The Labour government is committed to delivering 1.5 million homes over the course of this parliament. It is an ambitious intervention into the UK’s housing market. Much of the public policy discussion has focused on how to change planning laws, reclassify some land as “grey belt” and build on parts of the green belt. However, there are other approaches too.
This was the focus of a recent roundtable discussion hosted by the New Statesman with Velux, answering the question: “How could a focus on existing housing stock and densification help the government achieve its housing target?”
One participant said that delivering 1.5 million homes in five years would require looking at “all elements of the market, all elements of delivery” and involving public and private sector partners. She said that planning reform was just one part of the puzzle, and that in addition to building housing, “we’ve really got to think about the communities that we’re creating as well and what works.” She added that there has been a “cultural mind shift” around high-rise and leasehold homes, particularly since the Grenfell fire in 2017.
Another attendee said the target of 1.5 million homes was not the key issue. “The point is, can we solve two social problems; social housing for people in temporary accommodation and other things and people on low incomes; and getting people on the housing ladder,” he said. He added that the previous government should have kept mandatory housing targets and been “tougher” on councils that did not bring forward local plans, and that he agreed with the approach to environmental regulation adopted by the current government. “This is about the society winning, and clearly delivering more homes is part of that,” he said.
However, he was sceptical of classifying land as “grey belt”, which he felt was a “Trojan Horse” for building on the Green Belt. “I think fairness has to be built into this. If you’re talking about a 50 per cent uplift in delivery, yet you see mainly rural areas getting 100 per cent uplift, and urban areas get 15 per cent uplift, that’s wrong,” he said.
One policy change that he would like to see is lifting the restrictions on pension funds owning residential property, as this often leads to flats above shops that are owned by a pension fund being left empty.
“It’s not just a numbers game. We have to build quality. We have to build efficiently in the land and space we have, but also we have to design places that people want to live in,” said another speaker. For him, one of the solutions is better enabling existing homes to be extended and renovated to meet the needs of people, particularly families, without having to move. These homes, if built to a good quality, also have a positive impact on the health and life outcomes for the people who live in them.
“I think where we fail in this sector is actually our house builders don’t use architects. They don’t design well. And the problem with that is it’s really inefficient,” he said. Further to this, the presumption when talking about densification is that it is about building high rise, whereas there are other ways to make housing development denser. “You can build some beautiful houses three stories. You can double the density, and you need half the space,” he said.
A speaker set out the findings of a recent report on housing. In particular, they found that the public wants brownfield and empty homes brought into use before using green space. According to the report there could be 1.2 million homes delivered on brownfield sites, 1.4 million homes on sites that have planning permission but have not been built out, and empty homes that could be brought back into use. She added there was also the potential for 165,000 homes to be created by converting commercial property and 20,000 from publicly-owned buildings.
One of the largest potential ways to make more homes available, she said, was to bring some of the UK’s 26 million spare rooms into use by turning them into spaces for lodgers. “There’s an enormous amount out there before you need to start building the countryside,” they said. Another person pointed out there are around 11.6 million “lots” of land available next to homes that could be used to extend them, while someone else added that conversions and extensions still need to ensure quality.
A participant felt that stronger action was needed against landbanking in order to ensure that homes with planning permission are built, rather than delayed by developers seeking to maximise profit. “They’re waiting for the price of the land to go up, which makes them unaffordable for young people and for affordable housing,” he said. The speaker agreed that the “grey belt” was a Trojan horse for development that he feels is not sustainable and does not have the necessary infrastructure.
An attendee said it was important to work with the economic geography as it is. “Rents are least affordable in the southeast and core cities like Bristol and York. And that’s also where we get the biggest bang for our buck in terms of new housing,” he said. He added that empty homes are a “red herring” as many are not in areas with enough jobs, which reduces their appeal. By contrast, Oxford has a high number of jobs compared to homes, which raises the cost of housing. This means densification is a key policy.
“We know a 1 per cent increase in housing stock can lead to a 2 per cent decrease in rent,” he said. “In Knightsbridge, Belgravia and Hyde Park, 35 per cent of the properties have got two or more unoccupied bedrooms. In Bermondsey, where there’s a high concentration of social housing, it’s only 10.7 per cent,” said one person, noting that council tax could be used to create an incentive to downsize. They said, “in the 1980s, of the homes that were delivered, 40 per cent were by small and medium enterprises, now it’s 10 per cent. “He added: “There needs to be a rebalance of the market, and there needs to be support for the smaller companies.”
“One of the reasons we’ve seen diversification decline is because we’ve made it harder for smaller builders and smaller companies to operate in an increasingly complicated and complex system,” said one attendee. He rejected claims of landbanking, saying that there is no evidence of it in studies commissioned by government.
One speaker expressed his concern that “everything has been hung on deregulation and planning, as if planning is the only problem.” He pointed out that the capacity of the planning system needs to be expanded, meaning more planners are hired in
order to ensure excellent design and quality.
One person said the proposed planning reforms were still quite modest. What he wanted to see was a stronger emphasis on building homes for social rent, pointing out that in the 1990s 87 per cent of new affordable homes were social rent and in 2022 that figure was 15 per cent. “In terms of a local government perspective, reforming the housing revenue account is so important, because only councils and housing associations are going to be able to build genuine social rent homes,” he said.
“Viability is almost non-existent across most of the country,” said a participant. The challenge is that, for her members, the money they want to invest in homes is being asked to do too many things at once. “It’s being asked to build the home for rent. It’s being asked to deliver social homes. It’s being asked to deliver infrastructure,” she explained.
There was, however, optimism in the room together with an acknowledgement that there was no simple answer. “By the end of the parliament, we could be building 400,000. I feel comfortable saying that, and then we could see what would happen over a ten-year period,” said another attendee.
“We’re starting to see a new breed of developers coming who are social minded,” said a speaker. “They’re working with local contractors. They’re using modern methods of construction (MMC), like off-site manufacturing, so they can build at scale. They’re building simple models. They’re working with great designs, and we’re helping them do that,” he said.
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