Thu 1 Nov 2007
Ten a penny?
With the housing crisis finally being given the attention it deserves with a raft of government policies and potential policies, the question is are any of them actually going to succeed? Jon Neale - with a little help from those at the coalface - rates their chances.Housing has not been as high up the political agenda since the 1950s, when Labour and the Conservatives exchanged boasts of how many homes they would build over their period in power, if only they were to be elected.
Admittedly, Gordon Brown has yet to match Harold McMillan, Tory prime minister in that decade, who once boasted of building 300,000 new homes in one year, but the urgency of increasing the supply of new homes has obviously impressed itself upon the current occupant of Number 10.
The Barker Review - which Brown commissioned almost four years ago as chancellor - has been followed by string after string of initiatives, policies and suggestions aimed at getting more houses built, cumulating in the recent Housing Green Paper. But how likely is each to be a success? We asked industry commentators for their opinion on ten of the most recent policies.
1) Housing and Planning Delivery GrantMooted in 2004's Barker Report, this new measure was first announced by ministers last summer as a means to provide some financial reward for local councils who managed to hit their new targets for new-home building, and was confirmed in the white paper.
It will provide extra funding to councils conforming to agreed 'development timetables' setting out clear plans for the number and type of houses needed. To qualify for a slice of the funds - which will amount to £500 million when the Housing and Planning Delivery Grant (HPDG) is launched in 2008 - councils will also have to identify five years' worth of sites ready for housing, together with a ten-year pipeline for later development.
John Slaughter, director of external affairs at the Home Builders Federation (HBF), says that his organisation has always backed the principle of the HPDG, but has concerns over how the government will measure housebuilding delivery.
He adds: "Buildouts can vary for different reasons, and the market conditions can change. We need to see the full detail to decide whether it will work in the way we want to see."
Chances of success: 7/10
2) The National Housing and Planning Advisory Unit
Another Barker suggestion, the catchily-named NHPAU was also taken forward last year. Headed by distinguished economist Stephen Nickell, its remit is to advise the government and local councils on the how many houses should be built - and in which regions - if the long-term ambitions for affordability are to be met. It has already hit the headlines after suggesting that, if nothing is done, prices will be ten times the average income by 2026.
Slaughter says that, as with the HPDG, the HBF has always supported this measure. "It will be helpful in providing a good database and suggestions about how to tackle housing affordability in different parts of the country. Having the right data is a key requirement.
"But they have quite a tough job to keep the focus on the right areas. The issue will be how they continue to maintain a quality input and engage with all the different regional and national stakeholders."
Chance of success: 8/10
3) Five new 'eco-towns'
Gordon Brown originally announced his intention to develop five so-called 'eco-towns', containing a total of around 100,000 new homes, during his leadership campaign. Built on brownfield sites - the first, Northstowe, is already under way at the former Oakington Barracks in Cambridgeshire - they will, at least in theory, be exemplars of green development. The aim is to use cutting-edge low- and zero-carbon building methods while providing quality public transport systems.
Commentators have queried how new the concept is, given that Northstowe and similar projects were already underway - some of which have failed to live up to the high environmental aspirations originally set. There are also similarities with the new towns of the 1950s and 1960s.
More cynical observers have labelled it an attempt to "greenwash" the need for new homes and upstage the Conservatives on the environment.
Chris Coates, managing director for Galliford Try Homes in the south-east and London, is not completely doubtful, however. He says: "It is an incredibly exciting opportunity, and we have to react to that. I don't know if the technology is there yet, however. There will also be painful lessons along the way.
"Look at Milton Keynes - it's a success in some ways, but you cannot say it is a place of character, an aspirational place, because of the mass production used. These towns need to be architecturally designed, and the developers chosen afterwards."
Chances of success: 5/10
4) All homes to be carbon-neutral by 2016The government announced last year that it would steadily tighten building regulations over the next few years, with all new homes becoming carbon-neutral within the decade. This has proved the most controversial of the recent package of proposals, with developers arguing that the target is unachievable and the costs astronomic. Jonathan Kingerlee, chairman of eco-developer Kingerlee Homes, says he believes more emphasis should be placed on the building envelope rather than the expensive and inefficient microgeneration equipment required to reach zero-carbon status. He says: "Even if all housebuilders' combined annual profits of approximately £2 billion were redirected towards building more sustainable homes, the average code level for all new homes would not even be lifted from Level 1 to Level 2 under the Code for Sustainable Homes.
"Another challenge is the housebuilding sector's ability to create buildings that perform to the highest standards achieved throughout Europe, when the culture and skills base has moved on little since the Second World War."
