ that has characterised policy for the last 50 years.

However, in an illustration of just how difficult it is to break away from a short-term approach, the commission seems to face both ways on current government policies.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Top of the hill

Twice before governments have attempted to force through improvements to the energy efficiency of existing homes and then backed down. Now the backlash is building again.

In both 2002 and 2006 the plan was to amend Part L of the Building Regulations so that home owners building an extension or a conservatory or replacing the windows or the boiler would also have to address the efficiency of the rest of the house. Both times vested interests and political cowardice killed the idea off.

Read the rest of this post on Inside Edge, my blog for Inside Housing.