2 Sep 2010

Councils axe 100,000 planned homes in England

I’ve seen new figures showing that councils have pulled plans for around 100,000 new homes since the coalition government wrote to councils in July telling them to ignore previous government homebuilding targets.

The Communities Secretary Eric Pickles axed regional strategies put in place by the Labour government that aimed to build three million new homes in England by 2020.

Councils were instead told to draw up their own proposals for agreeing planning applications.

The government also scrapped the independent housing affordability watchdog, the National Housing and Planning Advice Unit (NHPAU).

Before its demise, the NHPAU had calculated that England needed to build 240,000 houses a year to meet demand. However due to the recession, just 123,000 were constructed last year.

In an exclusive interview, Peter Williams, the NHPAU’s chairman until July told me that he believed fewer homes will be built
in the future. “The likelihood is that we will see fewer homes being built and affordability pressures get worse,” he said. 

“The prospects for first time buyers look extremely difficult and not likely to get any better in the near future. Only better off first time buyers will get access to the market”.

Dr Williams referred as “high risk” the current government’s strategy of offering a New Home Bonus, a six-year council tax incentive to councils.

Letter from NHPAU to Housing Minister Grant Shapps

In a letter to housing minister Grant Shapps before the NHPAU was disbanded, Dr Williams warned that the UK faced an increasingly severe social and economic consequences and house prices will become less and less affordable with more dangerous booms and busts”.

The NHPAU suggested a house building target of over 300,000 per year was required: “getting back to the level of house building we saw before the recession is nowhere near enough. We need to deliver half as many again extra homes”.

Mr Pickles axed the NHPAU before it began the annual formal process of assessing England’s housing need. He had suggested that such targets were ‘soviet’.

However a study carried out for the National Housing Federation by Tetlow King suggested that councils had now pulled plans for 100,000 homes.

The figure includes: 9,600 cut by Bristol City Council,  3,000 cut by Exeter, 10,750 by North Somerset, and 9,200 by North Hertfordshire and Stevenage.

Jamie Sullivan of Tetlow King told me: “The overall reduction in housing targets will now be at least 95,000 since the Pickles letter”.

Mr Sullivan said Luton and South Bedfordshire had cut their targets by 10,000: “So it could be argued that the number of homes that will not now be planned for is around 100,000”.

But Housing Minister Grant Shapps argued that the Labour’s government approach using centrally set targets had not worked.

In a statement to Channel 4 News, he said: “Central housebuilding targets and regional spatial strategies don’t build homes. Under the previous Government the number of new homes being started slumped to the lowest levels since 1924.

“Top-down targets and bloated bureaucracy haven’t worked.

“Reviving a housebuilding market on its knees takes much more than pieces of paper from central government telling town halls what and when to build.

“That’s why we’ve pledged to give councils substantial extra funding if they build new homes through our New Homes Bonus. This will mean that they get significant financial benefits from building the homes their communities really need.

“We’re also giving struggling rural villages the chance to secure their long-term future and build new homes that locals can actually afford to live in through Community Right to Build scheme. And, despite tough economic times, we’ve managed to safeguard funding for thousands of new and affordable homes, which the last government had left unfunded.”

14 reader comments

  1. RBorrie says:

    Dear Faisal. You implied on C4 news tonight that existing communities tend to oppose new developments if they are not imposed from the centre. That might not just be NIMBYism though. In our our part of East Yorkshire, East Riding Council have highly detailed plans for the thousands of houses they want to build – and we have the space, and we need houses for our children to live in when they grow up. However there is no detail whatsoever on the corresponding investment needed in schools, health services, fixing the dire safety record of our local A1079 road, social care services, and protecting the local environment. Would you let your local authority increase the size of your town by 25% with apparently no idea of how they are going to pay for it? Of course not. People are more likely to welcome new houses and neighbours into their communities if they have confidence that the local public services can cope.

    1. Tom Wright says:

      Too right. There’s a lot wrong with our housebuilding industry. Like banking, house building is run by a tiny handful of companies.

