2016 London mayoral election: Bypassing bureaucrats is the key to fixing London's housing crisis

Syed Kamall
Follow Syed
Direct negotiations between developers and residents would be more likely to lead to developments (Source: Getty)

How would you feel if a property developer wanted to knock down the 1960s council estate next door and replace it with a shiny, new and modern estate with more homes?

On the one hand, you will eventually wake up each morning to a rather nicer view (although any chance of seeing the Shard on the horizon might be gone).

On the other, you will face at least three years of noise and disruption from builders. And no chance of selling to anyone else during that period. On balance, you would probably urge your local councillors and the local planning department to reject the application. There's nothing in it for you.

Now imagine that the developer offers to pay your council tax for the next four years. Would it change your view at all?

What if, instead of protracted discussions with local bureaucrats in the town hall or with local councillors worried about losing your vote, the developer was able to negotiate directly with you and your neighbours?

The situation is even more acute for those on the council estates who own their home because of Mrs Thatcher's right-to-buy. All too often under the current rules, they find themselves turfed off an estate that is being redeveloped.

The compulsory purchase price they are given won't buy them a home on the new estate that replaces the one being bulldozed. No wonder they do all they can to make sure the development doesn't happen. What if developers were instead to promise a brand new like for like or better home in the same location at no extra cost?

Unfortunately, UK developers aren't allowed to do this at present. If they could, it could both massively speed up the planning system and cut the cost of new houses. According to the Social and Economic Research Council (SERC) close to 35 per cent of the average house price – and far more than that in London – is directly attributable to planning restrictions.

Such direct negotiations would be more likely to lead to developments that local councillors would be able to support because local residents do.

And it would also hugely increase the supply of new houses. Planning battles put developers off from all but those sites where they can be relatively certain of achieving planning success.

The principle of buying off objections is already established and working in France - not normally a country known for its love of market mechanisms. If you live anywhere close to a new nuclear power station, you are entitled to free electricity for the rest of your life.

Just imagine how long it takes to get permission for new infrastructure in this country.

And just think how much time and public money we might save if we applied a similar compensation system to not only new homes, but also to new rail lines, power stations or to the current Heathrow/Estuary Airport debate.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles