A bold pro-growth strategy could set the UK’s housing market free

BY 2025, China will have 221 cities with over 1m inhabitants, adding more than 350m to its urban population. In response, 40 billion square metres of new floorspace will be built.

In contrast, here in London, there is a dynamic underground <a href="/house-prices">housing market</a> for beds in sheds in Thornton Heath, Southall, and Stratford. Despite pressing needs, house building at the levels achieved in previous eras now seems unimaginable.

In London, new development is mostly for the affluent, matched by a paltry supply of more affordable stock. While the current recession undermined any innovation in the construction sector, decay appeared earlier than the economic downturn of 2008. The lack of robust opportunities to invest profitably in development has long been disguised by the extension of easy credit and the steady supply of foreign investment. Blocks of flats have sprouted on brownfield land everywhere, but the developments on offer have not provided a balanced supply of housing to meet wider needs. Each design seeks to outbid the last for its urban eco-chic; the result has been a new order of urban monotony. Worse, the UK has the smallest room sizes, on average, in Europe.

The criticisms have been innumerable: they meet the needs of a narrow demographic; they give rise to a social rented sector propped up by housing benefit; some Thames riverfront developments are seemingly inhabitant free. All these challenges miss the point. The purpose of these developments was to provide a low-risk place for spare capital investment to lie low for a few years. Supplying homes for real people to live in has been a side-line for the construction industry.

Planning has been increasingly burdened with wider civic tasks: creating sustainable communities, healthy residents, and crime free areas. While planning should obviously engage with, listen and respond to citizens, good societies don’t come out of the imaginations of civil servants and local government officers.

Society works best when its citizens operate with greater autonomy and control. We need clever designers to produce smart streetscapes and enriching parks, but good works of engineering are being sold to us as behaviour change programmes. This is a political failing; planning regulation is not the route to a good society. Moreover, this use of planning obligations cripples an industry on its knees.

Backbench Tory advocates of free markets are not alone in recognising that deregulation of the land would allow landowners and investors freedoms to promote new development, thereby increasing the housing supply. But Eric Pickles, secretary of state for Communities and Local Government, has said no to building on the Green Belt, which offers a plentiful supply of redundant agricultural land. Deregulation is unacceptable to governments that are concerned with land and property prices.

The more significant task is to challenge the political priorities of the planning system. We need to decide if we really want to encourage growth, and if so, the direction for policy becomes clearer. The use of pattern books (architectual guides once used by our Georgian forebears) to obviate the need for planning consent for every single development, the release of agricultural land, the easing of planning gain obligations – where developers pay for the infrastructure expansion needed for their projects – could all simplify the planning process, but would only be appropriate if we embrace growth.

A more strident commitment to planning by central government, setting big priorities for extending infrastructure and releasing development land, could create greater certainty for developers. Ironically, it could also create opportunities for local, informal planning. If central government focused on creating the conditions for growth, there could be more freedom for local and site-specific experimentation for landowners, developers, and individuals to get on with it, unimpeded by busy-body imperatives.
We will continue to need the political process through which politicians – who unlike planners are at least elected – can set priorities and act as arbiters when development priorities are contested. The localism agenda and the National Planning Policy Framework promised such a root and branch review, but their product amounts to tinkering. It’s time to be bold.

Michael Owens is a contributor to the book The Lure of the City. He is speaking at the Battle of Ideas at the Barbican on 20-21 October, partnered by City A.M.

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