      Every development is cramped into massive estates. New houses are too small: the 3bed showhome always has one bed so small you couldn’t buy it in the shops. After a year, they crack, and there are always ‘finishing’ problems. They don’t have gardens. Rooms are rabbit hutches and we are told this is ‘green’. Somehow the obligation to provide essential infrastructure is often circumvented – like schools – a big estate means a concentration of children, oh, and often in a generation this means a concentration of social problems.

      Worst of all they commission research saying we need more flats when everyone knows we have a crisis in primary school places. What the research actually says is that house builders need to make more and greater profit by reducing raw material costs.

      The big housebuilders should be broken up. So we get houses that look different, don’t all appear at the same time, and so that the profit is not concentrated in the hands of the few but spread around small businesses – where it actually does us some economic good.

  2. Alan Dean says:

    This seems to be further evidence of the vacuum that has been created in planning for future homes for large numbers of people in coming years.

  3. Househunter says:

    This is far too complex a problem to be dealt with as if it can be solved by simply building more and more houses. We need to prevent the depletion of the available housing stock by the increasing tendency for second-home and investment-home ownership.

    One major reason why first-time buyers cannot afford to buy a home is not because the houses they seek are not available, it is because they are being pushed out of the running by buy-to-let investors. There has been an exponential rise in the number of buy-to-let transactions over the past ten years, with the purchases being primarily at the bottom end of the market where first-time-buyers would be looking to make their first step onto the property ladder. By the end of 2007, 13 percent of all new mortgages were for buy-to-let!

    Rather than simply allowing more and more homes to be built on open countryside, the government should find a way to “disincentivise” this parasitic form of investment that disadvantages people at the bottom end of the housing market twice over; first, by depleting the stock of low-priced homes available to purchase, and second, by forcing people to rent privately, probably from a buy-to-let…

  4. housesnothutches says:

    Central government decided to take the view that specific areas would be designated for particular types of development, with little or no knowledge of local needs or conditions.

    London Boroughs are facing major problems with their infrastructures because of the implementation of aspects of the London Plan. Location, location now goes hand in hand with density, density: we’ve gone from high rise to high density. Rabbit hutches – hotel rooms are being offered as family homes, many with little storage and no parking allocation. Two-bedroom flats being offered with 67sq.m – 30ft.x 25ft. approx. in old money.

    Designated areas and targets set by government meant that developers continuously propose excessively dense developments with little or no regard for local needs, with scant regard for the needs of future generations of families.

    Developers in their bid to meet local authority targets for social housing end up cramming as many units as possible into the plot in order that their ‘bottom line’ isn’t affected.

    I watched with interest your item on this issue, but if you want some insight into what’s really happening out there please get in touch. We need a real…

  5. Bernard Townroe says:

    “…we’ve managed to safeguard funding for thousands of new and affordable homes, which the last government had left unfunded”. Sorry, but how many times is this lie going to be left unchallenged?

    A Freedom of Information request by the Local Government Chronicle proved it was a complete fabrication. As for the ‘Community Right to Build’, quite a lot of people, including those usual suspects the Country Land & Business Association, think it’s more of a ‘Community Right to Block’.

  6. Househunter says:

    housesnothutches – ABSOLUTELY. Well said. I agree 100%.

  7. Philip says:

    It’s a pity that we lurch from central government trying to push house building because of the pressures it recognises on affordability and homelessness (incl the effects of massive social change) and “leave it to the (local) market”. In practice, the latter means an inadequate supply of new housing (see 1979-97) & the next government having to deal with the pressure of massively pent-up demand. This is the sort of area where all concerned need to meet, leaving their dogmatic views outside, and sort out a long term sustainable approach

  8. Andrew Dundas says:

    More and more people are insisting on living longer and not in residential homes. They want to live happily and independently in their own home. There are also more divorces an young singles. It’s their choice!
    Those individual wishes mean we need a lot more dwellings: about 60,000 a year. Especially small ones near shops and public transport that are suitable for single person households.
    Moreover we need replacements for the 27 million dwellings that wear out. Many are not suitable because they are the wrong size or location for current needs and as the North declines. If their suitable lives average about eighty years, we need to build or re-furbish about 400,000 replacement homes a year.
    Usually we build or re-furb about 150,000 pa with a bias to the South-East and London. The annual shortfall is why house prices have risen more than the USA or EU averages for 60+ years.

