Opinion: Good news on affordable housing, but spare me the house builders’ crocodile tears – their share prices have doubled

Winning an extra £300m from the Treasury for affordable housing and tackling empty homes is good news by any standard (well done, Andrew Stunell, and thanks for all you did at DCLG). Moving forward on the £10 billion government guarantees for infrastructure spending is positive too. And if the Montague Review to encourage private renting is implemented, that’s proof patience can be rewarded…. I spent ten years on the London Assembly calling for both Labour and Conservative mayors to act. Back in June I had put housing at the heart of a four-point plan for a sustainable recovery. So it is great to see this issue come to the fore.

But forgive me for not believing the crocodile tears from developers about how they can’t afford to start work on ‘commercially unviable’ sites. The Times just revealed they’ve been quietly squirreling away land banks big enough for a quarter of a million homes. Not unviable, so much as slightly less massively profitable. Just look at their share prices. They’ve doubled over the last year even before the boost this announcement gave them (Taylor Wimpey up from 30p to 54p; Barratt up from 76p to 150p; Persimmon up from 425p to 700p). Yes, doubled. Not bumping along the bottom, like the rest of the economy.

So no, I don’t believe they need releasing from planning controls. In fact bypassing existing section 106 agreements won’t just cut the amount of affordable housing constructed. It also cancels infrastructure like schools and hospitals that make their rabbit hutches at least half-way decent places to live.

More ominously, central government threatens that “poor performing” planning departments will have their powers striped from them, so developers can “by-pass” them with fast-track permissions. Yet these are Labour-run authorities. If they are failing, they need exposing, not sidelining. This attack on local councils is totally Tory-inspired and thoroughly illiberal and undemocratic, so let’s say so – and lay the blame for inaction at the door of the two Eds, Milliband and Balls.

At least Nick Clegg’s official Lib Dem press release didn’t mention that aspect. But it did champion extending Permitted Development Rights. I’m sorry, but I see that as an anti-localism measure, and poor politics to boot – for every one happy home owner able to put up an inappropriate extension, won’t countless neighbours will be up in arms at the trashing of the neighbourhood?

So what should be done?

On the planning, we have to go local, allowing more flexibility and freedom to councils – not becoming mini-me to Conservative and Labour centralisation.

On the housing, we won’t get the housing built by rolling out the red carpet to the private developers. The Decent Homes policy paper being debated at Brighton sets out the way forward, with plans for 300,000 new homes (Disclaimer: I was a member of the working group.)

On the economics, the British Property Federation acknowledges some one has to buy and rent these new homes. Without a wider stimulus package, where is the demand coming from? Even George Osborne hasn’t the chutzpah to claim this announcement is that.

And on the politics, at the half-way point in this coalition Parliament, we still haven’t found a way as Lib Dems to trumpet the good things the government does AND make abundantly clear where we disagree or think more should be done. Sure, we’ve moved from the Rose Garden strategy of ‘owning everything’. But we must now move further and take a leaf from the Tory right-wingers’ book. The backbench Parliamentary Committee chairs must speak up for Lib Dem policies where these differ. Great George Street press releases must promote party positions, not simply echo the Whitehall line.

Call me naïve maybe, but it’s more than half way to the general election and only months away from the next locals. Isn’t it time we developed the distinctive, independent Lib Dem platform that voters can judge us on, as a party and not just a partner in government?

* Mike Tuffrey is a former councillor and London Assembly member, works in the field of corporate sustainability and is a trustee of the New Economics Foundation.

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13 Comments

  • Geoffrey Payne 7th Sep '12 - 12:53pm

    Excellent article. A massive house building programme is excellent news, just what is needed, but I am shocked having read this article at what comes with it.
    Another attack on localism, another example (after Free Schoolsa nd Academies) of the gentleman in Whitehall knows best. I am beginning to think I should compile a list…

  • Those corporate donations from the construction industry to the Tory party have certainly paid dividends.
    That is how it works, isn’t it?
    Donations are made to political parties are repaid with mega interest either directly from the public purse or through changes to the Law.
    You’d think there would be a law against it.
    But that would not be in the political parties’ interests, would it?