Chance of success: 2/10
5) 200,000 new homes on land owned by the government or local councils - by 2016
Whether or not the eco-towns are as green as they should be, the government has also vowed to build 200,000 new homes on public sector land - an increase on the 130,000 announced in last year's pre-budget report.
The government's sale of public sector sites to developers has proved enormously popular, with most of the big housebuilders pitching for business alongside niche developers. It is likely that, with the right management, this will continue.
Liam Bailey, head of research at estate agents Knight Frank, says: "This target is achievable. The reality is the incentive is in place for developers as well. Over the last five years public bodies and regeneration agencies have become a lot more au fait with how the development market works, and how developers like to receive land. A lot of lessons have been learned over the past few years."
Chance of success: 9/10
6) The New Homes AgencyThe government first announced at the beginning of the year that it would merge the Housing Corporation and English Partnerships into one body responsible for housing and regeneration. It was originally going to be called Communities UK, but now ministers have decided to call it the 'New Homes Agency'. It will have a remit of increasing housing supply, regenerating urban centres and disadvantages estates, and providing strong and stable communities - and will have a budget of £4 billion. Although housebuilders and developers can see the wisdom of the single-agency approach, many have already questioned whether the move should be made at the precise time when increased delivery has become so important.
David Pretty, former chief executive of Barratt and chairman of the New Homes Marketing Board, says: "I think there will be both advantages and disadvantages. It will be powerful and there should be streamlining of procedures, to everyone's benefit."
"There are worries that the organisation could be too big and unwieldy, but my main concern is short-term: at a time when the government is urging housebuilding, the major agencies will be locked in a protracted process of merging, which the government has said will take at least two years to complete."
Chance of success: 5/10
7) Growth points
Earlier this year, housing minister Yvette Cooper announced that 29 areas across England had come forward with applications to be 'growth points'. For example, Birmingham and Solihull will provide at least 40,000 homes by 2016, whereas Norwich will provide 15,950. Rural towns such as Truro, Shrewsbury and Thetford are also included in the scheme, and the government has recently invited cities and towns in the north to come forward with proposals.
HBF head of external affairs John Slaughter welcomes the move, but says: "It is another way of rewarding authorities that want to grow, but there is a basic question about what to do with authorities that don't want to cooperate. It is a reasonable policy for a specific issue, but it is certainly not a blanket solution."
Chance of success: 7/10
8) Local housing companies
One of the more radical proposals in the Housing White Paper was the suggestion that councils should engage in joint ventures with developers (and other private sector bodies) to get housing - particularly shared-equity and "homes for first-time buyers" - built on surplus land in their areas. The government believes this could provide at least 60,000 homes, and has set up 14 pilots right across England.
The HBF's John Slaughter says: "They are extremely interesting. Councils could be the lead or proactive partner in delivering housing in their areas, which makes sense. It will also help deliver mixed communities, rather than the monolithic council estates of the past." But again, it will depend on councils' willingness to see more houses built in their area.
Chance of success: 6/10
9) More affordable housing
In the Housing Green Paper, the government vowed that at least 70,000 new affordable homes would be built each year by 2010/11 - including at least 45,000 new homes for social rent and 25,000 new shared-ownership units. It has also pledged £230 million to deliver 6,300 affordable homes in rural towns and villages.
James Pargeter, partner in the residential projects team at surveyors Drivers Jonas, says that the availability of government grant - a result of a wider public sector spending squeeze - will be a problem. He adds: "Most housing associations are not going into the next funding round with as big a provisional programme as they have done before." Shared-ownership properties - which are more viable without grant - are likely to increase as a result.
Galliford Try's Coates is sceptical over whether rural housing needs will ever be satisfied. He says: "The problem with central government targets is they struggle when they get translated down to the local level. Rural housing in the south-east will be a problem until you get a councillor standing up and saying that his children can't afford to live in the village."
Chance of success: 5/10 for social housing; 8/10 for shared-equity housing
10) Three million homes by 2016
This is, of course, Gordon Brown's big promise to both first-time buyers and housebuilders, one that bought the housing crisis to the front page of the national newspapers. Most commentators believe it is a realistic target, but the government will have to succeed in its attempts to transform the planning system and win Nimbys in the south-east over to the cause of new housing.
And, of course, for it to be achieved most of the initiatives listed above will have to work - leaving aside the deeper question of whether even three million new homes is enough to satisfy England's ever-escalating housing needs.
Chance of success: 5/10
First published in Show House Magazine November 2007.
The greatest care has been taken to ensure accuracy but some information contained within this article may have changed since it was first published.
Have your say and comment on this article