    1. Househunter says:

      Andrew
      I presume that because we don’t have about 250,000 homeless people coming onto the streets each year, that there are places where all these single people can live?

      That means that we need these additional homes not to actually house these people who would otherwise be homeless, but to give them more choice over where they want to live, or simply to reduce the price of their housing.

      That is not quite the message that is being put out by the pro-housebuilding side, is it?

    2. Tom Wright says:

      here here Househunter. Wish I could give you a thumbs up. The single occupancy argument is rubbish. In my workplace I see more and more young people cohabiting as couples to avoid the punitive cost of renting, not because they are choosing to live together as opposed to marry. Relating single occupancy to the decline of marriage as Andrew infers is bunkum: ‘their choice’ is a choice driven by convenience and economics as much as social change.

      Divorce should be related to the real issues and the single largest problem behind relationship deterioration is concern over money, followed by not enough time to actually see each other.

      The underlying issue is standard of living: rental and mortgage costs eat up too much of our disposable income because the prices are too high. The prices are too high because Supply is distorted on both the buy and the rent side by Buy To Let. In turn Buy To Let is sustained by Housing Benefit.

      Socialist policy is driving up the divorce rate and lionises marriage break up – which drives untold misery for children – as ‘choice’.

  9. Alan Dean says:

    One of the reason that we don’t have 250,000 people on the streets is because people in their 20s-40s are increasingly having to continue to stay living with their parents instead of being able to have a place of their own. This is causing severe social tensions that may well be unseen but are a denial of independence.

    Last night Uttlesford District Council members said they had set the council’s future housing numbers for sites still to be identified to zero. That means about another 4,000 homes have been dropped from future plan preparations, including a plan for a new town at Elsenham.

  10. Andrew Dundas says:

    Neither ‘Househunter’ nor ‘Tom Wright’ appears to understand that the fastest growth in households is amongst the growing proportion of elderly folk.
    Grannies used to either live as part of the children’s households or more usually incarcerated in a residential home. Now they want their own small home.
    There is also a population drift towards the South-East as people seek better careers away from the peripheral regions of our islands. That cause may well accelerate further because of changes in economic policy.
    A smaller part of the demand changes is the growth in young singles. And largely because of the postponements of pregnancy that have radically changed family formations since the 1950s. You may not know that teenage mothers are now much rarer than in our history and that the mean average age of a first-time mother recorded in 2001 census was age 29 compared with age 19 in the 1961 census. And there’s the continuing high level of demand caused by divorces. Those are big changes.
    All those reasons are causes of the demand for new housing and for refurbishments of existing ones. That’s why we need a very large increase in the number of dwellings built each…

    1. Househunter says:

      Andrew

      I understand the changing population demographics quite well, thank you. However, you are technically wrong to say that the “growth” in the number of households in the country is due to the growing proportion of elderly people. A static population with no births or deaths will have a constantly growing proportion of elderly people within it. That’s Life! Tempus Fugit and all that jazz.

      By definition, elderly people have been living in their own households from before the time their children were born. They are therefore not “new households” or “additional households”, they are “existing households” that are surviving longer than perhaps they used to due to better healthcare. For you to talk about them wanting to have their own home as if that is some kind of unreasonable imposition on everyone else is absurd.

      As for your statistics about teenage mothers, you are looking at the wrong statistics. What matters as far as housing is concerned is not the entire population’s average age for the birth of the first child, it is the number of single mothers who are being allocated social housing now by comparison with 1961. I don’t suppose you have any figures on…

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