The battle for more affordable housing is heating-up in the UK. Since last week’s detailed article on the proposed reforms to the UK planning system – the centre piece of which involves implementing a “presumption in favour of sustainable development” in order to make home building in greenfield areas easier – opposition from existing homeowners and conservationists has reached fever pitch.
Dr Oliver March Hartwich from the Centre for Independent Studies (CIS) captured the prevailing mood well in an article published last week in Business Spectator:
While the rest of the world wonders what the next phase of the GFC will bring; and while the rest of Europe discusses the future of their common currency; the British are pondering an entirely different question: How can they protect the last blades of grass on their small island from being concreted over?
Though it may sound like an exaggeration, a cursory read of British newspapers suggests that even in these times of global economic uncertainty, little else matters as much as reforms of Britain’s antiquated planning regulations. A new National Planning Policy Framework prepared by Chancellor George Osborne will cut more than a thousand pages of regulation into a simple policy document containing a presumption in favour of development…
His strategy for building more homes has created strange bedfellows indeed. The National Trust and the left-leaning Guardian newspaper, the Labour Party and the conservative Daily Telegraph: They are all fiercely campaigning against any policy change which could boost development and residential construction.
Bizarrely, the debate is happening at the very moment that Britain is recording its lowest ever post-War building activity. Last year, a mere 103,300 new dwellings were completed in England – half the post-War average. And completions will fall further – between April and June seasonally adjusted housings starts were down 9 per cent on the previous quarter.
England, the green and pleasant land, has so far withstood all attacks from bulldozers, concrete mixers and cranes: According to official statistics, less than 10 per cent of the country is actually developed in some form. A total of 90.1 per cent of the English surface area is classified as green space or water. Of the remaining tenth of England, the largest chunk (4.3 per cent) is neither buildings nor roads – but domestic gardens.
The British are not living on a concreted over island, nor are they currently building much. Yet the political debate about planning reform could hardly be fiercer. This proves that housing and planning issues have long left the sphere of rational discussions. Instead, they reflect a deep-seated British insecurity about space. Bringing about planning reform thus is at least as much a psychological challenge as it is a political one…
So obsessed about space have the British become, so worried about surviving on their supposedly overcrowded island, that they are fighting hard to keep Britain the way it is. This goes beyond the ‘nimbyism’ (‘Not in my backyard’) we also know in Australia. The English are actually going ‘banana’, which stands for ‘Build absolutely nothing anywhere near anyone’.
Resisting any new dwellings will certainly keep Britain the way it is – in more than one way. It will not only protect rich country dwellers, the modern-day heirs of Messrs Darcy and Rochester, from the influx of plebeian city folk, but it will also keep British house prices ludicrously expensive.
By providing a constant under-supply of land for development, the British have made housing severely unaffordable for people on ordinary incomes…
Houses in Britain are not only ridiculously expensive. They are also ridiculously small. The average size of a newly built dwelling (more often a flat than a house) is a measly 76 square metres. University of Reading economist Alan W Evans once characterised the style of British housing quite appropriately as “rabbit hutches on postage stamps”.
Chancellor George Osborne is therefore right to improve the supply side conditions for housing development. Only by building more homes will Britain solve its housing crisis. In order to build more, planning needs to become simpler. A statutory presumption in favour of development is a first step. However, it says a lot about a country when the departure from a statutory presumption against development is widely interpreted as revolutionary. Compared to Britain’s planning regime, the old Soviet Union was a free market paradise.
A powerful constituency against the planning reforms are wealthy owners of large country estates on Britain’s greenbelts. This group is keen to preserve their unspoilt views and tranquility from ‘commoners’ seeking affordable housing. They also stand to lose-out from declining property prices should greater development be permitted:
Thousands of house prices could fall by a third or more if Coalition Government proposals to change planning rules in favour of developers become law, knocking hundreds of thousands of pounds off some of the most desirable homes in the green belt…
“It is the larger and higher value country houses that will suffer the most if developers are given the go ahead to build in green belt and other protected areas, as it could jeopardize three of the factors by which a country house is valued; its privacy levels, the views it has, and its proximity to other properties.
“If a substantial country house were to lose its picturesque country views, it could be decreased in value by at least 30pc, depending on the desirability of its location. Generally, the higher value the property is, the higher the percentage decrease could be.”
Similarly, Charles Ellingworth, founder of home search agents, Property Vision, said: “If you have a good house that has its view ruined, you would be looking at a 30pc to 40pc devaluation.
To be fair, it’s not just wealthy land-owners and conservationists opposed to reform. Many recent highly-leveraged home buyers are afraid that measures boosting housing supply risks bringing-down UK home prices, potentially landing them in negative equity.
But with the average UK first home buyer without parental help now 37 years of age, something’s got to give. Society will eventually cease to function properly if the older home owning class continues to deny the younger generations access to affordable housing.
