London Residential Research analyses the housing white paper


Nigel-EvansPaul Wellman

Nigel Evans, head of London Residential Research, and Paul Wellman, senior researcher, analyse the announcements from the housing white paper

Green belt

The government’s inaction on green belt is a missed opportunity. When commentators like myself call for more homes to be built on the green belt, we are not calling for ‘concreting over the countryside’. Far from it.

Take this example in Maidenhead. A vacant, disused car park site, just five minutes’ walk to a future Crossrail station lies empty. It is of course within the green belt. However, at the same time the local council – Windsor & Maidenhead – is selling a playing field, due to the demand for homes within the area. Having a blanket ban doesn’t work.

SEE ALSO: Playing fields to be built on due to green belt

With the ‘business as usual’ approach towards green belt, with it essentially being up to local councils to decide if they want/need to build on the green belt as they see fit, isn’t it time for government to step in, and act on local authorities who are quite frankly abusing the system?

The white paper states “green belt boundaries should be amended only in exceptional circumstances when local authorities can demonstrate that they have fully examined all other reasonable options for meeting their identified housing requirements”.

By selling off playing fields to build more homes, when disused car parks lie closer to the town centre (but happen to be green belt), haven’t Windsor & Maidenhead demonstrated that all other reasonable options for meeting its housing need have been exhausted?

The local MP for the area just so happens to be Theresa May. Do you think we need to depoliticise the green belt and its perceived vision of being ‘sacrosanct?’. I’d suggest we do.

How to increase delivery rate

The move away from the Cameron/Osborne ‘home ownership’ mantra at all costs is welcome, as large schemes with multiple tenures are at an advantage of being delivered more quickly, due to the absorption rate in the sales market.

The GLA is in fact leading the way, with many schemes, especially on land they own, now coming through the planning system with this multi-tenure approach. Take the Brunel Street Works, E16, scheme for an example.

The tenure split is roughly equal between private sales (339), private rent (293) and affordable (343). As well as that the scheme is a joint venture between Thames Valley Housing, Galliford Try, Linden Homes and Fizzy Living.

SEE ALSO: Opal eyes multi-tenure gem in Canning Town

Accelerated construction

From the white paper: “The government is taking direct action through the Accelerated Construction programme. We will help diversify the housebuilding sector and see homes built quickly by partnering with small and medium-sized builders, contractors and others to build out surplus public sector land.”

This is of course welcome, too often, large planning consents are held in single ownership. This gives a monopoly to a developer, who is free to drip-feed homes on to the market, as and when it suits their business model. Competition however, can speed up the delivery of homes.

SEE ALSO: Split large sites up to increase supply

Take Millbrook Park for example. In 2011 the local council, Barnet in a joint venture with Annington Property and VSM Estates secured planning for nearly 2,200 homes. Around half of the homes have already been delivered by multiple developers as plots have come forward for development opportunities. Phase 10 is currently on the market through Knight Frank.

This scheme simply would not be this far down the line, if it was for this innovative model. Why is it not replicated more often? Splitting large sites up, and selling plots on surplus public land to multiple builders is surely the way forward. Sajid Javid’s nod to diversify the house-building sector can only be a good thing, which will see homes built more quickly.

Increase supply

Some may argue that an increase in supply would automatically lead to an increase in affordability, we at LRR would beg to differ.

Our recent research clearly shows that there were more construction starts in the capital at the end of 2016 over 29,000 private units and more private units under construction, more than 52,000 units than at any point in the last two decades.

Has this led to a fall in house prices? No it has not. The average price of a home in London is £400k, the median wage in the capital is around £33k. What we have here is a question of affordability.

At the end of 2016 there were more than 180,000 units at permission, up by 4,000 units from the previous year and the highest we have ever witnessed in the capital.

More affordable homes?

For an increase in supply to lead to an increase in affordability there has to be a degree of subsidy in the form of S106 payments for affordable housing. However, despite the increase in the number of private starts, affordable housing provision has fallen way short.

The shortfall in expected social housing starts has been on the increase since 2012 from a mere 3,660 units in 2012 to a massive 13,686 units in 2015.

Although there has been an increase in commuted payments in lieu of actual provision LRR calculates that between 2012 and 2015 there was a shortfall here as well, to the tune of  £1.2bn.

Ways to increase affordability

Some market commentators have suggested the following:

1 Break the link

Link housing association house prices with the cost of living rather than the cost of private sector housing. Houses used for their primary purpose rather than for capital growth.

Effect: Stop the rampant growth in house prices.

2 What’s in a name?

Affordability should mean affordable housing that is at a cost low enough for Londoners to afford, determined with regard to their household income. Means tested rather than fixed discount ranges.

Effect: You pay what you can afford. Click for an example

3 Power to the people

Allow self-build on publicly owned  land. Land is sold at a heavily subsidised rate but if you sell you only get back the build cost and the sale must be to the local authority which may then sell or rent out the property. The allocation of land is means tested.

Effect: Empowerment, community building.

Development opportunities

With the government’s reluctance at looking at the green belt for increasing development opportunities, it is clear our cities need to densify.

Especially when comparing against other European cities like Madrid, Barcelona and Paris, there is clear room for improvement. For context London has 100 inhabitants per hectare, whereas those mentioned above equate to 360, 340 and 220 respectively.

As the white paper states: “Not all development makes good use of land, especially in areas where demand is high and available land is limited.”

SEE ALSO: Unlocking riches from self-storage sites

It goes on to state, government will propose to amend the NPPF to make it clear that plans and individual development proposals “should address the particular scope for higher-density housing in urban locations that are well served by public transport (such as around many railway stations); that provide scope to replace or build over low-density uses (such as retail warehouses, lock-ups and car parks)”.

As examples go, the innovate plans by Access Self-Storage to provide mixed-use developments where self-storage is buried in large three-storey basements with build to rent residential schemes above is a good showcase.

Further details on the Access Self-Storage plans for over 100,000 sq ft of warehousing, plus 63 private rental homes in Streatham can be viewed here.

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