Housing stagnation is hardly a surprise

We need to change our housing policy to improve the quality and quantity of what is built.

The release of the 2011 figures showing stagnation in housing construction is unsurprising. Since the mid-Nineties, house prices have tripled but the number of new homes being built has fallen. This is seriously dysfunctional and is primarily due to a series of overlapping policy failures.

Firstly, there is our planning system. We release too little land for new homes: the amount of homes we built in the 2000s was the fewest since the war, and less than half of what we built in the 1960s. We preserve giant fields of wheat or low grade farmland, yet only 10 per cent of England is built on. We destroy gardens and build tiny homes, and then complain that this country is too cramped.

Our planning system also leads to poor quality housing, creating understandable NIMBYism. The current plan-led system of allocating land and housing has reams of quality control dictating what new development must look like. It fails. Almost everyone would rather live in a building built before our 1947 Town and Country Planning Act than after it. We have created a system where once developers have paid for land and made a payment to the council to obtain planning permission (entitled Section 106), they are probably out of pocket to the tune of £50,000 to £100,000. On top of that, people are so desperate for a home you can put up almost anything and make a profit. And instead of homes being what people want, they must satisfy council planners.

Allied to planning is the bubble created by our banking and finance system. By the peak of the bubble in 2007 around 75 per cent of all bank lending was going to property, almost all speculation. The only parts of the world that didn't see a property bubble were outside the euro and released enough land to keep housing costs close to construction (largely in the Southern US)." Banks funded a self-perpetuating bubble on the back of inelastic land supply.

Currently, our planning system allows developers to make abnormally high profits, which they choose over better homes or increased supply. Mortgage lending is up, while business lending falls. Land is still too expensive. Meanwhile nearly 10 per cent of mortgages are in forebearance even with interest rates at 0 per cent -- but everyone pretends the show must (and can) go on. We are repeating past mistakes.

In the last couple of years Policy Exchange has argued for a series of changes to accelerate the provision of new housing, from converting derelict office and retail space to allowing new large-scale suburbs and new Garden Cities supported by local people. We support a move away from the top down council-led planning system. Instead, we propose that local people can block development if 50 per cent vote against it. We also propose compensation for green field development along with parks and more green spaces attached to new development. We need fewer 500-page, incomprehensible council plans and more land released for attractive development with attractive green space attached.

This could be a key plank of the growth strategy that the government urgently needs; particularly as it would see construction accelerate most around the future growth hubs like Oxford, Cambridge, Leeds, York and London. We pretend we are desperate for growth but refuse to allow it where business needs it -- accelerating the shift of economic power to Asia.

Nothing that the government has proposed so far will shift the essential fundamentals. Unless the relevant Ministers, Greg Clark and Grant Shapps, are preparing models that will change things (that won't blow up when interest rates normalise), we can expect this situation to continue.

Alex Morton is a senior research fellow at Policy Exchange


Alex Morton is a senior research fellow at Policy Exchange

Photo: Getty Images
Show Hide image

I'm far from convinced by Cameron's plans for Syria

The Prime Minister has a plan for when the bombs drop. But what about after?

In the House of Commons today, the Prime Minister set out a powerful case for Britain to join air strikes against Isil in Syria.  Isil, he argued, poses a direct threat to Britain and its people, and Britain should not be in the business of “outsourcing our security to our allies”. And while he conceded that further airstrikes alone would not be sufficient to beat Isil, he made the case for an “Isil first” strategy – attacking Isil now, while continuing to do what we can diplomatically to help secure a lasting settlement for Syria in which Assad (eventually) plays no part.

I agreed with much of David Cameron’s analysis. And no-one should doubt either the murderous barbarism of Isil in the region, or the barbarism they foment and inspire in others across the world.  But at the end of his lengthy Q&A session with MPs, I remained unconvinced that UK involvement in airstrikes in Syria was the right option. Because the case for action has to be a case for action that has a chance of succeeding.  And David Cameron’s case contained neither a plan for winning the war, nor a plan for winning the peace.

The Prime Minister, along with military experts and analysts across the world, concedes that air strikes alone will not defeat Isil, and that (as in Iraq) ground forces are essential if we want to rid Syria of Isil. But what is the plan to assemble these ground forces so necessary for a successful mission?  David Cameron’s answer today was more a hope than a plan. He referred to “70,000 Syrian opposition fighters - principally the Free Syrian Army (FSA) – with whom we can co-ordinate attacks on Isil”.

But it is an illusion to think that these fighters can provide the ground forces needed to complement aerial bombardment of Isil.  Many commentators have begun to doubt whether the FSA continues to exist as a coherent operational entity over the past few months. Coralling the myriad rebel groups into a disciplined force capable of fighting and occupying Isil territory is a heroic ambition, not a plan. And previous efforts to mobilize the rebels against Isil have been utter failures. Last month the Americans abandoned a $500m programme to train and turn 5,400 rebel fighters into a disciplined force to fight Isil. They succeeded in training just 60 fighters. And there have been incidents of American-trained fighters giving some of their US-provided equipment to the Nusra Front, an affiliate of Al Qaeda.

Why has it proven so hard to co-opt rebel forces in the fight against Isil? Because most of the various rebel groups are fighting a war against Assad, not against Isil.  Syria’s civil war is gruesome and complex, but it is fundamentally a Civil War between Assad’s forces and a variety of opponents of Assad’s regime. It would be a mistake for Britain to base a case for military action against Isil on the hope that thousands of disparate rebel forces can be persuaded to change their enemy – especially when the evidence so far is that they won’t.

This is a plan for military action that, at present, looks highly unlikely to succeed.  But what of the plan for peace? David Cameron today argued for the separation of the immediate task at hand - to strike against Isil in Syria – from the longer-term ambition of achieving a settlement in Syria and removing Assad.  But for Isil to be beaten, the two cannot be separated. Because it is only by making progress in developing a credible and internationally-backed plan for a post-Assad Syria that we will persuade Syrian Sunnis that fighting Isil will not end up helping Assad win the Civil War.  If we want not only to rely on rebel Sunnis to provide ground troops against Isil, but also provide stable governance in Isil-occupied areas when the bombing stops, progress on a settlement to Syria’s Civil War is more not less urgent.  Without it, the reluctance of Syrian Sunnis to think that our fight is their fight will undermine the chances of military efforts to beat Isil and bring basic order to the regions they control. 

This points us towards doubling down on the progress that has already been made in Vienna: working with the USA, France, Syria’s neighbours and the Gulf states, as well as Russia and Iran. We need not just a combined approach to ending the conflict, but the prospect of a post-war Syria that offers a place for those whose cooperation we seek to defeat Isil. No doubt this will strike some as insufficient in the face of the horrors perpetrated by Isil. But I fear that if we want not just to take action against Isil but to defeat them and prevent their return, it offers a better chance of succeeding than David Cameron’s proposal today. 

Stewart Wood is a former Shadow Cabinet minister and adviser to Ed Miliband. He tweets as @StewartWood.