Monday, 25 June 2018

A solution to our housing problems: give people the houses they want

We are not getting the housing people actually want - let alone the supporting infrastructure. So says a man at the heart of government: 

 Greater variety of homes needed to solve housing crisis, says Oliver Letwin
Sir Oliver Letwin says homes on the country's largest residential developments are too alike CREDIT:JULIAN SIMMONDS/THE TELEGRAPH

Edward Malnick, whitehall editor
23 JUNE 2018 

It is two years since Sir Oliver Letwin formally left the governmentand yet in recent months he has found himself relied on by Theresa May almost as much as if he had retained his role in the Cabinet Office.

The former Conservative policy chief has been credited with averting at least two major Tory rebellions over Brexit by developing compromise amendments to the government’s Withdrawal Bill.

In November he was asked by Philip Hammond to tackle another thorny issue for Theresa May, who has pledged to increase the number of new homes to 300,000 per year: the vast gap between the number of properties given planning permission, and those that have actually been built.

Sir Oliver’s inquiry began amid claims developers were deliberately “banking” land. The only “land banking” that does exist, he has concluded, is as a result of the “absorption rate”, which sees builders sell new properties over a longer period of time because putting a large number of similar homes on to the market at the same time was depressing prices.

Sir Oliver’s analysis found that firms were taking an average of 15.5 years to complete large developments, with work progressing at a rate of 6.5 per cent of the development per year. At the extreme end of the scale the buildout rate of a development was almost 44 years. “It is an extraordinary fact,” he says. The larger the site, Sir Oliver’s team found, the smaller the percentage of the development that would be built each year.

The problem, he has concluded, is that homes on the largest sites were too alike, both in terms of the buildings themselves and their surroundings, and the “tenure” of the properties – whether, for example, they were ultimately aimed at private purchasers or renters, or those who would be renting through local authorities or housing associations.

“When you go to these estates they will sometimes tell you, ‘we have three or four different flags’, as they put it, or ‘outlets’, or even ‘brands’,” he says. “We have wandered up and down these sites and looked for the differences. I assure you, it’s very difficult to tell which is which.”

He adds: “There are people who want retirement living, people who want student accommodation, people who want homes that look and feel completely different from the sorts of things builders are building on these sites. They will find them in the second hand market very possibly, but they won’t find them on these sites, because these sites are being built like these builders build them – that’s what’s on offer. Any car you want as long as it’s black.”

The exact “policy levers” that Sir Oliver will recommend to tackle the problem will be the subject of the next six months of his review, on which he will report ahead of the November budget. But he now knows what he is aiming to achieve.

“The outcome we need is an outcome which somehow varies in lots of different modes and ways what’s on offer. Just as important that they should be varied in soft ways to do with architecture, urban design, ecology and style as in the hard ways of tenure and size. If you can have different markets that you’re addressing… you will end up with more homes.”

Sir Oliver has been careful to keep his focus on the time period between planning consent being gained and a site being completed, in line with his formal brief. But he will also make recommendations for tackling problems that he has discovered are delaying – by an average of more than four years – the point at which full consent is provided.

“We discovered en route that the provision of major infrastructure, particularly major transport infrastructure… has a huge effect,” he said. “Barking Riverside [in east London] for years and years didn’t happen to speak of because everyone was discussing how not to provide an extension of the Docklands Light Railway. They eventually decided it wasn’t going to be provided and they would instead extend the London Overground. Then Barking could proceed.

“It would be much better if our country were one in which once someone’s decided that there’s a large area of post-industrial land which it would be really useful to build, somebody got their act together and got the infrastructure in place.”

He added: “There are lots of government schemes and money and so on available… but I have noted that co-ordination across the various layers of government – departments, agencies, Highways England and National Grid and all these others – is not good enough to create the energy to get rapid decisions made.”

Another problem is a shortage of bricklayers – which will only get worse if the Government’s efforts lead to a rapid expansion in the number of homes being built, he warns. He calls for a five-year “flash” programme of on-the-job training to increase the number of bricklayers by around 15,000 – adding almost a quarter to the current workforce.

Sir Oliver understands the scale of the task on his hands. Housing, as Mrs May has realised, could make or break the Conservatives at the next election.

“I think there’s absolutely no doubt that any political party that doesn’t take really, really seriously the need to provide sufficient homes for our population… is going to suffer.”
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