Shaun Spiers, Chief Executive of the Campaign to Protect Rural England (CPRE), calls for a reinvigorated building programme to address housing scarcity in both towns and country, while safeguarding the countryside
Yes, we need to build more homes and share them out more fairly. I will come to that. But first it is worth saying that there is an aesthetic dimension to intergenerational fairness.
Focussing on a fair distribution of material goods and life chances is understandable. But other things also matter. Beautiful, interesting, historic places make for better lives. They should be as much a part of our inheritance as material prosperity.
This country is blessed with some of the finest countryside in the world. We have wonderful towns and cities, dripping in history. But we also have far too many ugly, third-rate developments; depressing townscapes; bland, car-dependent estates of anonymous, anywhere houses sprawling into the countryside.
And we risk creating more of them. If setting targets and building homes are two different things, there is an even greater difference between setting targets and creating good places to live.
The target culture
The Labour government was keen on targets. Under Gordon Brown, house building increased and additions to the housing stock exceeded household formation (as they had from the mid-1970s). But too many new homes were built for investment rather than need. And then came the crash.
The Coalition came in arguing that top-down targets had resulted in too much strife and too few houses. Their solution, beneath the localist rhetoric, was to get local authorities to release more land in the expectation that the house builders would then build more homes.
It did not work (as the Government has begun to realise) because land availability is not the problem. There is plenty of land, much of it with planning permission. Recent CPRE research has established that there is suitable brownfield land available for at least a million homes, most of it in the high demand areas of London and the wider Southeast. The stock of brownfield land increases every year: it is like a stream, not a reservoir. And there is untapped potential to build many more homes on small sites that are rarely included in capacity studies.
Who is not building any more?
The problem is finding the people to build the houses we need. For 35 years after the war, when the country comfortably built more than 200,000 homes every year, the state built at least half of them. Then we largely stopped building social housing. The theory was that the private sector would increase its output to compensate, and that increased supply would help depress house price inflation. But the private sector showed an unsurprising reluctance to play this game. Its output has remained pretty constant since the war, allowing for wider economic factors such as interest rates.
Worse, the output of the small and medium-sized enterprises (SMEs) that used to build over two-thirds of private houses has declined steeply, leaving governments reliant on a few big house builders with little interest in greatly increasing their output. Given more greenfield land, they will build on it – but instead of, not as well as, building in towns and cities. When they do build in towns and cities, particularly London, many of these homes will be sold off-plan to foreign investors. This applies even to companies that argue the need to build in the Green Belt in order to meet housing need.
The state builds few houses; SMEs are struggling; and the major builders have no economic interest in increasing their output to meet housing need. So what is to be done?
There are no easy solutions, but incremental change will not be enough. We need vision and a willingness to do things differently. We have become used to thinking within a narrow policy framework which rules out regulation and public spending and looks to the market for all solutions. In the case of housing, we need rather more ambition.
So here are a few things to think about. They do not presume 100% brownfield development – CPRE has never advocated that. But I do assume that most of the development will be in existing towns and cities or well-planned urban extension. Making lots of rural land available for development will not result in a big increase in house building. And even if it would, there are better solutions.
- Commit to stable house prices. Under-supply is only one cause of house price inflation. We have a tax system that encourages people to view housing principally as an investment. We should look at council tax bands but also, as recently suggested by Kate Barker, at capital gains tax on first properties. Why should a house “earn” more in a year, tax free, than its well-paid owner?
- Invest in social housing. What the state used to spend building houses, it now spends on Housing Benefit, most of which goes into the pockets of the already well off. It will not be easy to switch back to building homes, but a good start would be to redirect some of the public funds we now use to prop up private builders and subsidise home ownership. And perhaps a future round of quantitative easing could be devoted to building good quality, environmentally efficient homes on brownfield sites.
- In particular, fund affordable homes – affordable in perpetuity – in rural areas where the difference between house prices and earnings means that market housing will always be out of the reach of local people. Currently, housing associations have to show huge ingenuity to build just a few homes in village, finding money from various pots and often cross-subsidising from unneeded market housing. Most villages have lost their Council housing and tied cottages. If we want living villages, the only solution is to build more social housing.
- Capture for society the uplift in land values arising from the granting of planning permission. The 1947 planning act effectively nationalised development rights. When Milton Keynes was first developed, land costs accounted for just 1% of the total cost of a new home. Today, the cost can be as high as 40%. Land is no scarcer than it was in the 1960s, but under governments of all three main parties the state has become both less confident and more tolerant of rich people earning huge sums for doing nothing.
- Keep thinking about how we can spread wealth across the country. Interest in city-regions and the “northern powerhouse” is welcome, but more needs to be done both in terms of finance and strategic planning to prevent the Southeast sucking in more of the country’s wealth and people (a land use strategy for England, anyone?) If we assume that the future must be like the recent past, with London, Oxford, Cambridge and a few other places in the wider Southeast growing inexorably, we will have under-employment and wasted space in most of country and an increasingly pressured environment in the rest of it.
- Do not compromise on quality. We need to build, but let us do so beautifully and sustainably, creating homes and places that future generations will delight to live in.
A modest agenda, but one that could unite conservationists and housing campaigners, and do much to make our country a better and fairer place to live.