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Housing crisis exacerbated by developers, bishops warn

10 February 2017


Field of vision: houses under construction on a new housing development in Basingstoke, Hampshire, on Tuesday

Field of vision: houses under construction on a new housing development in Basingstoke, Hampshire, on Tuesday

A RELIANCE on private-sector developers to solve the housing crisis is unwise, given the powerful profit drive, bishops have warned.

Responding to the Government’s White Paper on housing, which declares that the housing market is “broken” and is causing “anxiety, hardship and unfairness”, the Bishop of Manchester, Dr David Walker, said that he had “considerable doubts” about whether the measures proposed were enough to deliver a million homes by 2020, the Government’s stated goal.

“Expecting the bulk of them to be delivered in the conventional way is not going to work out,” he said. “The underlying problem is large developers who only build at levels that maximise their profits.”

“It is unlikely that the private sector can deliver what is required, as they will continue to be guided by maximising profits, which often means reducing the numbers of affordable and starter homes and increasing the numbers of larger homes,” the Bishop of St Albans, Dr Alan Smith, said on Wednesday. “It is a pity that the paper is not proposing that, in some places, it is the public sector which needs to grasp the problems and initiate large-scale building of housing.”

More than one third of new homes granted planning permission between 2010/11 and 2015/16 have yet to be built. The paper acknowledges a concern that “it may be in the interest of speculators and developers to snap up land for housing and then sit back for a while as prices continue to rise.” It pledges “action against developers or authorities that are not pulling their weight”, including more use of compulsory-purchase powers, increased transparency about land ownership, and allowing localities to set up development corporations to create new settlements.

The homelessness charity Shelter has welcomed the paper as a “step in the right direction”, but, echoing the bishops’ concerns about market forces, including the “crazy sums” charged for land, has called for more radical action, such as enabling councils to buy private land at cheaper prices.

Dr Walker questioned the Government’s “obsession with selling off existing rented properties”. Since 2012, more than 60,000 local-authority tenants have bought their homes, and the paper foresees a further extension to housing-association tenants.

“At the bottom end of the market, it remains the case that 40 per cent of all council houses sold ended up back in the hands of private landlords, being let out again at much greater levels of rent than the council were ever getting for them,” Dr Walker said. “There is a lot of evidence that perverse incentives associated with Right to Buy are damaging the housing market and limiting the range of supply.”

He described how, in the late 1990s, he chaired a Yorkshire housing association that was asked by the council to demolish an entire housing estate, because under Right to Buy it had been sold to landlords who failed to care for it, rendering it a “horrible, horrible place to live”.

Dr Smith said that more “radical solutions” were not addressed in the paper, including the possibility of taxing land prices, but he welcomed several measures, including an emphasis on starter homes, and assurances that the Green Belt was safe. Dr Walker queried the latter pledge, suggesting that some “incursion” might be needed.

The paper says that the Government wants to encourage institutional investors to invest more widely in housing, including shared ownership.

The Head of Strategic Land Investment for the Church Commissioners, John Weir, said that they were “providing a range of tenures” through their investments in land. The aim was always to use this land for residential purposes, he said: “There is no intention to hold on to land that has planning permission.”

He queried whether developers’ land-banking was the main cause of delay in house-building, and pointed to the difficulties of securing planning permission, the challenge of securing buyers, and, in some areas, a shortage of labour and materials.

Today, the average house costs almost eight times average earnings: an all-time record. The paper says that everyone involved in politics and the housing industry has a “moral duty” to tackle the crisis — language that was welcomed by Dr Walker.

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