Chancellor George Osborne will make an extraordinary budget announcement tomorrow, 8 July, and the subject of housing is expected to emerge as one of the key issues in his speech.
Ahead of the Summer Budget announcement, property expert Russell Quirk, founder and chief executive of online estate agency eMoov.co.uk, looks back at the new government’s manifesto promises. Seeing a discrepancy in the effects the proposals will have on demand and supply on the property market, Quirk draws up an action plan for addressing the imbalance between the two.
“Wednesday’s Budget is an opportunity to light the touch paper to a revolution in housing supply. Not just to talk about it, but to focus on home building and to deliver supply like no previous Government has since Ted Heath’s,” he says, referring to the high building figures achieved at the beginning of the 1970s.
“The Promises
The Conservatives, in their pre-May election pledges promised to:
• Provide 200,000 starter homes by 2020 at a 20% subsidy for those under the age of 40
• Build 275,000 affordable homes built by 2020
• Continue with Help to Buy
• Introduce Help to Buy ISAs
• Expand Right to Buy
• A £1bn brownfield regeneration fund
• Create a London Land Commission to identify publicly owned land for development
The Problem
“The problem with these promises? Almost all of their manifesto’s emphasis is on fuelling demand, without any action on supply and, basically, how many houses are actually built each year. The resulting imbalance in buyers versus stock will surely lead to further rising prices, particularly in the south east, continuing to fuel the issue of affordability.
“Labour’s election rhetoric pledged to build 200,000 homes each year by 2020. And the Liberal Democrats plumped for 300,000 each year and, whilst laudable and ultimately sufficient, was not accompanied by any plan as to how to achieve such an aspiration. No administration has achieved this level since 1971,” Quirk says.
The Solution
“Greg Clarke, Secretary of State for Communities and Local Government, and Brandon Lewis, Housing Minister and my old colleague from our Brentwood Council days, would do well to think seriously about these efficiency innovations to tackle what otherwise will escalate to a full blown crisis in no time at all, ” he comments.
• Identify ALL developable land owned by all UK public sector organisations and legislate to force them to provide it for building. By way of example, Central and Local Government own 180,000 land assets including thousands of hectares of land but, for instance, 100 pubs, 60 theatres, 40 hotels and 100 golf courses. And an airport. It is estimated that £380billion of assets are under public ownership (Report on publicly owned land assets, DCLG 2011 http://bit.ly/1cf254x)
• Ascertain ALL of the empty homes owned by government departments such as the MoD and implement a strategy to redevelop/refurbish those which are reasonably surplus. Then to be sold off or transformed into market rent and social rental stock (Ten percent of all publicly owned homes are empty)
• Tax relief for high net worth individuals and companies in exchange for them investing cash into social housing schemes. Each scheme would provide a yield and would be traded to subsequent HNWs/companies after five years of ownership. Why shouldn’t the private sector assist the dearth of affordable housing supply?
• Introduce ‘Land-bank tax relief’ to encourage property developers to release land that they hold, more quickly (220,000 plots are land-banked, Home Builders Federation, May 2014)
• Protect our Green Belt. But review land within the green belt that is tainted and not ‘green, pleasant and open’ and define as grey belt. Such as old industrial estates, scrap yards, property locked roadside plots etc. This will allow more development on such sites and remove the default refusal recommendation from planning officers
• Remove the politics from planning committees. Designate controversial, NIMBY sensitive decisions and on sizeable applications to adjoining councils’ committees
Pursuing the suggestions above will unlock enough land to build hundreds of thousands of sorely needed new dwellings in this Parliament.
Shouldn’t we get a move on?”
