It’s all a matter of perspective, isn’t it?

This week's Planning in Focus with The CCP is with Denise Hyland FRSA, interviewing a Senior Planning Officer, in a busy London Borough,? to find out what a professional planner feels about the Housing Market.

Well, what is the Local Authorlty’s viewpoint?

What are your thoughts about the current state of the housing market?

Well, it’s pretty much broken and it’s all to do with viability.? Sales are low, building has slowed? and it needs stimulating.? The registered provider market has almost collapsed because building costs and land prices have soared, Brexit has meant labour is in short supply and whilst increased fire safety is essential it has added to construction costs. Five years ago there was an appetite from Housing Associations to partner with developers for Affordable Housing, but not so much now. Granted there are exceptions, but these tend to be developments committed to a good few years ago. For developers, the involvement of RP’s was risk-free but now that’s drying up. ?

More and more, councils are buying whole blocks of flats from developers, to cope with the unrelenting demand for Temporary Accommodation, in order to avoid hotel use and bring forward social housing stock. Yet, councils are structurally under-funded and cash-strapped without spare money to invest in such schemes. They receive some money from the Mayor of London’s house building programme but it’s just not enough to create the supply needed to meet the demand of the tens of thousands of families on each council’s waiting list. To increase their housing stock council’s can get a bigger quantum quickly by buying oven-ready from the developer.

What can be done to fix the market?

The new Labour Government has said it will ensure 1.5 million homes are built over the next years, which equates to 300.000 a year. The last time this was done was back in the 1960’s/70’s and half of it was delivered by councils. Local Authorities need proper funding from Government to solve the housing crisis. Councils, alongside developers have a huge role to play in delivery of the Government’s aspiration. They need to work with developers, hand in hand, whether in a partnership or through sub-contracting to massively escalate house-building. Some councils are building their own and using developers to deliver homes for their residents but it’s small-scale stuff, grabbing land from redundant garages or scrappy bits of grassed land. There needs to be a major uplift - a national effort. We have so many key workers who struggle financially to live in the city, so we need a variety of products in the market to appeal to people with different affordability needs. There is a ready-made market out there for developers to satisfy but the right models need to put in place.

Government policy needs to support the creation of their aspiration to create homes for people. The last Government’s policy of allowing ‘office to residential’ conversions under permitted development has led to almost 24,000 affordable homes being lost, as councils have no powers to secure AH or infrastructure contributions. The Local Government Association is urging the Government to revoke unfettered permitted development rights or introduce new powers for councils.

How can councils help developers?

When I hear people saying, “Planning is an impediment to growth”, I want to despair! We are there to get it right, lawfully and otherwise, but get it right first time, for its future residents, for the existing residents who have to look at it every day and for the planet. We need to be responsive, efficient and have the capacity to deliver in time. Unfortunately, there is a national shortage of planners and it’s a revolving door of recruitment, with them leaving for higher salaries at other councils or, more often, private consultancies. It’s the price mechanism working against us.

A council’s Local Plan must be up to date - really it’s an investment plan, telling developers exactly what is wanted and where. The Mayor’s London Plan needs to be very strategic, not detailed at a local level - leave that to the individual borough who knows their borough best.?

How can developers help councils??

Consider carefully their products on offer. Councils are faced with a massive list of families wanting a home. Councils want truly affordable housing. Many of the products on offer are simply unaffordable for ordinary working people. The councillors on the planning committee have this in the forefront of their minds when deciding whether to support a particular development.?

Many councils ask developers building on private land to offer 35% Affordable Housing (AH) and of that stake 70% will be for social rent and 30% for intermediate, which can be Shared Ownership (SO).

Shared Ownership is often a flawed product, in my view. If someone cannot afford to singularly buy their own home on the open market on a mortgage, then buying a share and staircasing their share is often expensive - and selling even more complicated. This is particularly the case for London, where the average price for a new apartment can be well in excess of ￡500k and to be eligible for SO the first time buyer’s household needs to be earning less than ￡90k pa. They will be paying their mortgage but also the rent on the share they don’t own. Some no doubt feel trapped for several years.

Engage the local community in your plans. By consulting local people on your ideas and design and listening to their “asks”, and accommodating them as best you can, you can absolutely reduce the objections to the planning committee. They bring a local context which is valuable. You may even find people willing to attend the hearing and support your application!

Developers very often clashed with councils over Affordable Housing and the viability of their proposed development but this situation has been largely resolved with an open book process. Councils will often institute a Section 106 late stage viability review and get a payment in lieu that can be used to provide of-site AH, should the profit margin increase over time.

Discount Market Sales are generally not welcomed because only the first buyer benefits and sells on at a market price.?

Developers could work with investment institutions to build developments that solely or partially provide rental accommodation.? Build to Rent is popular in mainland Europe, where people can take long leases and give their family the stability they need. In the UK, we are fixated on needing to become owner-occupiers, but unlike mainland Europe rental accommodation is often short-term, with rent hikes and until now no-fault evictions. The damage this does to society, with the lack stability of employment, schools and so on is widespread. There is a huge shortage of decent affordable rented accommodation and people are being forced further and further out of London, often travelling back every day, up to 2 hours, to take their children to school and go to work and repeat the journey in the evening.

An increase in Build to Rent would accelerate the construction industry and the delivery of much needed homes. In terms of AH, councils could accept a Discount Market Rent which would range between the social rent of 50% and an intermediate rent of 80% depending on income, or a blended 65%.?

We talk about schools, hospitals and even zebra crossings as infrastructure -? we never mention housing - but it is THE most important infrastructure for UK growth!

Cllr Denise Hyland is an Associate at the CCP and is the former Labour Leader of the Royal Borough of Greenwich and is currently the Cabinet Member for Finance, Resources and Social Value.