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Crisis – what Crisis?

In 2013 during a House of Commons debate a number of MP’s challenged the then Planning Minister, Nick Boles on the so called “housing crisis”. Mr Boles responded by saying “Housing need is intense. I accept my Hon. Friend the Member for Tewkesbury (Mr Robertson) does not share my view, but many HON. Members do, and there are lots of statistics to prove it”.

The facts then were abundant: higher house prices, worsening affordability ratios, rising numbers of homelessness, stagnant wages and the like. Roll forward 4 years and the country remains in the grip of a national housing crisis, fuelled by a lack of housebuilding, a lack of affordable housing funding and building, continued problems associated with ever increasing homelessness in many of our towns and cities and increasing rents in the stretched and often substandard private rented sector.

The Governments muted response has been to issue a White Paper about how they intend to tackle the crisis. The self-titled – “Fixing our broken housing market” and broken it is.

Whilst the White Paper looks at matters such as landlord and tenancy agreements it also seeks to look at ways of boosting housing supply by amongst other measures broadening the definition of affordable housing and suggesting a standard methodology for the calculation of local housing need, seeking to provide the right homes in the right locations. A laudable if not lofty ambition.

But why has the crisis arisen? Housebuilders have been fairly constant on their output over the past 3 decades. However, where there has been an obvious decline in the construction of new homes built by Local Authorities.  The cessation of Council house building in the 1980’s has not been replaced by Housing Associations picking up the baton. Over this period, we have also seen rapid increases in house prices. This scenario is neatly illustrated in the graph produced by KPMG and Shelter following a year long study to understand the housing shortage and to provide advice to the government in 2015. The report starts by setting out that, “everyone now accepts that we have a desperate housing shortage in England”. The report highlights that if we do not take firm action to build more homes there will be very worrying consequences for our economy and society; including rising homelessness, stalled social mobility, declining pension savings and an ever-increasing benefit bill.

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The graph shows four interrelated trends:

  • An overall decline in housing building since 1946, including a steep decline from 1980 and a marked further decline since 2007.
  • Relatively high levels of social housing provision by local authorities up until the mid 1970’s.
  • The growing relative contribution of affordable housing provision by housing associations since the late 1980s. The fairly consent output by the private market.
  • The gradual increase in the nominal house price through until about 1985 then grows exponential over the subsequent 20 years.

There clearly appears to be a correlation with the decline in new housing provision and house price inflation, although of course there are clearly many other interrelated factors. 

We now hear in 2017 new ambitions from the Government to build 300,000 new homes a year. Sadly this is not until the mid 2020’s. Research by Tetlow King Planning has established that since the heyday of house building in the late 1960’s, assuming an annual need for 300,000 new homes year on year, that there has been an accumulated shortfall of 5.7 million homes in England. This is shown below:

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This is a staggering shortfall and a failure of seismic proportions. No wonder the Government realises that a significantly higher number of new homes must receive planning permission and be built.

My work at Tetlow King Planning has been to assist housebuilders and land promoters in the identification of the requirement to give great weight to the need for more houses in England and importantly more affordable houses. Pointing out on many occasions the outright failure of council’s to keep up with local housing demand. As recognised by a senior Planning Inspector at the Pulley Lane appeal in Droitwich Spa, “these are real people in real need now”.

I am proud to have assisted Richborough Estates at many successful applications and inquiries where my evidence has been helpful in securing planning permission. A strong case in point is echoed in the words of the Planning Inspector at the Ludlow case, who said on hearing my evidence that, “whilst the LPA is able to demonstrate a deliverable five year supply of housing sites based upon its requirement set out in Policy CS1, this is not a limit: there is an acute housing shortage in England. It is recognised in national planning policy that the government anticipates a significant boost in the supply of housing. In this respect, the provision of any extra housing to this national shortfall is a benefit in favour of the proposal, including both market and affordable housing.” The Inspector went on to say that, “The proposal exceeds the policy by 10%, providing what is effectively an overprovision of affordable housing. This is an over-provision of much needed affordable housing in an area that has a historic under-supply of such accommodation, and where there is a pressing and real need here and now.”

There can be no doubt that there remains a housing crisis. Hopefully those MP’s in 2013 are no longer disputing their proposition. What the country needs is a greater number of sites with planning permission and I hope to continue to support Richborough Estates in their pursuit of helping the country address this bleak and desperate situation, which, in the words of Mr Boles, is causing grief and hardship on millions of our fellow citizens.

This article is written by James Stacey a Director at Tetlow King Planning and a national expert on affordable housing.