Housing policy is doomed to fail

No one with any sense doubts that there is a housing crisis. It is right, therefore, that the Government should, as promised in its manifesto, set out to resolve the issue; not just because more homes are needed, but because it believes that a house building programme will play a crucial role in achieving its policy of restoring growth to the UK economy.

Sadly, it is now clear that this policy will fail on its own terms - building 1.5 million new homes at 370,000 per year over its five-year tenure. The fact that it is seeking to build homes at the same (failed) rate as its predecessor, while expecting a different outcome regarding economic growth, seems to have escaped both the deputy prime minister and the chancellor of the exchequer.

There are five further reasons for the forthcoming failure: First, the policy will fail because it is dependent for its delivery on the large development companies to build the new homes. Since World War II the private sector has never built more than 200,000 new homes in a year. Going back to the dispiriting tower block era of the 1960s when the 300,000 target was last achieved, the public sector built a substantial proportion of the total; but the Government denies that this approach is an option now.

Second, it will fail because the UK lacks sufficient people with relevant construction skills to deliver so many buildings. Successive governments have failed to maintain our skills base and, thanks to the utter stupidity of Brexit, those who do have the skills have returned to their East European homes. The Government has set aside £300 million to address the skills training problem. This is clearly too little, too late to enable the Government to hit its target.

Third, and no-one seems to be talking about this, the construction industry does not have access to sufficient amounts of materials to build the new houses at the required pace.

Fourth, capacity issues continue to be a problem for planning authorities who do not have sufficient trained planners to deliver the necessary approvals. Worse, as soon as developers discover that a planning officer is good at his/her job, they quickly recruit them with offers of far better money and working conditions than are available in the public sector, thus denuding planning departments of their experienced and effective staff.

Fifth, the large developers are not in business to solve the Government’s housing crisis. They are in business, like any well-run enterprise, to make profit. The surest way of making profit in the housing sector is to keep house prices high, as they are now. At a fundamental level, the big developers’ interests are not in line with those of the Government; and this will not change.

Crucially, at a local level in East Hampshire, Government policy will fail to deliver affordable new homes needed by the young people who live in the area and who are doomed never to get onto the property-owning ladder. It will fail catastrophically for the 43 percent of the East Hampshire District and 80 percent of its population whose homes lie outside the South Downs National Park. Their irretrievable countryside will disappear, not to build affordable housing, for which the Government has no set target, but to build five to seven-bed executive homes that are way beyond the ability of local people to pay for them.

Locally, the housing crisis is chiefly a crisis of affordability. The Government intends the laws of supply and demand should be made to apply, driving down the cost of a new house by building many more houses; but this is a delusion. In East Hampshire the target for East Hampshire District Council (EHDC) has been doubled under the new planning policy but this will only make a bad matter worse, owing to the distorting effect of the affordability ratio contained within the NPPF. In practice the average cost of all new houses in East Hampshire is £100,000 higher at £530,000, than the existing stock. As well as pricing locals out of the market It has the effect of increasing the requirement for yet more homes, because new houses force up the average cost of the total stock. Great for the developers, but a disaster for the rest of us.

This anomaly could be addressed but only by insisting that all new houses should be built to sell at less than the average cost of the existing stock, which could produce affordable houses for the young people who want their own homes. But this will not happen, first because as explained above it does not align with the developers’ objectives; second, because ministers have not set a target for affordable housing and evade the question when it is put them.

There is a possible solution which would involve building our allocation on the 13 percent of the district that is represented by the army ranges. Such a proposal would, I know, horrify conservationists but at least we would conserve farmable land for food security purposes.

What is clear is that the Government must be made to understand that in listening carefully to the citizens of East Hampshire, EHDC is doing what it was elected to do, which is to faithfully represent those concerns when it considers planning policy. For the Government to suggest, that when EHDC plays that role, it is acting undemocratically because it risks defeating poorly thought-through central government policy, is nothing short of an outrage.

The threat of the loss of our countryside is now at our front door. Either do something about it, by writing to your MP, or kiss it goodbye.

Sir Charles Cockburn

Chair, A31 Alliance

Alton