Rising land values should fund councils to build affordable homes
rather than fuel developers’ profits.
Britain for the past three decades, relative to population size, has
built fewer houses than any other western European country. In January 2017 a
white paper showed that just 140,660 homes in England were completed in the
year to December, a 1% fall on 2015. It also revealed that housing associations,
the main providers of homes classed as “affordable”, built a fifth fewer homes
in 12 months, due to Conservative policies that forced them to cut rents and
sell off valuable housing stock.
Continuation of the right-to-buy policy, pioneered by the Thatcher
government in the early 1980s, is not an incentive to build for the neediest –
if a new breed of council-owned housing companies will be subject to enforced
sales of new homes.
It seems the focus has now shifted from blaming councils for delaying
plans, through a cumbersome planning system, to blaming builders and developers
for sitting on large land banks once planning permission has been granted.
When around 270,000 homes are annually given planning permission, why are
only half that number being built? Two years ago an independent commission,
reported that six firms of land agents alone were holding strategic land banks
of 23,000 acres and warned that owners were holding onto land, sometimes with
planning permission, in the hope that it would rise in value. Why is so much
tied up in opaque agreements between owners and developers? Is an artificial
scarcity of land distorting the housing market and limiting building?
“Ministers, implicitly critical of the building industry, have floated
the idea of giving powers to the Land Registry, which logs house transactions
and – ostensibly – ownership of land, to try to uncover the scale of the
problem. There is even a strong hint that the public sector – councils and
government agencies – rather than developers should get the financial benefit
from an uplift in land value once planning permission is granted. If that
sounds radical, it is a model that funds housing, and infrastructure, in many
other countries. That alone might go some way towards fixing a broken market –
if it ever happens. We shall see.”
Source: UK’s housing market is broken, and only a radical solution can fix it by Peter Hetherington in The Guardian, 28 February 2017
