Housing white paper: clear direction, fuzzy on the detail

Mark-Prisk-THUMB.jpegThe much anticipated housing white paper has had a mixed response. Some people wanted more details, others wanted more money. To be honest, neither seemed likely to me. Rather this white paper has confirmed the new direction of Theresa May’s administration. So what does that mean in practice?

First, the tone and contents of the white paper are more pragmatic and less doctrinal. The 2015 Conservative Party manifesto had struck a loud ideological note for home ownership, whether in the form of Right to Buy or the notion of starter homes. Tenants and their needs were not so readily promoted.

The new ministerial team has sought to rebalance that approach, believing – as I do – that we should help both buyers and those who rent. So starter homes are one of several policies, not the whole story; housebuilding is encouraged across all tenures; and the need for longer, more family-friendly tenancies is clearly endorsed.

The precise details of quite a few of these policies are still subject to ongoing discussions with local government and with the property industry. Hence the sense among some of unfinished business.

Carrots, not sticks

Second, the nature of proposed interventions are about encouraging and incentivising, not about Whitehall diktats.

So the white paper talks of enabling planning departments to expand and upskill; supporting housing associations to build more; encouraging institutions to invest more; and removing red tape or processes which hold back building. 

There are some sticks, such as the new housing delivery test for councils, but they are the exception. That is not say that ministers should rule out compulsion where it is clear a council or landowner is persistently refusing to up their game. However, compulsion is usually best held in reserve, not least because of the unintended consequences that often arise.

Need to innovate

Third, there is now an onus on local councils to think outside the box in seeking to deliver more homes people can afford. Just waiting for government to bail them out won’t work.

Some councils understand this. They are using their land holdings to help deliver lower-cost schemes and so lower rents. Others are being collaborative in the way they work with the private sector to deliver discounted market rents across new build-to-rent schemes.

Yet there is room for far more innovation, by both local and parts of national government. I personally think that the reform and amalgamation of local government pension schemes could help create large funds able to invest at scale. We also need to look again at the way the Public Works Loan Board operates.

Government’s role here should be to encourage and reward best practice, regardless of which party is running the council.

But what about Granny?

For me, therefore, the white paper is a useful framework for creating a larger, more diverse and competitive housebuilding market. I welcome many of the measures on speeding up construction; the funding for smaller builders; enhancing skills and promoting modern methods of construction.

However, if there is one policy omission it is the need to address the sluggish nature of the housing market. The volume of transactions, according to Savills, is running at a fraction of average levels in the years before the 2007 downturn.

In particular, we know that more than 1.5m single elderly people are living in large family homes. Many of them would like to move but haven’t, resulting in an acute shortage of such homes in some areas of the country. Addressing the causes of this would unlock far more family homes than the housebuilding sector could ever deliver in a single year.

It would mean reforming parts of both planning and building regulations, overhauling the equity release market and reducing transaction costs to encourage more people to move. It would also mean grappling with social care policy. So it’s not simple.

However unlocking even a quarter of these homes for families could make a huge difference for the housing market and for all the generations.

Mark Prisk is an MP, former housing minister and member of the CLG select committee

Click here for more news, views and analysis covering the 2017 housing white paper.