Housing in the Tory leadership contest

Originally posted as a blog for Inside Housing on June 19 – updated June 21. 

Beneath the surface of a Conservative leadership battle dominated by Brexit and Boris Johnson there is a battle of ideas about the future direction of Conservative housing policy.

Put at its simplest, the battle is about whether to continue in the pragmatic direction signalled by Theresa May since 2016 or go back to the more ideological one taken by David Cameron before then.

But scratch a little deeper there are more fundamental debates going on about how far to go in fixing a housing market that most Tories agree has turned into an electoral liability for them.

Key questions such as how far the government should go in borrowing to invest in new homes and intervening in the private rented sector and the land market are back on the Conservative agenda.

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Housing in the Spring Statement

Originally published on March 13 as a blog for Inside Housing.

With Brexit dominating everything, the Spring Statement seems at first glance to be just as underwhelming as the chancellor hoped when he moved the main Budget event of the year to the Autumn.

The most eye-catching details from usual array of announcements and re-announcements on housing includes are £3bn Affordable Housing Guarantee Scheme to support 30,000 homes and a proposal to ban fossil fuel heating systems in new homes from 2025.

But to add to the sense of Brexit drift, the first re-introduces a coalition scheme that lowered borrowing costs for housing associations but was abolished in 2015 while the second does something to address climate change but will be arriving nine years later than the zero carbon homes that were scrapped by the coalition.

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10 things about 2018 – part two

Originally posted on December 28 as a column for Inside Housing. 

The second part of my look back at the year runs from land to Brexit via renting and council housing. Part one is here.

6. The land question

If 2018 was the year of the tenant, then another issue was not far behind as the land question took on an importance arguably not seen since before the First World War.

A developing political consensus around the potential of land value capture as a funding mechanism for infrastructure and affordable housing found expression in a favourable report from the all-party Housing, Communities and Local Government Committee and an open letter signed by former Downing Street insiders and think tanks and organisations across the political spectrum. One report put the net profit made by landowners just for getting planning permission for housing at a cool £13 bn a year.

At the same time the chancellor appointed former Cabinet minister Sir Oliver Letwin to lead out an independent review of the slow pace at which homes get built. Letwin quickly focussed on slow-build out rates on large sites but concluded that the reason why they take an average of more than 15 years to complete has less to do with landbanking (hoarding land with planning permission) than the absorption rate (the fact that developers only build as fast as they can sell for a required profit in local markets).

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The best housing books of 2018

Originally published as a column for Inside Housing on December 17.

As housing has risen up the political and media agendas, so the shelves are filling with books explaining where we’ve gone wrong and what we could do to put things right.

Reflecting that, and just in time for anyone wondering what to get the housing nerd in their life for Christmas, here are my three housing books of the year.

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First up is John Boughton’s indispensable history of council housing, Municipal Dreams – The Rise and Fall of Council Housing.

It’s a predictable choice and one already made by many other reviewers but it is one that is better late than never and one that will be even more worth reading next year against the background of the centenary of Homes Fit for Heroes.

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More housing questions than answers

Originally posted on my blog for Inside Housing on December 11. 

As Westminster grinds to a halt over Brexit at least some progress is still being made on housing – or is it?

In the year of the social housing green paper and the end of the borrowing cap, some things have undoubtedly moved but the signs at Housing Communities and Local Government questions on Monday were that others are grinding to a halt.

First up was the land question and specifically the way that MHCLG dashed hopes of radical reform of land value capture in its response to a Housing Communities and Local Government Committee report recommending big changes to a system that sees planning permission for housing increase the value of agricultural land by 100 times.

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Planning, profits and public land

Originally posted on my blog for Inside Housing on September 24. 

While all eyes were on the prime minister’s speech at the National Housing Summit you may have missed news that landowners are now making an astonishing £13 bn a year pre-tax profit just from getting planning permission for housing.

That is the estimate in a new report from the Centre for Progressive Policy (CPP) and the National Housing Federation (NHF) published on the same day as Theresa May was telling housing associations what they wanted to hear.

The £13 bn profit made by landowners in England in 2016/17 is up £4 bn on 2014/15 thanks to a huge increase in residential land values in the last two years.

Seen from one end of the telescope, that was already more than the profits of the entire UK housebuilding industry and it is now more than the global profits of Amazon, Coca Cola and McDonald’s combined.

But the impact can also be seen from the other end of the telescope, with housing association after housing association quoting examples of where they have been outbid by private developers for land.

The sites are often public land but individual associations report examples of developers who bid a higher price than them only to do nothing with it or sell it on for a profit shortly afterwards.

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Land value capture looks like an idea whose time has come

Originally published on September 13 on my blog for Inside Housing.

How does land worth £21,000 or £482,000 per hectare suddenly become worth £1.95m? And who should get the windfall?

The answer to the first question is, of course, when agricultural or industrial land is granted planning permission for residential use (all three figures are estimates in government statistics).

The answer to the second is much more complicated – getting it right could boost construction of new homes and provide a new source of funds for infrastructure and affordable housing; getting it wrong could destroy incentives for landowners to bring land forward and mean housebuilding dries up.

Now the all-party Housing, Communities and Local Government Committee has published a report on an issue that has a long history dating back to Winston Churchill’s criticism of the ‘unearned increment’ made by landowners following public investment in infrastructure – and even right back to Henry VIII.

Support for reform has grown across the political spectrum and even the last Conservative manifesto promised to ‘work with private and public sector housebuilders’ on the issue.

Supporters note, correctly, that the success of the post-war new towns was based on their ability to buy land at existing use value and use the uplift to fund infrastructure but that all this was stymied by legislation such as the 1961 Land Compensation Act that entitled landowners to the ‘hope value’ after their land is developed.

At the same time history is littered with examples of governments introducing uplift levies and tariffs and supplements that failed to deliver and sceptical landowners and housebuilders argue that reform will be prove much more complicated than supporters make out.

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