  • Oh yes, while I am at it… am I the only person who thinks giving a load of money to builders isn’t going to make everything better?

  • LondonLiberal 7th Sep '12 - 2:58pm

    Mike, as sone one who works in London local government housing and planning, I must say I agree 100% with everything you have written. You are spot on about developers’ profits and land banks . In fairness to them, I’m prepared to believe, to an extent, their need for a pipeline, but I am not prepared to listen to their crocodile tears of poverty when their profits this year have, in some cases, tripled from 2011. You are spot on about the non-affordable housing supporting infrastructure that it looks like the govt is prepared to drop from s106 agreements. Yet this same govt is keen to get communities to support development by asking councils to give them a proportion of CIL. How does dropping infrastructure requirements in s106 get community support?? And the planning issue is mad. How much will
    It cost planning departments to enforce otherwise illegal extensions? And what impact will the policy have on back garden ‘beds in sheds’? The only benefit is that householder application fees don’t actually cover the cost of processing the applications, so it may end up saving councils money! Maybe.

  • Appalling that we have now got a “too rich to mix” mentality coming in.

    Commitment to low cost housing has already been something that small developers have been able to swerve or buy themselves out – in my local area, small developments already require no low cost element.

    And now this has been extended to the likes of Wimpey, so that the hoi poloi can be kept out of sight of “nice” people??

    Give me a break

    Excellent article btw

  • Mike

    LGA Lib Dem Group briefing note can be found here: http://libdemgroup.lga.gov.uk/lga/aio/22216989

    Agree with you!

    Rob

  • The “land banks big enough for a quarter of a million homes” don’t look quite as big as you would like to make out, particularly in the context of the “plans for 300,000 new homes”, and that in England we build circa 150,000 homes per year, so that land bank actually represents a cushion of about a year. It also it should be remembered that significant amounts of that land is actually productive farm land that the builders are speculating on.

    I’m not trying to defend the construction industry, only to point that as we are dealing with large numbers, it becomes even more important to maintain a level head.

    If the government really wanted to get the economy going again, it would use the £10bn to guarantee exports. Building houses provides few graduate jobs and certainly doesn’t produce any goods and services that we can export.

  • The economy will recover, and the jobs created, largely through the efforts of SMEs… and that applies to the building sector too. Please don’t look at the profits of the big boys and assume that cascades on down to the smallest, it certainly doesn’t. Local Planning Authorities need to be given the powers to inspect the ‘viability’ of any project, so that where a proposer claims that the s106 demands make the proposal unviable it can be looked at and assessed. But however big or small you are, and whatever you trade in, you are not going to trade and survive unless you make a profit, that is the reality. If the difference between whether the project proceeds or not depends on the % of affordables being demanded then someone has to make a political decision, and that decision is best made locally. If the difference between the redevelopment of a building to residential, or the demolition and replacement with something new, is the VAT there again that could be locally decided, by the grant of an exemption certificate where the building has some intrinsic value.

  • Helen Dudden 9th Sep '12 - 12:24pm

    I know, I have been complaining here in the west country for years on the problems in Bath. Homes that still do not live up to the Decent Homes that comes with the Housing Act. Cold expensive homes, a few are getting new homes, but there is a large shortfall for those need property. Private renting is similar to the cost of London, very expensive and short lived, I think it is not fair to ask a family to have a home for six months, only. Deposits, the stress of needing to be aware that you could need to move, after the set time.

  • Helen Dudden 10th Sep '12 - 12:26pm

    Hello Mike, yes I will a look, the subject of Decent Homes also private renting. Decent Homes improvements has to be funded by the housing trusts themselves. I think we should improve on the what we have, some of the housing is not worth improving. Building standards change as you know, and even social behaviour can be improved in this way.

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