The Prosper UK Housing Commission, a group of industry experts chaired by former Housing Minister Gavin Barwell, has published a new report that aims to increase both demand and viability.
The report, titled ‘Solving the housing crisis: A plan to make homes more affordable in every postcode’, finds that housebuilding is being held back on two fronts, and that both have to be tackled together. Weak consumer confidence means builders cannot sell the homes they are already building. And with costs rising while prices stay flat, many schemes with planning permission are no longer viable.
The government recently announced its Your First Home scheme to support first-time buyers purchase new homes and boost demand, while the Conservatives pledged to reform Section 106 at its party conference in a bid to address viability. The Commission says that its report goes further than either party, setting out a package that tackles demand and viability together and adds measures to increase supply.
Gavin Barwell, chair of the Prosper UK Housing Commission, said: “I’m pleased that even before the report is published, the government has adopted one of our recommendations and the Conservatives have said they would implement another, but our recommendations are not ‘Pick N Mix’. Boosting demand without increasing supply will help a few people at the expense of everyone else, and tackling viability without tackling demand will make little difference. That is the view of the diverse group of industry experts who produced this report.”
The Commission’s recommendations include:
- On viability: a freeze on new regulatory burdens for at least three years, a two-part test for every obligation on new housing (whether the cost belongs on new homes and whether it is proportionate) and limiting Section 106 to what a development itself needs
- On demand: a temporary, strictly targeted shared equity scheme for first-time buyers of new, energy-efficient homes, capped at around a fifth of sales on each site and funded by an industry access fee
- To increase supply further: a National Planning Service to decide major applications and a national review of the Green Belt, keeping land that stops towns and cities sprawling and merging and releasing the rest; and higher density as standard, with more homes on each site
- On renting: cutting stamp duty on Build-to-Rent developments, a standard national template for their Section 106 agreements and ruling out rent controls in law to restore investor confidence; and a Public BtR programme pairing public landowners with BtR developers to build more homes for the social rent sector
Prosper UK was set up with the aim of getting the UK growing again and to be honest with voters about the difficult choices that takes. The report argues that building the homes the country needs is central to unlocking economic growth, and that people buying new homes should not have to pay for problems that belong to everyone.
Gavin Barwell added: “Despite its welcome reforms of the planning system and funding for affordable housing, the government is falling far short of its ambition to build 1.5 million homes in five years, and the latest figures, particularly in London, are little short of catastrophic. The victims are all around us. A few are sleeping rough, but most are hidden, stuck in temporary accommodation or unable to buy a home as their parents did.”
“Our housing crisis has been building for nearly 50 years and there is no silver bullet. Some of what we recommend won’t be popular, but unless we attack the problem from every angle it will only get worse.”
Lucian Cook, a member of the Commission and Director of Residential Research at Savills, speaking in a personal capacity, said: “There is no quick fix for the UK housing market, but there is still plenty that can be done to address the issues. A bold holistic view is needed more than ever, if we are to look to deliver more homes throughout the economic and political cycles and make more efficient use of the homes we already have.”
Richard Cook, a member of the Commission and Chief Development Officer at Clarion Housing Group, speaking in a personal capacity, said: “There is no silver bullet to fix the housing crisis. It needs all ideas and policies to be considered, and the work we have done with Prosper UK provides more solutions that, if implemented, will make a significant difference in meeting the challenge.”
