Tory backlash against Theresa May's housing measures begins

Catherine Neilan
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May will say “the gap between permissions granted and homes built is still too large" (Source: Getty)

Theresa May's new warning to developers that they could be punished for not building enough houses has already received criticism from members of her own party.

The Prime Minister will today set out plans to enable the government to give councils powers to refuse further planning permission if their build-out rate is not fast enough. May will stop short of saying that developers should be allowed to build on green belt land, although housing and communities secretary Sajid Javid has promised to get tough on “nimby” councils.

But her speech, which will argue that “the gap between permissions granted and homes built is still too large", is already attracting flack from some within her own party.

The Conservative peer and chair of the Local Government Association (LGA) Lord Porter tweeted: "If we want more houses, we have to build them, not plan them. If we want cheaper homes, we have to build them, not plan them. MHCLG need to push back against HMT or the nonsense will go on and nothing will change. Less homes built next year than there were this year."

He added: "Why not let councils build so many houses they don't have to ration them just for the poorest in our society. Then Key workers can have affordable housing where ever they live, until they can afford to buy."

LGA issued a statement on Porter's behalf, noting that in the last year councils and their communities had granted nearly twice as many planning permissions 0 321,000 - as the number of new homes that were completed - 183,000.

Instead of "stripping councils of their rights to decide where homes are built is unhelpful and misguided," government should give councils the right to borrow more cash.

“Ultimately, the private sector will never build enough of the homes the country needs on its own. The government must back the widespread calls, including from the Treasury Select Committee, for council borrowing and investment freedoms to spark a renaissance in house building by local government,” Porter said.

His comments have received the backing of Tory MP Nick Boles, who has been banging the drum for housing reform over recent months.

This morning he tweeted: "We cannot wait for our dysfunctional house-building industry to build the homes we need".

Of Javid's reforms, revealed over the weekend, he added: "His garden towns won't get built without reform of compulsory purchase laws. And we need government to build more houses itself."

Fellow Tory MP and chair of the APPG on housing and planning John Penrose added that changes to planning guidelines "won’t be enough to solve Britain's housing crisis on their own, or to stop prices from spiralling out of control for renters and buyers".

Last month Penrose, alongside Boles and colleague Mark Prisk, wrote to Javid warning that proposed reforms were "too weak", urging the minister to consider to "build up, not out".

Today he said: "Allowing people to ‘build up, not out’ will unlock huge numbers of new urban housebuilding sites and create town houses and Georgian terraces rather than tower blocks.

"Towns and cities will become prettier, homes will become more affordable and it will be greener as we won't need to concrete over the countryside."

“This announcement says there may be a consultation on this in future, but there’s no date and no detail.”

Industry practitioners were similarly unenthusiastic about some of May's comments, not least her remarks around land-banking.

Brian Berry, chief executive of small builders' association the Federation of Master Builders, said: “The pace of building homes cannot be simply dictated. Those whose business is building houses have very few incentives to just sit on land... There is reason to push back against developers who have a particularly poor track record of delivery, and those who seek planning permissions purely for speculative purposes, but the government needs to make sure that rhetoric doesn’t get ahead of reality. It should recognise that attempts to force building at a rate which makes poor commercial sense could end up slowing down delivery. This could end up discouraging rather than incentivising the SME builders and new market entrants we need to diversify the market.”

Colin Lewis, chief executive of housebuilder Avant Homes, took aim at the government's Help to Buy subsidy, which he claimed was behind certain firms' rising profits and bonuses - another topic May raised in her speech.

"Volume housebuilders soon found they could use this scheme to boost their own profits without significantly increasing the supply of new attainable homes. Yet they show rates of volume growth which are lower than before the scheme was introduced," he said. “Let’s link the availability of Help to Buy funds for housebuilders to an increase in the numbers of new homes they build. If a housebuilder does not increase output by a given percentage in one year, reduce the access it has to Help to Buy subsidies the following year.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, urged action on lending, planning, enforcement and "better use of existing resources, especially local authority land".

He added: "The need for more supply of affordable homes, faster delivery and more efficient planning are issues both main parties agree upon. More apolitical longer-term solutions must be found so we are much more likely to see results rather than just talk."

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