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

Show Hide image

The biggest divide in politics is not left against right, but liberals against authoritarians

My week, including a Lib Dem membership rise, The Avalanches, and why I'm putting pressure on Theresa May over child refugees.

It is a boost for us that Nick Clegg has agreed to return to the front line and be our Brexit spokesperson. I hadn’t even had a chance at our meeting to make him the offer when he said: “Before we start, I’ve been thinking about this and want to take on the fight over Europe.”

With Labour apparently willing to give the Tories a free pass to take us out of Europe, the Liberal Democrats are the only UK-wide party that will go into the next election campaigning to maintain our membership of the EU. The stage is remarkably clear for us to remind Theresa May precisely what she would be risking if we abandon free trade, free movement, environmental protection, workers’ rights and cross-border security co-operation. More than a month on from the referendum, all we have heard from the Tories is that “Brexit means Brexit” – but they have given us no clue that they understand what that means.

 

Premature obituaries

Not long ago, the received wisdom was that all political parties were dying – but lately the supposed corpses have twitched into life. True, many who have joined Labour’s ranks are so hard left that they don’t see winning elections as a primary (or even a desirable) purpose of a party, and opening up Labour to those with a very different agenda could ultimately destroy it.

Our experience has been happier: 20,000 people joined the Liberal Democrat fightback in the wake of the 2015 general election result, and 17,000 more have joined since the referendum. We now have more members than at any time this century.

 

Breaking up is hard to do

Journalists have been asking repeatedly if I want to see the break-up of the Labour Party, with moderates defecting to the Liberal Democrats. I have been clear that I am not a home-wrecker and it is for Labour to determine its own future, just as I focus on advancing the Liberal Democrat cause. Yet I have also been clear that I am happy for my party to be a home for liberals of whatever hue. I enjoyed campaigning in the referendum with a variety of progressive figures, just as moderates from different parties shared platforms in 1975. It struck me that far more unites us than divides us.

That said, not all “moderate” Labour figures could be described as “liberal”, as John Reid demonstrated as Labour home secretary. The modern political divide is less left v right than authoritarian v liberal. Both left and right are looking increasingly authoritarian and outright nasty, with fewer voices prepared to stand up for liberal values.

 

What I did on my holidays

Time off has been virtually non-existent, but I am reading A Wilderness of Mirrors by Mark Meynell (about loss of trust in politics, the media and just about everything). I’m also obsessively listening to Wildflower by the Avalanches, their second album, 16 years after their first. It’s outstanding – almost 60 minutes of intelligently crafted dialogue, samples and epic production.

During the political maelstrom, I have been thinking back to the idyllic few days I spent over half-term on the Scottish island of Colonsay: swimming in the sea with the kids (very cold but strangely exhilarating ­after a decent jog), running and walking. An added bonus is that Colonsay is the smallest island in the world to have its own brewery. I can now heartily recommend it.

 

Preparing for the next fight

The odds are weirdly long on an early general election, but I refuse to be complacent – and not merely because the bookies were so wrong about Brexit. If we have learned one truth about Theresa May as Prime Minister so far, it is that she is utterly ruthless. After her savage cabinet sackings, this is, in effect, a new government. She has refused to go to the country, even though she lectured Gordon Brown on the need to gain the endorsement of the electorate when he replaced Tony Blair. Perhaps she doesn’t care much about legitimacy, but she cares about power.

You can be sure that she will be keeping half an eye on Labour’s leadership election. With Jeremy Corbyn potentially reconfirmed as leader in September against the wishes of three-quarters of his MPs, Mrs May might conclude that she will never have a better chance to increase her narrow majority. Throw in the possibility that the economy worsens next year as Brexit starts to bite, and I rule nothing out.

So, we are already selecting candidates. It is vital that they dig in early. As we are the only party prepared to make the positive case for Europe, such an election would present us with an amazing opportunity.

 

Sitting Priti

David Cameron pledged to take an unspecified number of unaccompanied children from camps across the Continent. I am putting pressure on Theresa May to turn that vague commitment into a proper plan. Having visited such camps, I have been fighting for Britain to give sanctuary to a minimum of 3,000 unaccompanied children, who are currently open to the worst kinds of exploitation. We have heard nothing but silence from the government, with underfunded councils reporting that they are not receiving the help they need from Whitehall.

Meanwhile, it remains government policy to send refugees to Turkey – whose increasingly authoritarian government has just suspended human rights protection.

As if all of this were not grim enough, we have a new Secretary of State for International Development, Priti Patel, who has said that she thinks aid should be used largely to promote trade. As someone who wants our country to be respected around the world, I find this plain embarrassing. Actually, it’s worse. It’s shaming. As with Europe, so with the world: the ­Conservative government is hauling up the drawbridge just when we need more than ever to engage with people beyond our shores.

Tim Farron is the leader of the Liberal Democrats. To join the party, visit: libdems.org.uk/join

Tim Farron is leader of the Liberal Democrats.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue