Planning Restrictions Are Driving Us To Extremes

Almost everyone in the UK agrees that we need to build more houses, indeed many more houses, if we are to provide adequate, and affordable, housing for those who need it.  Last year we built 140,000 new houses, but it is generally agreed that we need at least 250,000 new houses a year.  All of the major political parties have made housing an important part of their platforms in the current UK election campaign, and they have ‘promised’ to build an extra 200,000 to 300,000 houses a year during the next parliamentary term.

However, almost everyone is also agreed that we have to build all these houses within existing planning constraints, which in practice makes it very difficult to exceed the rate of 100,000 to 150,000 new builds that we have been achieving over the past decade.  In other words, there can be no relaxation of existing planning constraints, which make it virtually impossible to build on green belt land or in other greenfield areas around major cities where people actually want to live.

Instead, our political leaders, the media, and the think thanks that feed them with ideas are, with a few honourable exceptions, promoting a variety of well meaning but unrealistic solutions to our housing problems.  The solutions they are peddling will simply not result in the necessary increase in the number of houses that we desperately need.  This is quite tragic, really, because there is a real risk we will spend another parliament finding out that the solutions now being considered do not work in practice.

Maximise building on brownfield land

Everyone seems to be agreed that we must maximise house building on brownfield sites.  This is all well and good, but a lot of brownfield sites are simply not suitable for houses.  There are many new developments immediately beside railway lines.  I happen to enjoy watching trains go by, but a lot of people do not.

I recently travelled in a minicab to Heathrow.  The driver took us through the Chiswick Roundabout in west London, where I was surprised to see a ‘luxury’ development of houses within feet of the edge of the roundabout and almost directly underneath the M4 flyover.  Such a location cannot be healthy for the people who will eventually occupy those houses.

Help first time purchasers with subsidised ISAs and special grants

The Tories have introduced a new type of ISA, which will be subsidised so long as the savings are used for deposits by first-time purchasers.  They are also promising to subsidise purchases by first-time purchasers of up to 200,000 new houses if they are re-elected.  Neither of these measures will do anything to increase the supply of houses – if anything, they will increase prices even further.  As will the Tories’ promise to force housing associations to sell houses at a discount.

Impose rent controls

The Labour party is promising to impose rent controls if it forms the government after the election.  I am in favour of increasing the security of tenants by increasing the duration of tenancies and providing some protection from rent increases during the term.  But full-on rent controls would simply reduce the supply of rental properties and result in landlords skimping on maintenance.

Build garden cities

There is much enthusiasm for the building of new ‘garden cities’.  But what is the timescale?  It appears that it would take between 20 and 30 years to actually get these built, even if it is possible to obtain planning permission in the face of opposition from residents of the areas concerned.  Also, even if such cities are established, many of the new residents will have to travel on long-distance trains to their work in London and other cities.

Expand long-distance commuting

The FT columnist Simon Kuper suggested in a recent article that we could solve London’s housing problems through a massive expansion of high-speed rail lines like HS1 and HS2.  At first I thought his article was tongue in cheek, but it seems he was quite serious.  Just imagine the environmental impact of many new high-speed rail lines, plus the time to build them and the enormous cost.  To say nothing of the high commuting costs for travellers and the time waste of commuting.

Restrict immigration

Many people say there would be no housing shortage if we could simply stop immigration.  Apart from the fact that this would require the UK to leave the EU (which I happen to be against), this would do nothing to alleviate the present shortage of houses.

Encourage elderly homeowners to give up their unused bedrooms

It is a fact that many elderly home owners have more bedrooms than they use.  What could be simpler than forcing them to sell up, so that families could take over their homes?  Nothing, apart from the fact that we have the concept of private property in the UK.

Stop house purchases by foreigners

It is certainly regrettable that many houses in central London have been purchased by people from abroad, who then fail to occupy them.  By all means impose special taxes on such purchasers.  However, a complete ban would be totally at odds with the UK’s traditional openness to the world, and it would affect very few properties in any event.

Replace Council Tax with Land Value Tax

The replacement of council tax by land value tax (‘LVT’) is seen as a solution by many.  I am sure this would free up some additional brownfield land for development.  However, its impact would be marginal, as it would have no effect on the value of greenfield land, most of which is off limits to development (and therefore planning permission, which is the real driver of land value in the UK).  Also, the introduction of LVT would create a large number of ‘losers’, and would create a major political headache that would take years to resolve before it led to the building of any more houses.

And the alternative?

As any reader of my previous blogs will know, we have large areas of building land available within the M25 around London.  Much of it is within walking distance of existing tube and rail stations.  It could be developed very quickly for housing, without any of the huge disadvantages attached to the ‘solutions’ canvassed above.   But it is completely off limits for development in the absence of political and buy-in.  Maybe, just maybe, these will be in place by the time the next Parliament ends.

Michael Ingle

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Categories: Economics, Housing, London, Politics, Tax, Transport

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