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The Great Housing Scandal: Channel 4 Dispatches

Category: News Release

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Harry Wallop investigates the failure to build enough houses in the UK, a generation have been priced out of the property market, but instead of affordable homes being built we find plush mansions and plans for luxury hotels. Dispatches also discovers deals done with big developers which could have potentially lost the taxpayer millions.

Over the past five years we have only built half the houses needed, despite government plans dating back to 2011 to get developers building. The Government's plan was to build 100,000 homes by selling off unused publicly owned land to private companies. The land was sold off by various government departments but the vast majority of homes have not been built.

The biggest contributor to this plan was the Ministry of Defence. The MoD claim to have sold off enough land for an estimated 39,000 homes as part of the Government’s overall 100,000 target.

Dispatches uncover:
•    Dispatches scrutinized all of the sites sold by the MoD to developers between 2011 and 2015 to find out how many of the predicted homes are currently in the pipeline - for almost half of them, planning permission hadn't been obtained.
•    Affordable housing targets are not being reached in some cases and less than a quarter of the homes to be built on former MoD public land since 2011 will be affordable
•    We could only find a tiny fraction of these new homes on MoD land, a mere 64, had been completed on land sold between 2011 and 2015

Ministry of Defence land for sale and development:
The Government have identified 4 Ministry of Defence sites in Plymouth which could provide space for 370 homes. One former commando base had capacity for 20 new homes, was sold for £1.7 million.

But when Dispatches visited the site there was no sign of the new homes. The land was sold to a private company who were under no obligation by the MoD to build homes on the site - which has since been turned in to offices, workshops and laboratories. Despite the absence of houses the government include this site in the official figures as land sold for 100,000 new homes.
•    Dispatches found 47 sites sold by the MoD since 2011 where planning permission was needed for new homes, and only 11 of those were sold with planning permission.
•    Planning permission hasn’t been obtained by developers for almost half of the sites sold by the MoD between 2011 and 2015. Often the developers hadn’t even applied for it.

Pete Redman, a housing expert, examined the MoD sold land and estimated their value vs. the price they were sold for:

o  Property outside Bath, Ensleigh South
- Valued at just over £8 million with planning permission – sold for £3.9million without planning permission
- 30 months later the developer sold it on to another developer, with planning permission for £8 million

o RAF Brampton in Cambridgeshire

- Valued at £20million with planning permission– sold for £10.1million without planning permission

o  Wilton Park, Beaconsfield
- Valued at £60.5 million with planning permission, sold for £35million

Pete Redman estimated that these sales potentially lost the taxpayer an estimated £40million and that is just for three sites. "If you multiply that up to the hundred thousand homes that’s a poor deal for the tax-payer."
Failing to get planning permission before selling the land doesn't just lose taxpayers' money it can also slow down house building.

MP Meg Hiller, Chair of PAC, "they were very clear from the beginning that they would only count land into this total if it was very likely that homes could be built on it. The point was this scheme was supposed to be releasing land that was where the housing was very likely to be built –i.e. where planning permission was either granted or very soon to be granted."

A MOD spokesperson said: "We've already made £500 million through land sales and around 5,000 houses are currently being built on that land. Sometimes we sell land without planning permission. That's so we stop spending taxpayer money on maintaining a site we don’t need and spend it on things like our new fighter jets or aircraft carriers instead."

Brompton Road station – Dimitri Firtash:
Brompton Road tube station was shut down before WWII and taken over by the Ministry of Defence; it now sits empty and the MoD says it has enough space for 20 homes.

Two years ago it was sold to Ukrainian oligarch Dimitri Firtash for £53million.

•    Dispatches have uncovered a document that shows that Mr Firtash only paid a little over a third of the asking price up front because the MoD deferred payment of £33 million pounds, effectively a huge loan by the taxpayer.

•    A few weeks after he bought Brompton Road, Mr Firtash was arrested in Vienna. He was investigated by the FBI on suspicion of 'racketeering' and 'money laundering'. The extradition request was turned down last year after Mr Firtash claimed the charges were politically motivated.

•    The MoD said Brompton Road tube station had space for 20 homes, but Mr Firtash was not put under any obligation to build them.

•    No plans have been submitted to turn the site into 20 new homes.

Regarding the sale of Brompton Road Tube station an MOD spokesperson said, "The site was sold on the open market to achieve best value for money…The sale followed all guidelines set out by the Treasury and the MOD is satisfied that all necessary legal checks were carried out."

Former MoD land used for high end hotels and apartments:
Minley Manor is a Grade 2 listed building, previously used as officer's mess; it has potential for 50 homes. It was sold for £8.2 million to Strong Property (UK) Ltd. Pre-application advice has been requested for the redevelopment of the site into a six star hotel.

The Government estimate the site of the Old War Office has space for 100 new homes, proposals by the the buyers Hinduja Group and OHL Developments are for a luxury hotel and 50 branded residences.

Meg Hillier, MP, "I'm hugely disappointed that large, expensive land is being sold off not for housing when it was supposed to be sold for housing. Look it’s fair enough for government to manage its portfolio and it may be that it has plots of land to be sold for other things but it should be up-front about that – that land should not be included in the lands that’s being sold off ostensibly to build the homes that are so desperately needed in this country."

Former MoD Barracks not meeting local authority guidelines for affordable housing:
At the former Prince Philip Barracks, in Bordon, Hampshire, the MoD with developers plan to build 2,400 new homes. House prices have risen in the area by nearly £50,000 in the last five years. The local authority in Hampshire aims for new developments to have 35% affordable housing.

•    Instead of 35% the Ministry of Defence negotiated a lower rate with the local authority.

•    Just 15% of the Prince Philip Barracks will be affordable housing.

•    This equates to 480 less well-off families who will find it harder to buy or rent their own home.

Dispatches have examined every site the MoD sold between 2011 and 2015, more than half of the developments where planning has been agreed will end up having fewer affordable houses than the local council target. Overall, less than a quarter of the homes on former public land sold since 2011 will be affordable.

And what of the wider government pledge to sell off enough public land for 100,000 new homes? Well only an estimated 1,800 homes have been completed since 2011.

The plan is to build a million homes by 2020. And to help the Government has launched an even more ambitious plan to sell off even more public land…but will it do any better than the last one?

Theresa May, "Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home."

Producer/Director: Jane Fellner
Executive Producers: Chris Shaw
Production Company: ITN Productions