Yet another promise
As Housing Secretary, Michael Gove, once again makes promises to tackle the housing crisis by building on brownfield land, a report from the Competition and Markets Authority (CMA) has laid bare what many of us already know – Britain’s planning system is well and truly broken.
After a year-long investigation, the CMA blamed, amongst other things, a ‘speculative’ approach to building, alongside ‘complex and unpredictable’ planning rules, for the persistent under-delivery of homes across the three nations.
While the report’s list of shortcomings is long, none of them are likely to come as any great surprise. Building houses really isn’t rocket science, and it’s a bit baffling how we continue to get it so wrong.
Planning rules leave construction in limbo
At the top of its list of culprits were current planning rules, which it says can often take too long for builders to get through before construction can even start.
Under-resourced planning departments and a lack of up-to-date local plans are adding to the problem – with a lack of clear targets or strong incentives for local authorities to deliver the numbers of homes needed in an area.
Not only this, but once projects are underway, the need to consult with so many stakeholders about the plans often results in projects being further delayed.
House developers also under fire
Unsurprisingly, it also took aim at private developers, which it criticised for producing houses at a rate at which they can be sold without needing to reduce their prices, rather than diversifying the types and numbers of homes they build to meet the needs of different communities – such as providing more affordable housing.
Housebuilders also came under fire for potentially sharing commercially-sensitive information. This was perhaps the only new bit of information in the report, with the CMA saying it had found evidence during the study which showed some housebuilders might be sharing commercially-sensitive information with their competitors, which could be influencing the build-out of sites and the prices of new homes. While it has launched an investigation under the Competition Act, it did emphasise it does not consider this to be one of the main contributors to the housing crisis.
The shortage of new homes falls at the hands of many
It also didn’t blame the practice of land banking alone for the housing shortage. While the CMA found this practice did occur, it concluded it was more a symptom of the issues identified with the complex planning system and speculative private development, rather than being a primary reason for the shortage of new homes.
Other areas highlighted included estate management charges, where the CMA found a growing trend by developers to build estates with privately-managed public amenities. These charges it found are often high and unclear, with unplanned charges for significant repair work costing thousands of pounds in some instances and causing considerable stress to homeowners.
Quality continues to remain questionable
Quality was also mentioned, with the CMA reporting housebuilders don’t have strong incentives to compete on quality, and consumers have unclear routes of redress. Its study found a growing number of homeowners are reporting a higher number of snagging issues. While a substantial minority also experienced particularly serious problems with their new homes, such as collapsing staircases and ceilings.
Sadly, a lot of what was in the report comes as no great surprise. While it didn’t offer any great revelations, it is hoped it will, at the very least, act as a wake-up call – especially as we gear up for the election.
We keep hearing lots of talk and promises, but what we really need is action. In response to the report, the CMA has called for ‘a substantial intervention in the housebuilding market’ to address the issues. The report makes several recommendations, including streamlining the planning system, establishing a new homes ombudsman, and implementing a single mandatory consumer code.
While Gove’s recent suggestions touch on some of the concerns raised in the report – such as plans to require planning authorities to take a less restrictive approach when considering applications for development on brownfield sites – we still continue to skirt around the issue.
Building on brownfield land isn’t a bad idea, but it also isn’t the magic answer – with building in city centres and towns bringing its own set of issues.
Falling housing figures shows more planning is needed
While Britain managed to construct a not-so-shoddy 234,000 new homes in 2022-23, a more telling indicator of what lies ahead are the housing starts figures, which show that between July and September last year, the number fell by 68%.
Building control figures show the number of dwellings where building work had started on-site was just 21,300 – a 68% decrease compared to the previous quarter and a 52% decrease compared to the same quarter of the previous year.
It would be easy to place a lot of the blame on builders, but as the CMA report highlights, it all comes back to the need for a better functioning planning system. It’s really not that complicated. Let’s hope we can finally start to get things right.
Simon Jackson is managing director at SDL Surveying
First published with Best Advice