12.03.2018 Theresa May’s housing measures: developers to be penalised for not building enough homes

12.03.2018 Theresa May’s housing measures: developers to be penalised for not building enough homes

Theresa May has announced plans to penalise property developers who do not build homes quickly enough and “rewrite the laws on planning” in order to help more people get on the housing ladder. The new laws will allow the council to refuse further planning permission if their build-out rate is not fast enough.

The Prime Minister argued that ‘the gap between permissions granted and homes built is still too large’, which is attracting criticism from some within her own political party. The Conservative peer Lord Porter said: ‘If we want more houses, we have to build them, not plan them. If we want cheaper homes, we have to build them, not plan them. Why not let councils build so many houses they don’t have to ration them just for the poorest in our society. Then key workers can have affordable housing wherever they live, until they can afford to buy’. In the last year councils had granted nearly twice as many planning permissions 321,000 – as the number of new homes that were completed – 183,000.

Local Government Association (LGA) noted that ‘stripping councils of their rights to decide where homes are built is unhelpful and misguided,’ and government should give councils the right to borrow more cash. Lord Porter confirmed ‘The government must back the widespread calls for council borrowing and investment freedoms to spark a renaissance in house building by local government’. Tory MP Nick Boles supported this opinion and stated that the country is in need of housing reform. John Penrose added that changes to planning guidelines “won’t be enough to solve Britain’s housing crisis on their own, or to stop prices from spiraling out of control for renters and buyers”.

Industry practitioners were similarly critical of some of May’s comments, not least her remarks around land-banking. Brian Berry, chief executive of small builders’ association the Federation of Master Builders, said: ‘The pace of building homes cannot be simply dictated. Those whose business is building houses have very few incentives to just sit on land… the government needs to push back against developers who have a particularly poor track record of delivery, and those who seek planning permissions purely for speculative purposes, but it should recognize that attempts to force building at a rate which makes poor commercial sense could end up slowing down delivery’.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said ‘The need for more supply of affordable homes, faster delivery and more efficient planning are issues all parties agree upon and more apolitical longer-term solutions must be found’.