A LEAP INTO THE VOID

Happy leap day. There can be no better way to spend this bonus day than pondering the latest epic offering on the state of housebuilding, this time from the CMA. I confess, I have read the report, but I need more than a leap day to face all those appendices.

So what does it tell us? Brace yourselves. The year-long review has found that the planning system has a negative impact on housing supply. Stay with me. This is because planning is unpredictable, it takes too long before development can start, planning departments are under-resourced without clear targets and strong incentives, and statutory consultees hold up projects. ?Lack of predictability is due to changing policy requirements and processes, a lack of up to date plans and political and public attitudes. If any of that surprises you, you are in the wrong place.

The investigation helpfully adds to the growing body of work that concludes that house builders do not land bank. That won’t stop them being accused of it, nor will it stop another investigation into the matter in a few years’ time.

The CMA does not presume to make planning recommendations, given the greater universe which planning inhabits and the inherent trade-offs. Instead, it highlights some options such as ensuring local plans are in place and authorities are guided by clear, consistent targets; streamlining the planning system to enable developers to start sooner; and measures to improve capacity in planning departments and increase build out rates by incentivising diversification – albeit this would impact on viability.

Exciting as all this is, there is no single reform that would address all the concerns, and all these options may not deliver quantity of homes needed. This would require more fundamental interventions with fiscal and policy implications, as well as setting and enforcing build out rates, which is something we are expecting to hear more on in the next review of the NPPF. Who said policy is ever changing? ?A week out from the budget, there are also helpful warnings about the limitations and inflationary impacts of measures that stimulate demand.

Without irony, the report extols ‘more objective and effective use of targets,’ triggering an overwhelming sense of déjà vu and nostalgia for August 2020 and the Planning White Paper. In particular, it is critical of the use of out of date data, that targets are adjusted and that the cumulative total of said targets, at 225,000 homes, falls somewhat short of the national target. It also takes a pop at the much-loved urban up-lift.

Helpfully, for additional clarity, it sets out what would constitute effective targets; easy to understand, based on reliable evidence, regularly assessed and unadjusted, and aligning with the national target. For added good measure, these targets could be binding and enforceable. The report drily notes that “recent steps announced by the UK government to allow LPAs to justify not meeting housing targets in England runs contrary to the direction of travel we consider most appropriate in this area.” Quite. Your move Mr Gove.

Another throwback to August 2020 is the idea of a ‘fast-track permission in principle’ as well as critical aspects of development from quantum and mix to design being resolved through the local plan rather than on a case by case basis in applications. Come back Robert, all is forgiven.

Concerns around estate management charges and build quality are also highlighted with recommendations to require councils to adopt amenities; introduce enhanced consumer protections and establish the New Homes Ombudsman ASAP. Plus of course a further investigation into the largest housebuilders. I am not going to comment on these areas as they are not in my wheelhouse, as some might say. But reading the report I could not help thinking that much of the analysis and conclusions seemed more regional than urban/London. I have not been involved in the delivery of many pumping stations or unadopted sewers, but maybe that is my loss.

The regional/allocation to land release model bias is exemplified by a graph concluding that London has the most constrained land supply as so much is previously developed. Of course we do have our challenges, but the vast majority of our development IS on previously developed land, that’s what makes it so complex and expensive and is why measures with greenfield housing in mind have so many unintended and catastrophic consequences. I give you the infrastructure levy.

The practice of drip pricing, a little used phrase before the King’s Speech in November, is to be banned. Whatever the rights or wrongs, it seems a lost opportunity not to extend the concept to ‘drip policy’, limiting ever cascading requirements to meet policy or refute it through reams of consultants’ reports.

The overwhelming conclusion on planning is that the suggested options might increase supply, but won’t really move the dial, with more fundamental changes needed. It feels rather ironic that the CMA should be arguing for state intervention in the form of more funding for affordable housing and land assembly, but there you have it.?

The London Plan expert panel highlighted the multiplicity of policies and regulations strangling development, but we ended up with the ‘new’ brownfield presumption that is unlikely to make much of an impact, given that multiplicity of unmet policies. The CMA refers to the weight of ever-changing policy and alludes to wider trade-offs, but does not unpack what that means and how it might be addressed.

This is all very droll and gives me something to do on our bonus day, but with London Councils now spending ￡90 million a month on temporary accommodation, how many more investigations do we need before we actually face into what is needed to get the homes we so desperately need.