Mark White, managing director of Hampshire-based Bargate Homes, shares his thoughts with Show House on why the next government has to focus on placemaking and the needs of future generations.
We all want to see new homes built on vacant brownfield sites, but this needs to be balanced with fulfilling the huge pent-up demand for affordable and attainable housing in traditional villages and rural communities. Not everyone who has grown up living in the countryside wants to uproot to move into a city centre flat, simply to counteract the fact they are priced out of their local housing market.
Manifesto pledges and policy changes need to be relevant to today’s market and the housing needs of first-time buyers, those progressing on from shared ownership, growing families, separating and blended families, relocating grandparents and the disabled.
Part of the current planning problem is that it’s politically motivated at a local level, against a backdrop of a poor image of the new build sector. The industry and the HBF need to continue to collectively address this so that many more local people become minded to support future planning applications. Part L and the Future Homes Standard are creating a more level playing field regarding energy efficiency, but housebuilders must also be prepared to invest more in design, quality, architectural features, community amenities and placemaking.
During this next political cycle, politicians and the public need to get behind the clear advantages of living in a highly efficient new home. This change in mindset would knock out some of the NIMBY resistance that has got the UK to a position where only half the annual target of 300,000 new homes will be delivered during 2024.
Top-down housing targets and local plans with five-year housing land supply projections must be enforced across all local authorities. Adequately resource – and then give power back to local planning authority case officers. Naysayers need to be listened to, but ultimate decisions should be determined via a set of process-driven realistic rules that the industry can adhere to in order to obtain a planning ticket in a timely fashion.
The next Housing Minister needs to act quickly to eradicate all the barriers to pre-commencements. Section 106 negotiations should be concurrent to the review of a live planning application so that housebuilders don’t end up missing crucial ecology seasons – or go out of business because they can’t start on site.
The current government has persistently missed a range of opportunities which could have made a marked difference to the housing market, especially the crucial first rung. Green mortgages for homes rated EPC-A or B should be significantly incentivised. A commitment to net zero targets could be demonstrated by offering a stamp duty rebate for homeowners who retrofit eco-technology into their homes. Similarly, feed-in tariffs should be reintroduced for homeowners with solar panels, to reward people for supplying renewable energy back to the grid.
Labour’s new proposal to introduce ‘Freedom to Buy’ government-backed 5% deposit mortgages is positive, but this should be extended to anyone coming out of rented accommodation, rather than just limited to first-time buyers. This would acknowledge the fact that a move back to home ownership is just as difficult for those who have experienced a change in their personal and financial circumstances.
Will we see any manifesto pledges regarding the industry’s hope of the reintroduction of Help to Buy, given it generated a surplus back to the government for the best part of a decade? If housebuilders could build more homes, we could look towards generating more tax revenue. My fear is that any new initiatives could take five years to implement, which takes us towards the end of the next parliament!
As a case in point regarding the current crisis for the new homes industry, social rent increases are currently capped at CPI plus 1% up until 2026, but for the 2023-4 financial year, Jeremy Hunt capped the rent increase at 7%, which was below inflation. This has had a significant effect on housing associations’ recent appetite to acquire S106 homes, as their financial modelling doesn’t stack up. Corporate borrowing costs are high, the cost of delivering and maintaining a social rent portfolio has risen exponentially, and yet there is no way of reflecting this in the amount of rent that can be charged.
There is still a willingness from housing associations to buy new S106 homes as the demand is there, but the rent cap is impacting the proportion of the open market value rate that they are able to offer. Housebuilders – particularly SMEs – urgently need this situation to improve, as so many ‘shovel-ready’ sites are no longer commercially viable.
In other circumstances, if a land option agreement is in place, the developer can try and negotiate a reduction in the land value based on a lower affordable housing receipt. But this scenario can lead to the land being taken off the market. This situation has to improve if the UK is to start to deliver anything like the volume of new homes it needs.
The Labour Party’s rhetoric to build more affordable housing is commendable, but this could have a negative impact on rent, land values, and also developer profit – if a development is actually deemed viable. I await the major parties’ manifestos with interest and hope for some radical thinking.”
Bargate Homes is a wholly owned subsidiary of VIVID – Hampshire’s largest provider of affordable homes. Established in 2006, the company builds select developments in prime locations across Hampshire, Dorset, and West Sussex. Bargate Homes is currently delivering 300 homes per year across six live developments and has a pipeline of future sites expected to deliver in excess of 2,500 new homes.
